4 central SOEs battle over electric car charge station market

The Beijing Branch of China Petroleum & Chemical Corporation (Sinopec) and Beijing Capital Sci-Tech Group Corp. on February 22 agreed to form a joint venture, intending to develop Sinopec's current large gas stations into stations available for both fuel-based and electric vehicles.

Prior to Sinopec's action, several SOEs in the energy sector, including State Grid Corporation of China, China Southern Power Grid Corporation Limited and China National Offshore Oil Company Limited (CNOOC), announced their intention enter the charge station field. Power grid enterprises have power transfer advantages, while the petro-chemical companies hold network ascendancy.

However, controversy still exists in the future of the electric auto charge stations. "This market has a bright outlook, but there are also massive constraining factors. The market value is still difficult to determine," said Lin Boqiang, a research with Xiamen University.

Sinopec has not disclosed its detailed plans for charge station network in Beijing yet. As the construction of charge stations requires support of power grid operators, Beijing branch of the State Grid noted that the project calls for further coordination.

CNOOC took similar action. The company has established a joint venture with China Potevio to cooperate with Zotye Auto, and plans to start their charge station network projects in at least two provincial capital cities in the first half of 2010.

Compared with prudent petro-chemical companies, power grid operators have more radical schemes.

At the beginning of 2009, Liu Zhenya, general manager of the State Grid made a proposal to push forward charge station construction in 27 provinces. Liu's scheme includes 75 public charge stations and 6,209 charging spots, requiring a total investment of around 300 million U.S. dollars.

An official with the State Grid noted that profits are not their top concern at the beginning. "Tapping best resources is the key."

Southern Power Grid is speeding up its charging station projects in Shenzhen, the pilot city of new energy vehicles. China's two largest electric auto charge stations with a total capacity of 2,480 KVA, was completed by the company in Shenzhen last December. According to existing scheme, Shenzhen will have 12,750 charging spots.

"Electric vehicles are undoubtedly the best replacement for traditional autos," said Lin.

Government support will also help boost this market. A national plan to promote the development of China's auto industry calls for a short-term target of electric auto output of 500,000 units in 2011. Industry experts pointed out that the construction of charging stations is vitally important to boost electric auto sector.

By People's Daily Online