In recent years, with the continuous evolution of China's energy development strategy and policies, the geothermal energy industry, although slightly obscure in the global market, has also made considerable progress. As a pioneer and leader in such an emerging industry, Xia Jingtao, Chairman of Zhejiang Lute Energy Technology Co., Ltd. and emlyon GDBA candidate, admitted that he needs to invest in more in-depth learning, thinking and exploration.

As an entrepreneur who has grown with China's geothermal energy industry, Mr. Xia has an extremely keen sense of business savvy. Every year, 80% of the world's technological patents in the field of geothermal energy comes from China, and after the "13th Five-Year Plan", that is, by the end of this year, the entire industry will witness an output of about RMB80 billion. However, he understands that China's geothermal energy industry as a whole is too focused on technology, which is obviously not conducive to the healthy growth of the entire ecosystem.

How to incorporate state-of-art management theories and expertise into the industry to drive the industry chain from top to bottom? Based on multi-dimensional considerations, Mr. Xia, who had already served as a postgraduate supervisor at Wuhan University, finally set his sights on the Global DBA Program at emlyon business school, which has migrated from Europe to Asia.

Seize the opportunity to enhance internal strength

Interview with Xia Jingtao, Chairman of Zhejiang Lute Energy Technology Co., Ltd, emlyon GDBA 2020 intake

At present, accelerating the construction of new-type infrastructure is an important way to stabilize investment, expand domestic demand and stimulate economic growth in China, which is of special significance for achieving "six stabilities" and "six guarantees". Xia Jingtao, Chairman of Zhejiang Lute Energy Technology Co., Ltd., believes that new infrastructure will be a critical challenge for the geothermal energy industry, which also means that the development and application of the industrial chain will usher in an opportunity for upgrading, calling for customized design, efficient construction and intelligent operation and maintenance. In terms of market demand, the rural transformation initiative from coal to clean energy campaign and the heating demand in southern cities are still on the rise, representing huge potentials. Mr. Xia pointed out that while seizing market opportunities, it is necessary to enhance internal skills. Enterprises must continue to strengthen technological innovation. Lute Energy strives to find the best balance between geothermal energy performance, investment costs and benefits, in order to contribute to the high-quality development of geothermal energy.

Strengthen the construction of new infrastructure and drive the upgrading of the geothermal energy industry

Ground Source Heat Pump (GSHP): Great to meet you, Mr. Xia. How do you understand the impact of "strengthening new infrastructure construction and developing a new generation of information network" in this year's government work report on the geothermal energy industry?

Mr. Xia:

New infrastructure is a hot topic this year. First of all, we must realize the fundamental purpose of the state to promote new infrastructure. The essence is to drive the transformation and upgrading of the economic structure and improve people’s livelihood. The two sessions of the National People's Congress and the Chinese Political Consultative Conference held this year proposed the change from "six stabilities" to "six guarantees", which fully illustrates this point. The geothermal energy industry is closely related to people’s livelihood, so instead of chasing the hot topic, it is better to enhance our own internal skills. Second, some parts of the new infrastructure, such as the construction of data rooms, indeed bring more market opportunities to the industry. The key lies in the need for us to prepare more thoughtful solutions for the new infrastructure. Finally, we need to realize that the new infrastructure will be an important challenge for the geothermal energy industry, which that the development and application of the industrial chain will usher in an opportunity for upgrading.

In general, I have a few ideas as follows:

• Customized design: The geothermal energy development and design platform, including the features of intelligent load calculation, source-side balance calculation and AI-aided design, will be more precise, intuitive and convenient;
• Efficient construction: A new type of assembly plant combined with AI-aided design will maximize the degree of system integration, ease of installation and cost reduction;
• Intelligent operation and maintenance: Integrating the operation data of various equipment and systems with advanced operation strategies of artificial intelligence (AI) will extend the life of the systems, reduce operating costs, improve energy efficiency and realize the benefits of emission reduction.
• Smart Internet of Things (IoT): Smart IoT for all kinds of equipment, meters and valves will forms a unified model of data exchange.

IoT, big data, cloud and AI are the present instead of the future. it's better to go back and make a net than to stand by the pond and long for fish. I believe that in a few years, some companies will seize the opportunity to stand out in terms of AI-aided design, prefabricated buildings, intelligent energy management platforms and IoT systems.

