Code Watch | Source Code Capital's Di Wang: Focus on Energy Cleanization and End-Use Electrification

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Recently, Wang Di, an investor at Source Code Capital focused on the dual-carbon space, delivered a speech titled *Investment Thinking Under Dual Carbon — Energy Cleanization and End-Use Electrification* at the **China Insurance Asset Management Association**, sharing his investment perspectives on energy cleanization and end-use electrification against the backdrop of the broader carbon peaking and carbon neutrality trends.

MaGuan

Source Code Capital invests in technology-driven innovation,

and in the creation of lasting, real value.

Recently, Wang Di, Source Code Capital's investor in the dual-carbon sector, delivered a speech titled "Investment Thinking Under Dual Carbon — Energy Cleanization and End-Use Electrification" at the China Insurance Asset Management Association, sharing his investment perspectives on energy cleanization and end-use electrification against the backdrop of the carbon peaking and carbon neutrality megatrend.

"Carbon" is shorthand for the full range of greenhouse gases that cause global warming and extreme weather. Global warming is an objective reality for the coming decades. The primary reason is that Earth is currently in a relatively warm phase of its temperature cycle; second, carbon emissions have risen exponentially over the past century of industrial development. These two factors compound each other, amplifying the warming cycle's impact. We therefore view global warming as a "real problem" rather than a "false proposition" — one that demands solutions and collaborative effort to shape the future.

According to third-party estimates, global greenhouse gas emissions into the atmosphere total roughly 51 billion tons annually. Our goal is not zero emissions from this point forward, but rather that emitted carbon be fully absorbed — that is, carbon emissions equal carbon removal. Carbon neutrality means net-zero emissions.

Carbon peaking and carbon neutrality have become shared goals and coordinated actions for countries worldwide. In the State Council's Action Plan for Carbon Peaking Before 2030, the working principles of "dual-wheel drive, two-handed effort" emphasize technological innovation as the engine of green, low-carbon development. China's 2030/2060 targets will ensure the pace of new energy substitution and stable market demand and space. Source Code Capital consistently invests in technology-driven innovation to create lasting, real value, and has developed a systematic presence in the dual-carbon sector.

Focus on "Carbon Reduction," Focus on "Green Power"

To achieve carbon neutrality, two main approaches exist: carbon reduction and carbon sequestration. Carbon sequestration technologies are complex, with many technical pathways, but most remain early-stage and costly. Carbon reduction is the more feasible avenue, and its optimal leverage point lies in electricity: replacing fossil fuels with clean energy and improving efficiency through technological innovation at every step of the process.

  • Industrial carbon emissions arise mainly from operations and high-temperature combustion. Operational electrification is already relatively advanced, but large-scale industrial high-temperature combustion still relies primarily on traditional energy. If we can electrify operations and source that electricity from green power, we solve much of the problem.
  • Second, current transportation — whether vehicles, ships, or aircraft — still runs mainly on fossil fuels. Upgrading to lithium battery or fuel cell propulsion would achieve emissions reductions.
  • Third, nearly 10% of carbon emissions come from HVAC and air conditioning, a category spanning human temperature and heat control in both living and production contexts. Energy efficiency and green electrification in HVAC are also essential for carbon reduction.

Research shows that direct power-related carbon emissions account for less than 30%, but if we upgrade energy supply to green power across the above domains, we effectively address the greatest common denominator of carbon reduction in industrial production, transportation, and HVAC. Therefore, from the sources of carbon emissions, we derive electricity as the starting point for dual-carbon investment: on one hand, increasing the proportion of green power used; on the other, maximizing electrification on the demand side.

Take Distributed Energy as an Example

Traditional energy — whether mineral extraction or power generation — achieves economies only under centralized structures. Energy cleanization will drive distributed power development because clean energy structures inherently favor decentralization. Centralized plants may actually lose advantage due to large land requirements and high transmission and distribution costs.

Under distributed energy architectures, both microgrids and data intelligence are needed. Power grids are delicate systems requiring constant balance; in the future, the value of power flexibility will exceed the value of power itself, and dispatchable load — or flexibility — will be the grid's core resource.

Source Code Capital has visited numerous industry companies and invested in Unisun Energy Group. Unisun is a pioneer in China's commercial and industrial distributed solar industry and China's first clean energy power operator to achieve industrial-scale development with distributed generation as its core business. The group comprises three business segments: Unisun Power, Uper Energy O&M, and Aopu Energy Technology. It is among China's largest distributed solar investors, developers, and operators by project count, installed capacity, and O&M scale, with operations spanning nearly 300 cities and over 2,000 power stations nationwide, totaling nearly 5 GW in operational capacity.

