Determination for Progress Fortune Electric to Establishing Core Capabilities in Energy Integration

Founded in 1969, Fortune Electric Co., Ltd is a major Taiwanese heavy electric equipment manufacturer that offers transformers, power distribution panels, power distribution equipment manufacturing, and other transmission and distribution lump sum turnkey solutions. Clients of Fortune Electric include major corporations such as Taipower and Formosa Plastics Group, and it has constructed and completed many power plants, substations, and electrical and mechanical installments for many construction projects. In recent years, Fortune Electric has become the first Taiwanese heavy electric equipment manufacturer to successfully enter the supply chain of electric vehicle charging facilities, and by integrating resources, a company brand, EVALUE, was established in 2015, launching various products and innovative services such as the electric car and scooter charging pile and charging station construction, high-efficiency charging equipment, electric bus charging and switching equipment, and an intelligent cloud management system for charging stations.

I-Sheng Hsu, CEO of Fortune Electric Co., Ltd

By Mei-Hsu Shih, Xin-En Wu

Entering the green energy field with the experiences of a traditional manufacturer

　　From power equipment manufacturing to smart green energy system integration, even entering the electric vehicle industry, Fortune Electric has always had its special ways. I-Sheng Hsu, CEO of Fortune Electric, pointed out that when Taiwan started to develop land-based wind power 15 years ago, Fortune Electric witnessed its largest customer, Taipower, started to intensely invest in the development of renewable energy. The decision-makers of Fortune Electric then realized that they cannot be left behind by their most prominent client, which inspired them to start making plans for future years.

　　"In a nutshell, the power system can be divided into three segments: power generation, transmission and distribution, and consumption," Hsu noted. "What can we do in these three areas to respond to future trends? As you may have expected, we first thought about power generation, and we predicted that wind power would become more influential in the following years, where solar power would also become a critical area for us." Although other renewable energy sources were taken into account at the time, Fortune Electric's vision lies with the relatively matured wind power and solar energy.

　　With the goal set, Fortune Electric began developing system engineering for solar and wind power projects, participating in the construction of solar power plants and offshore wind farms. "Our first new direction was set towards solar energy because we believed that it would bloom after the development of land-based wind farms," Hsu said. "We reorganized our existing engineering teams and invested in the systems engineering projects for renewable energies. We started constructing solar energy EPC systems, and then domestic the solar energy market got bigger, but at that time the government failed to support the industry, so solar energy development fell behind a bit. However, although we didn't take part in large-scale solar energy projects, our team continued to work on some smaller or community-sized projects."

　　As Taiwan initiated offshore wind power development, Fortune Electric is ready to apply its technology to the field. "We're specialized in turnkey and system integration, so it doesn't affect us much how the power is generated, as our strength is transmitting electricity from point A to point B," said Hsu. In other words, regardless of the power generation method, Fortune Electric can always develop solutions for the transmission of generated electricity. Fortune Electric had been developing in the direction of offshore wind power, and thus was able to score several contracts from offshore windpower turnkey projects and onshore substation projects.

　　Fortune Electrics continued its green energy R&D as it started to develop intelligent solutions for the systems, investing in the field of smart grids, and eventually, the electric vehicle industry. "To prepare for smart grids, we started investing in information communication, remote monitoring, and the relevant fields, and we ended up researching electricity consumption," Hsu noted. "About over a decade ago, we started as the rookie of the field, but after working on it for a year, we believed that we had an opportunity in the electric vehicle industry." Hsu admitted that people were baffled at their conclusion back then, many people actually thought they were joking. "Cars powered by electricity? How can anyone ever afford something like that? And the batteries are still nowhere to be found! But there was this one key point that gave us the determination to continue our project, and that was 'electricity,'" Hsu explained. "If it's about electricity, the core business of Fortune Electrics, then we'll always make it work!"

　　"After analyzing the electric vehicle industry, we decided that we're not making batteries, nor are we making the vehicles, those were just too far away from us," Hsu said. "We decided to aim at one goal only: charging! Charging is all about transmitting the power into the car, and that's exactly what we're good at, it's just with a different target." As a result, Fortune Electrics set up a dedicated department for researching electric vehicle charging. As the company originated from a traditional manufacturer, its initial steps were mostly equipment developments, such as charging equipment, power converters, chargers, etc.

Competition pressures fostered the birth of a new brand

　　The birth of the brand EVALUE also came from this mindset determined for progress. According to Hsu, after researching for five years, the team was satisfied with their achievement in the Taiwanese market, so they participated in an exhibition held in Germany with full confidence, only to find that the world is way ahead of them. "We developed a 13 kW module, and felt quite good about ourselves, but then we realized companies from other countries were selling nothing under 60 kW. That's the moment we truly understood how advanced other countries are compared to Taiwan," Hsu recalled. This also made Hsu start to consider adapting to the future besides product development. "We wouldn't want to focus only on equipment manufacturing like in the past, because the things we produce are between electrical products, power, and electronic products. The tragedy of the electronics industry companies like us is that those who focus on equipment developments will end up trapped as OEMs, and the profit is very thin," Hsu explained. "Even if they were capable of R&D, as long as the products are equipment, becoming an OEM is inevitable. The pressure is especially high since China and India are offering lower manufacturing costs, but their development progresses are much faster than Taiwan."

　　Fortune Electric thus started its development in EV charging. "Around five or six years ago, the Chinese government initiated a series of visionary EV policies. Lots of manufacturers joined, so I thought we had no chance under such saturation. Besides, no one wanted to buy equipment from us at that time, so our orders mostly come from operators, charging station operators, or car manufacturers from other countries," Hsu said. "The car manufacturing market was especially a hard nut to crack and was almost impossible to enter. As for operators, not many Taiwanese companies were in that field back then."

