The World Meteorological Organization recently released the latest ‘New climate predictions assess global temperatures in coming five years’. The study shows that annual mean global temperature is likely to be at least 1° Celsius above pre-industrial levels (1850-1900) in each of the coming five years (2020-2024). The frequency and intensity of extreme weather and climate events has increased due to global warming. In recent years, the international community has reached a consensus that excessive emissions of greenhouse gases are the fundamental cause of global warming.

The burning of fossil fuels brings huge pollution

Among the current world energy structure, traditional fossil energy sources such as oil, natural gas, and coal are the most important energy sources used by mankind. The carbon emissions caused by the excessive usage of fossil energy makes the global warming problem much more significant. Compared with traditional fossil energy, new energy sources such as wind energy, solar energy and biomass energy are cleaner and emit less carbon . There is no doubt that the development and utilization of clean energy such as wind power is an effective solution to global warming issues.

The National Energy Administration’s “Thirteenth Five-Year Plan for Wind Power Development” proposes that by the end of 2020, the national expected power generating capacity from wind power will reach 420 billion kilowatt-hours of electricity, accounting for about 6% of the country’s total power generation, which is equivalent to the annual saving of 150 million tons of standard coal, 380 million tons less carbon dioxide emission, 1.3 million tons less sulfur dioxide emissions, and 1.1 million tons less nitrogen oxides emissions. This plan will play an important role in reducing air pollution and controlling greenhouse gas emissions.

The development of new energy sources such as wind power is the general trend

Wind turbine blades are the largest component in the cost structure of wind turbines, accounting for about 23% of the cost of raw materials. Blade core material is the key material of turbine blades, accounting for 10%-15% of the cost of blade materials. At present, balsa and PVC foam are the main types of blade core materials. More than 90% of the global supply of balsa comes from Ecuador, while the supply of PVC foam mainly depends on Italy. During the COVID-19 pandemic, Italy and Ecuador were blocked nationwide which leads to the tight supply of balsa wood and PVC foam. The price of balsa wood hence rose from 4,000 RMB per cubic meter to more than 10,000 RMB. The supply of balsa wood is limited and unstable while the environmental requirements of PVC foam is rather high which both cannot meet the escalating needs of wind turbine manufacturers. At present, domestic and international known wind turbine suppliers are seeking new substitutes of blade core material.

NMG Composites’ new Atlas HPE core material

The Atlas HPE developed and recently launched by NMG Composites Co.,Ltd(hereinafter referred to as “the Company” or “NMG”) is a new type of material with IPN (interpenetrating polymer network structure). Because of its unique chemical structure, this material has advantage of high-strength, fatigue-resistant, impact-resistant and withstand high temperatures. Thus, it can be widely used in large-scale wind power generations’ blades and supporting components, ships, sports equipment and other fields. Compared with traditional core materials, HPE core material is more cost-effective with better dynamic fatigue resistance, stable supply and overall lifecycle environmental friendly. It has been widely recognized by wind power manufacturers and therefore an appropriate substitute of traditional core material materials.

NMG has a tenet that new materials makes the world greener. Its strategy, products and operations are in line with Ehong Capital’s investment themes of “clean energy” and “energy saving and consumption reduction due to new materials” as well as the United Nations’ SDG (Sustainable Development Goals) Goal 7 (affordable clean energy) and Goal 9 (industry, innovation and infrastructure) framework requirements. Ehong capital has recently completed its equity investment in NMG.

In the future, Ehong capital will work with NMG to measure and manage the company’s business output (clean energy) and social impact (carbon reduction) in a systematic way. Consequently, better environmental and social benefits can be created as NMG’s main business grows.

Author: Ehong Capital