Zitong Financial App News, China Science and Technology Industry Group (08111) announced that on September 22, 2023, Sanmenxia Encyclopedia New Energy Co., Ltd. (Sanmenxia Encyclopedia), an indirect wholly-owned subsidiary of the company, entered into a cooperation agreement with its project partners for the construction and operation of different power stations in China. The cooperation agreement is not legally binding as the terms of the strategic cooperation between project partners and Sanmenxia Encyclopedia. The project partner and Sanmenxia Encyclopedia will consult and conclude a detailed legally binding agreement in due course.
Under the Cooperation Agreement, the Group will build, own and operate a distributed photovoltaic power station with a potential capacity of 12 MW and a wind farm with a capacity of 200MW (the actual capacity is subject to regulatory approval) on the idle land of the project partners. and a client-side energy storage plant with a capacity of 66.8MW / 267.34 MW hours. The power plant will be an important project for the company-the total investment is expected to be about 2.061 billion yuan.
Upon completion of the power station, the Group will supply electricity from photovoltaic and wind power stations to the project partners, and the project partners shall pay the electricity bill to the Group. The energy storage power station will also be used to supply electricity to the project partner according to electricity tariff-as the electricity price fluctuates during the day, the Group will purchase electricity from the grid and store it at the energy storage station when the electricity price is relatively low, and then sell the same electricity to the project partner when the electricity price is relatively high. Energy storage stations are also capable of storing unused and unsold electricity generated by photovoltaic and wind farms. The electricity charges payable by the project partners to the group will be recognized as income and according to the cooperation agreement, the group shall charge the project partners for power generation at a price lower than the market price.
The power plant is expected to continue to generate revenue for the group in the next few years. Under the cooperation agreement, the group will continue to supply electricity generated by the power plant to the project partners in the next few years to generate revenue. Due to the high daily power consumption of the main business of the project partners, the company expects the power plant to generate long-term and stable revenue if a detailed legally binding agreement is established. In addition, the project partner is a strategic client of the company because its parent company (although its subsidiaries, such as project partners) owns a large number of mines and smelters in the PRC, which have a large energy demand, so it may become a source of income for the group in the future.