　　With its R&D capacity that could barely profit, how did Fortune Electrics break through the dilemma? "After careful consideration, we found a niche that might just be right for us. Besides equipment R&D, production, and sales, it is decided that one of our major directions for the future, is to become an operator," said Hsu. In 2014, Fortune Electrics expanded its departments, establishing operation teams in addition to equipment R&D, and began to establish a set of operating systems, including mobile apps, payment channels, and member systems, thereby officially entering the market for operators.

　　In 2020, Fortune Electric first independently built a charging station in Taiwan. "We call it our flagship station. It's located in Neihu, where we turned a vacant lot filled with growing weeds into a charging station with 15 parking spots, each with a charging pile, plus solar panels and energy storage systems on the roof," Hsu said. Fortune Electric is no longer just focusing on charging, but organizing the overall operation. "Users get to park the car and charge with solar power and utility power. This is our vision for the future, so we made it a reality," Hsu noted. At the time, it was the first implementation of a commercially available EV charging station in Taiwan.

　　"We are the first company in Taiwan to charge car owners for EV charging. It's a bit of a leap of faith, but we're quite lucky. Tesla's charging stations were still free of charge at that time, but they had already announced the price for using their supercharger station," Hsu explained. "Our station was built at about the same time as Tesla's, and then we decided to implement charging fees, not just running it as a demo site, but operating it commercially. We designed plenty of pricing methods, and many Taiwanese companies are following in our footsteps now."

　　Fortune Electrics is more than just an operator, as its key core competence lies in energy integration. Hsu further explained that while the industry only started discussing topics like energy management systems, energy storage systems, and green power sales solutions in recent years, Fortune Electrics has already been making progress a long time ago. Among the Taiwanese heavy electric manufacturers, only Fortune Electrics likely has experience in actually providing electricity with the B2C model. In addition, such experiences might even support the company to expand into the non-electric vehicle market in the future. Hsu hoped that Fortune Electrics will continue to achieve its next milestone. "We're a traditional manufacturer means every decision making takes time. Just imagine that you are a turtle, never expect that you could hop to the finish line in one leap like a rabbit. As a turtle, our company had to start moving much earlier than the rabbit. Of course, that's a bit of a gamble, and it may had take 10-fold time for us for the same progress, but so far it looks like we made the right choice back then," said Hsu.

Achieving energy transition and Net-Zero goals The government may have missed the point

　　Concerning energy transition and achieving the net-zero goals, Hsu believed that the transition to green energy is an absolute necessity. However, Taiwan's problem lies in the fact that it takes too much time to start the progress toward grand targets like this. Such processes are usually dragged on by the integration and development of many laws and regulations with business models. In the past, Taiwan's developments are mostly fully contributed by the private sector; Now, financial investments get too hot even before commercial models are implemented, tricking people into overestimating the industry potential and causing havoc in the market. It is a pity that the business models are already twisted under market manipulations before being proven to be successful.

　　Hsu also believed that even with such problems, energy transition still has a chance to succeed. "Despite all the pressure, we are still trying to find the right path. The most important thing is that the business model must take shape first. Whether it is an energy transition project or other innovations, huge capital investments are always required. People will only truly start investing after they are witnessing successes and seeing a future for the industry."

　　For a sound capital market, a balance between supply and demand must be found. Demand mostly comes before supply, or sometimes supply finds demand after it is generated. For example, renewable energy is very popular now, and even after discounting governmental policy factors, this demand is still there due to the international trend of emphasizing green energy, which requires no government promotion. Many manufacturers are thirsty for any green power available because their international clients require so, creating waves of business opportunities. The government is supposed to be the one finding ways to solve or alleviate such development difficulties, whether by encouraging with rewards or other means, so that people are willing to supply even when bearing the high cost of green energy projects. That's how industry developments can be accelerated. In addition, Hsu also mentioned that sometimes the supply surpasses a weaker demand. The energy storage field is a great example, as the government implemented policies to purchase energy storage last year, suddenly everyone jumped in, and the supply exceeded the capacity ordered by Taipower in just one year. If insufficient domestic demand continues without decent channels for exports, these overinvestments will further intensify the competition, with companies cutting down to unreasonable prices and negatively affecting the industry's development. "Low prices either come from sacrificing the profits or cutting costs, and low costs mean higher risks. Bad things are bound to happen if this goes on," Hsu noted.

　　The trends of net-zero goals have stimulated the global demand for green energy, with many governments setting goals of achieving net zero by 2050. For Hsu, who has been an enthusiast for environmental protection since he was a child, net-zero carbon emission is absolutely necessary. "The government has set up some guidelines or timetable about the implementation, and we all know that it wouldn't be easy, but we must make it work. Perhaps I am a bit more optimistic by nature, but I believe that mankind will always find our ways," said Hsu. To achieve these goals, Hsu noted that the Taiwanese government plays a critical role, as it should be investing in fields that people wouldn't want to risk, just like how other governments do. In other countries, many progressive ideas don't guarantee results easily, and their government would invest funds and resources to take the initiative, as the private sector will not embark on unprofitable ventures. However, for the profitable areas, just leave everything to the private sector, and natural growth can be anticipated. "Another important concept for achieving net-zero emissions is to encourage new ideas. By offering pioneers yearning for innovations to have as much space and environment to realize their ideas, one day they might actually succeed, allowing humanity to solve another problem for good," said Hsu.