GSHP: In recent years, the demand for heating in southern cities has been rising, especially in the areas of the Yangtze River Basin where it’s hot in summer and cold in winter. What do you think of this phenomenon? In your opinion, what are the technical roadmap and market trend of clean heating in the south?

Mr. Xia:

Although it is impossible for southern cities to fully promote central heating like their northern peers, because of the demand for both cooling and heating, the market is enormous, which implies high investment return. Therefore, facilitating clean heating and cooling in southern cities is highly meaningful. I suggest that industry experts make more calls and publicity to influence the government and the public so that everyone understands that it is a great solution that benefits consumers, governments, developers and energy investors.

From the perspective of energy efficiency and utilization, the central heating mode in northern cities is not perfect. In particular, the lack of indoor temperature controls and the charging mechanism based on building area cause serious waste. Distributed use of shallow geothermal energy and solar energy according to local conditions will be a trend of clean heating technology in the south. Lute has been actively deploying ground-source heat pump projects in the southern regions where it is hot in summer and cold in winter, represented by the projects that use underground soil and surface water as cooling and heat sources, including both distributed and centralized energy supply projects.

Strengthen technological innovation and improve core competency and sustainability

GSHP: Recently, Lute Energy won the First Prize of Land and Resources Science and Technology Award. Would you please share with our readers the achievements of this major project participated` and completed by Lute Energy?

Mr. Xia:

The First Prize of Land and Resources Science and Technology Award won by Lute Energy is the result of the key technology and application project of China's geothermal resources exploration and development recommended by China Geological Survey. Jointly completed by Institute of Hydrogeology and Environmental Geology, Chinese Academy of Geological Sciences, Zhejiang Lute Energy Technology Co., Ltd. and many other geothermal energy companies, it focuses on major national needs and aims at the frontier issues of the international market. It has innovatively created the technologies of shallow geothermal energy exploration and evaluation, water geothermal resources dynamic evaluation under the conditions of thermal recovery and irrigation balance and sizable and efficient utilization of geothermal energy. It also researched and developed the technologies of hot dry rock target area optimization and reservoir construction, formed new insights of thermal accumulation theory of geothermal resources and the exploration and evaluation technology system of China's geothermal resources, innovated key technologies for geothermal resource development, design and optimization, and built a sizable geothermal development model. It fully grasped the distribution rules of geothermal resources in China, evaluated the resource potential and made a major breakthrough in prospecting. The results of the project also supported the 13th Five-Year Plan for geothermal development and utilization and were widely used in major national projects such as Beijing City Sub-center, Daxing Airport and hot dry rock exploration demonstration at Gonghe Basin, which have achieved good social and economic benefits.

GSHP: How do you think scientific and technological innovations play a role in promoting the growth of enterprises? Can you share Lute's experience and practices in this area?

Mr. Xia:

No problem. Technological innovation is essential to promote the growth of enterprises. The difficulty of innovation is not only the breakthrough of core technology, but also the integration and application of the innovation. Through industry-university-research cooperation and patent database construction, Lute Energy will better absorb innovations from other industries and help us to be at the forefront of the industry in the field of geothermal energy.

In recent years, Lute Energy has closely focused on the field of geothermal energy development and utilization for key core technologies and industrial applications, including shallow, medium and deep geothermal energy development, cascade utilization of cooling, heat and power energy and smart energy IoT, and has made a series of major breakthroughs. Our operational services based on LOOPSEE and LOOPBIM have achieved breakthroughs in the modular delivery and digital operation of construction products. At present, Lute Energy has obtained nearly 200 intellectual property rights in the fields of geothermal energy technology, energy storage technology and smart energy systems, which has greatly consolidated Lute Energy’s core competency and market position.

Seek the best balance of geothermal energy supply performance, investment costs and benefits

(GSHP): The market is optimistic about the prospects for the development of new energy and clean energy. Some banks also provide financial support for the clean energy industry. What do you think of the future of investment in clean energy, including geothermal energy? What is the focus of Lute Energy?

