Working on the Long-Term Perspective. By Gunnar L. Thomsen, Director of Operation, DEIF China

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Technology transfer from Denmark to the state-owned Chinese grid-companies might constitute future commercial possibilities for Danish companies in the grid-sector.

Founded in 1933, DEIF is a company with a long history of supplying, among other things, control equipment for power production - controllers for diesel generators for small and medium-sized power plants, wind turbines, etc.

Back in 2001, DEIF China was established, headed by the CEO, Ms. Jean Zhang. Ms. Zhang has spent the years since then building and consolidating personal connections, which are so crucial in Chinese business-environment.

With the Chinese grid-companies being state-owned, these connections are not only to people in the private business sector but also at the political level.

Ms. Zhang’s diligent nursing of the important network of private and political contacts back in 2007 led to an interesting enquiry; CSG (China Southern power Grid) expressed a wish for Ms. Zhang to arrange for a delegation visiting Denmark (among other places) to learn about the Danish model of power production.

Denmark abandoned the model of producing power at big centralized coal-fired power plants many years ago. We switched to a model where power is produced at smaller, de-centralized plants, typically fuelled by natural gas. One of the big advantages of this model is that the waste-heat from the power production can easily be utilized for heating private households.

In close cooperation with Danish-Chinese Business Forum the programme for the delegation was arranged, and the delegation got a chance to see not only how things are done in Denmark – they also got to meet Danish decision-makers in order to discuss the political side of the matter as well.

The CSG delegation was satisfied with the programme arranged in 2007, and has since re-visited Denmark twice in 2009. During these visits, the delegations were interested in looking further into such areas as the composition of the Danish grid, the Nordic electricity market, Danish energy policies, our experience with incorporation of renewable energy, as well as research and technologies concerning smart grids.

Following in the footsteps of the CSG delegation was another high-ranking Chinese delegation, headed by the mayor of Shenyang – a city with a population of some 8 million people. Like the CSG delegation before them, the purpose of the Shenyang delegation was to learn about the Danish power-production concept.

No concrete commercial results have yet been achieved by receiving the delegations, but there is no doubt that if China decides to pursue a distributed model like the Danish one, Danish companies are in the first row to tap the enormous potential that the Chinese market possesses. And that will not be confined exclusively to DEIF – it will involve many other Danish companies in the business.

Thus – despite not having produced any concrete commercial results yet – the cooperation between Danish-Chinese Business Forum and DEIF in facilitating Chinese delegations proves that lobbying at the political level can be highly rewarding commercially.