MaHui | Zhonghai Energy Storage Closes Two Consecutive Rounds Worth Hundreds of Millions of Yuan, Source Code Capital Leads PreA+ Round

源码资本·December 12, 2022·0·4

Flow Batteries Could Solve China's Energy Storage Safety Problem

#CodeMoment Key Updates from Source Code Capital and MaHui Members

Originally published on 36Kr, by Zhang Lin

Recently, Zhonghai Energy Storage Technology (Beijing) Co., Ltd. ("Zhonghai Energy Storage") announced the completion of two consecutive funding rounds — Pre-A and Pre-A+ — raising a total of several hundred million RMB. The investors include HSG, Source Code Capital, Matrix Partners China, and Qingliu Capital. Source Code Capital led the Pre-A+ round. The company stated that the proceeds will primarily be used for mass production capacity building, continuous R&D for technology iteration, and general operations.

Zhonghai Energy Storage is a company specializing in the development of new energy storage technologies and the production and sales of storage equipment. Its current core product is the iron-chromium flow battery. The company's core team has been developing and refining the iron-chromium flow battery technology route for over ten years. Its chief scientist is Academician Xu Chunming of the Chinese Academy of Sciences, and its CTO, Professor Xu Quan, is Associate Dean of the College of Carbon Neutrality Future Technology at China University of Petroleum (Beijing), Director of the Department of Energy Storage Science and Engineering, and a doctoral supervisor. Core members of his team each have more than ten years of experience in R&D and commercialization within the energy sector.

Iron-chromium flow batteries offer intrinsic safety, low cost, and other characteristics, making them one of the most suitable battery systems for large-scale, long-duration storage applications. They are expected to play a key role in power generation-side, grid-side, and large industrial user-side storage markets.

Professor Xu Quan noted that flow batteries differ from what people traditionally understand as "batteries" — they function more like a chemical reaction system. Petrochemical engineering represents one of the most important forces in China's chemical industry, so the China University of Petroleum team has a natural accumulated advantage in this domain. Through years of mechanistic research and material and structural iteration, the current technology has overcome previous bottlenecks, achieving high energy conversion efficiency, long cycle life, and excellent charge-discharge performance.

Moreover, because aqueous flow batteries are intrinsically safe and will not combust or explode, they are particularly well-suited for large-scale storage scenarios where safety demands are especially high. This year alone, the Ministry of Science and Technology, the National Natural Science Foundation of China, and the Ministry of Industry and Information Technology have issued multiple policy documents encouraging the development and commercial application of flow batteries — with particular support for the iron-chromium and all-vanadium flow battery technology routes.

Currently, Zhonghai Energy Storage has completed product validation and engineering validation, and has begun entering the commercial project deployment phase across multiple domestic and international locations. The Zhonghai team will continue to invest R&D resources to iterate and reserve next-generation energy storage application technologies, striving to become a globally leading full-solution energy storage expert.

Source Code Capital's investment team stated that under China's strategic push to actively and prudently advance carbon peaking and carbon neutrality, the power system is entering a new era of green transformation. As a flexible regulation power source, the development and application of energy storage technology is a critical enabler for new-type power systems. Source Code believes that iron-chromium flow batteries — with their longer lifespan and intrinsic safety — will become one of the most competitive technology routes for capacity-type storage solutions. Zhonghai Energy Storage possesses deep technical accumulation, rich engineering experience, strong commercialization capabilities, and robust scientific research support, which aligns closely with Source Code's investment thesis in the dual-carbon space: a firm commitment to backing technological innovation and differentiated products. We expect the company to remain true to its founding mission of supporting the construction of a clean, low-carbon, safe, and efficient energy system, to take on the responsibility of driving cost reduction and efficiency gains in new-type energy storage and achieving commercial-scale deployment, to keep iterating its technology, delivering excellent products, and contributing to the attainment of dual-carbon goals.