ENN counts on the internet to remake its old-technology gas distribution

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A Blu LNG filling station in Salt Lake City, Utah on March 13, 2013. ENN Group Co Ltd, one of China's largest private companies, is quietly rolling out plans to establish a network of natural gas fuelling stations for trucks along U.S. Highways. Photo: Reuters

Published: 9:03am, 27 Aug 2017Updated: 10:41pm, 27 Aug 2017

ENN Energy, one of China’s largest city gas distributors, is pinning its hopes on a nascent Internet-enabled energy supply operation as a major growth driver to account for half its revenues in five years, according to its new chief executive.

The ambitious goal is unveiled at a time when the firm has seen gas distribution profit margins eroded in the year’s first half due to customer base change and competition from cheaper petroleum fuel and rising popularity of electric vehicles.

“What one needs to consider is the huge growth potential of natural gas as a cleaner replacement of coal,” Sean Wang Shaojian, who joined ENN in March, said in an interview. “Profit margin is only a small part of our business prospect.”

The Chinese government is aiming to raise gas’ contribution to energy consumption from 6.4 per cent last year to 10 per cent in 2020 and 15 per cent in 2030, which still lags the world average of 24 per cent.

A LNG fuel pump nozzle at a Blu LNG filling station in Salt Lake City, Utah, March 13, 2013. ENN Group Co Ltd, one of China's largest private companies, is quietly rolling out plans to establish a network of natural gas fuelling stations for trucks along U.S. Highways. Photo: Reuters

“As coal is banned in new industrial parks while existing ones are under pressure from local governments to replace their coal-fired boilers with gas-fired ones, demand for cleaner, more efficient energy solutions will rise,” Wang said.

Having invested in 22 smart digital platforms and infrastructure projects that regulate the supply of heat, power, steam and cooling, to serve the multiple energy needs of commercial and industrial customers, ENN is building 12 more, and have signed contracts to build 14 more.

“Our projects involve a micro power grid operating through a digital platform, which distribute various forms of energy from local sources, such as solar, gas and biomass,” he said, adding they can help customers cut energy bills through more efficient generation and consumption of energy.