The series of stories about Finnish-Chinese collaboration during the 65th anniversary of the relations, continues with the story of GreenStream Network Ltd collaboration with China.
“Talented personnel, strong network and unique business concept” lists Dr. Jussi Nykänen, the CEO of GreenStream Network Ltd when anyone asks his company’s three success factors in China. GreenStream is a leading Nordic company focused on delivering energy efficiency projects in China and a variety of carbon market and renewable energy services. GreenStream has been active in China since 2006. “The reason why I wanted GreenStream to do business in China is that I admire China’s capability to develop the country fast but sustainably and to make long-term planning” explains Dr. Nykänen.
During its first years in China GreenStream developed over 90 emission reduction projects across the country and also gained a market-leading position in relation to the development of Chinese domestic emissions trading schemes (ETS). Currently GreenStream has trading licenses in Hubei, Shanghai and Shenzhen ETS pilots. In 2012 the Company decided to expand its business from carbon markets into the provision of energy efficiency services. “Energy efficiency and emission reduction markets in China offer boundless opportunities, but success requires dedication and efficient use of resources” Dr. Nykänen tells.
GreenStream’s clients are the major Chinese energy intensive industries and at the moment Company has active energy efficiency projects in paper and steel industries. Operations in chemical industry are also underway. GreenStream’s business model utilizes Energy Management Contracting (EMC), whereby the project owner is able to access world-class technology without upfront capital costs. Pursuant to the EMC model, GreenStream organizes financing, technical solutions and engineering for its industrial clients. The value of the energy savings created by the project are shared between GreenStream and the project owner for a defined period. “We share the value of the created savings with our Chinese clients and since our current projects have created up to 60 % of energy savings and up to 100 % of water savings for them, you may imagine that we have happy clients and strong references” explains Harri Roto, the COO of GreenStream.
The EMC model is similar to European Energy Service Company (ESCO) scheme and is strongly supported by the Chinese Government as it seeks to move China to a low carbon economy. GreenStream’s unique offering is that it is the only technology independent EMC company in the markets, with access to leading Nordic cleantech solutions and offering EMC financing. Hence GreenStream is able to promote the best available foreign technologies to industrial installations in China.
Undoubtedly, China is a challenging market for innovative companies, but where others see risk GreenStream sees opportunities. ”The Chinese markets are our future. The combination of scale, and momentum towards efficiency energy use, is compelling. However, you also need the team, the technologies and the network – which I am confident we have.” says CEO Dr Nykänen. “Guanxi, the Chinese word reflecting dynamic personal networks and relationships, is one of the key ingredients to success in China. And we are lucky that we have been able to build such a trustworthy and valuable guanxi in China. In addition, we have the initial funding support from the Finnish Fund of Industrial Co-operation, Finnfund, which is a key factor enabling us to become this strong in China markets.” Dr. Nykänen notes.
Together with its partners both in China and in Finland, GreenStream looks forward to expand its energy efficiency portfolio in 2016. “The core of our business is to find the best and most robust solutions for our Chinese clients. Nothing less” Dr Nykänen emphasizes.