Focus on "Energy Storage"

In the 14th Five-Year New Energy Storage Development Implementation Plan issued by the National Development and Reform Commission and National Energy Administration on January 29 this year, emphasis was placed on promoting diversified technology development, safety control, and demonstration pilot projects to advance new energy storage industrialization. We believe that as application scenarios multiply and economics improve, global new energy storage will enter a new rapid growth phase, bringing numerous opportunities to the new energy power sector.

Looking back to 2020, global energy storage was still a small market; electrochemical storage, for instance, totaled roughly tens of billions of RMB industry-wide. But taking the long view, we conservatively estimate the electrochemical storage market will reach hundreds of billions of USD by 2030. Following this logic, our internal research team began a top-down industry scan and initiated exchange and collaboration with Dr. Liu Weizeng, who had led or participated in four national 863 programs. Source Code Capital was then fortunate to invest in JD Energy, founded by Dr. Liu.

JD Energy is a provider of intelligent energy-block storage solutions. It independently developed the energy-block intelligent storage system solution, adopting an "All In One" design concept that innovatively integrates long-life cells, high-efficiency bidirectional balanced BMS, high-performance PCS, active safety systems, intelligent power distribution systems, and thermal management systems into a single cabinet, forming a highly integrated, unified intelligent energy-block product, eBlock. This solution eliminates user concerns about electrochemical storage system safety while improving system conversion efficiency, ensuring battery capacity utilization, reducing O&M costs, and providing an entirely new, standardized product delivery and solution for large-scale storage deployment — countering the industry's current diseconomies of scale.

Focus on Industry Chains

When power generation modules become PV components and storage/release modules become power batteries and storage batteries, both jointly advance high-end manufacturing in related fields. From polysilicon to modules in PV, to the complex processes spanning four major materials and front/mid/back-end production stages in power battery manufacturing, to new energy storage — all involve relatively complex industry chains. The gradual formation and maturation of these chains carries the significance of high-end manufacturing. We often cite industry's three elements: materials, equipment, and process. Materials determine performance; equipment determines production efficiency; process determines quality and yield. The iterative interplay among these three elements drives industry cost reduction, efficiency improvement, and technology upgrading.

Once China possesses a complete dual-carbon industry chain, that chain itself will propel and nourish adjacent industries. Battery development of all kinds drives new material R&D; electric vehicles further advance core components and intelligent driving technology. As green power, energy storage, electric vehicles, charging stations and other industries develop rapidly, demand for high-end components will gradually strengthen.

From a global market perspective, mid-to-high-end resistors represent roughly tens of billions of USD in market capacity, and international relations have accelerated China's independent R&D and production of high-end electronic components. Accordingly, Source Code Capital invested in Kepai Electronics. Founded in 2006, Kepai Electronics is a full-industry-chain supplier of high-end components and module products, positioned in mid-to-high-end industrial-grade resistors. Its products were used in the Chang'e-4 lunar far-side soft landing, and the company has earned honors including "National High-Tech Enterprise" and "Gazelle Enterprise."

In our engagement with Kepai Electronics' founder, our "resonant communication" with the CEO was exceptionally productive, which facilitated our investment partnership. Source Code Capital has always aspired to be a partner on the entrepreneurial journey: conducting top-down research, deeply understanding technology, and rapidly and effectively grasping entrepreneurial direction. On this foundation, we continue to cultivate every dimension and link of industry chains.

Source Code Capital embodies a strong entrepreneurial spirit, committed to "All Our Code for You" — providing MaHui to connect the entrepreneurial ecosystem, Code Brain programs to enhance entrepreneurial cognition, and Code Power services to empower entrepreneurs. We hope to discover and serve more outstanding companies in the dual-carbon sector.

About Source Code Capital Investor Wang Di

Mr. Wang Di joined Source Code Capital in 2020, focusing on investments in intelligent manufacturing, clean energy, and technology. He led investments in Pera Global, BLUETTI, and Unisun Energy, and participated in the investment of Yungu. Mr. Wang Di previously worked in Vanke's Investment Department, participating in M&A and innovative projects in property management and proptech. Before that, he worked in Morgan Stanley Huaxin Securities' investment banking division, participating in and leading multiple A-share and Hong Kong capital markets and M&A transactions. Mr. Wang Di holds a bachelor's degree from Peking University and master's degrees from Peking University and The University of Hong Kong.