Mr. Xia:

Geothermal energy is becoming the highlight of new energy applications after solar and wind energy. Both the development and application processes fully reflect the value of green development, energy conservation and emission reduction. The comprehensive energy utilization solution with geothermal energy as the core to realize local heating or cooling can not only contribute value to China's grand strategy of energy conservation and emission reduction at the macro level, but also showcase high energy utilization and visible benefits, which represents higher investment return than other energy supply solutions. Therefore, energy investment based on geothermal energy can take into account the common interests of the government, consumers and enterprises, and has great social value. Therefore, we believe that it will become a more mainstream energy investment method in the future, with a widespread market.

GSHP: Lute Energy is developing steadily in accordance with its existing strategy. What is your current focus?

Mr. Xia:

As geothermal energy resources vary in different regions, different solutions and operation models are required, and there are higher requirements for project planning, design, operation and management. Therefore, we focus on continuously optimizing our solutions under diverse conditions through practical operating data, so that the energy supply performance, investment costs and benefits can be in the best balance. Meanwhile, through the intelligent data management platform, we optimize our operation management, reduce operation and maintenance costs and increase investment return.

In the future, we hope to serve other companies in the industry by providing diversified technical solutions and using digital intelligent management platforms to improve the overall performance of the energy investment industry.

Explore the "Yuncheng Model" of clean heating in rural areas for a promising future of the rural environmental protection market

GSHP: We know that ground source heat pumps are gradually increasing in rural coal-to-clean energy heating projects. The "Yuncheng Model" at Wu'an Town, Yuncheng County created by Lute Energy has won praise in the industry. Could you please tell us about the construction and operation of this project?

Mr. Xia:

The fact that "we dare not burn coal but cannot afford to burn gas" is a dilemma faced by many heating areas today, especially in rural areas remote from cities. In order to solve this problem, the People's Government of Yuncheng County, together with Zhejiang Lute Energy Technology Co., Ltd. and Shandong Lunan Geological Engineering Survey Institute, carried out a pilot program of clean heating with geothermal energy. With the guidelines of "government guidance, technology first, enterprise participation, ecological improvement, people benefiting and rural revitalization", through the market-oriented operation of "government + research institutes + enterprises", the "Yuncheng Model” of rural clean heating was achieved.

The New Rural Geothermal Heating Demonstration Project of Wu’an Town, Yuncheng County uses ground source heat pump technology to extract heat from geothermal water and provide energy for residents in the community. The sustainable utilization of "balanced collection and irrigation" effectively solves the problems of resource exhaustion and environmental pollution caused by the efflux of heating tail water in the past. At present, it has realized a heating area of about 100,000 square meters, covering nearly 800 residents in three communities of Fuqian Community, Anhe Jiayuan and Jinakang Community of Wu'an Town. Without increasing the burden on farmers, the project uses renewable clean energy to provide them with low-cost, effective and sustainable heating sources.

GSHP: What do you think should be paid attention to in the promotion and application of ground source heat pumps in rural areas? What is the prospect of the rural market in the future?

Mr. Xia:

In recent years, with the continuous acceleration of China’s urbanization process and the improvement of residents’ living standards, the building energy consumption in rural areas has increased rapidly. In particular, the heating solution of rural buildings in North China based on biomass energy is gradually being replaced by fossil energy sources, including coal. Therefore, the energy-saving challenge in rural buildings is severe. The vast rural areas are rich in renewable energy resources, such as shallow geothermal energy, with superior applicability and huge development potential.

I believe that accelerating the application of renewable energy in rural areas can save and replace a large amount of conventional fossil energy and ensure and improve people's livelihood. The future prospect of rural markets is promising, especially in the rural coal-to-geothermal segment. What needs attention is to strengthen technical guidance and promote it in accordance with local conditions, in particular the technical guidance on equipment operation and maintenance.

(Note: The original artcile was published in Issue July 2020 of Ground Source Heat Pump)

At this top-notch business school in Europe, he is approaching his goal step by step. On the one hand, he is improving his business management capabilities. And on the other hand, he looks at the geothermal energy industry from an independent and management perspective, revealing the dynamics and generating new inspiration in driving CO2 emission reduction and environmental protection in China.

While studying at GBDA, Mr. Xia also received a "surprise”, that is, Lute Energy won the First Prize of Land and Resources Science and Technology. With this superior start, he is also convinced that he will enjoy a perfect journey of DBA study and growth at emlyon business school.

Mr. Xia Jingtao ,photoed at the 2020 intake Global DBA opening ceremony of emlyon business school