The Turning Point for Independent Energy Storage Has Arrived: Who Will Define the Next Decade?
The recent cancellation of the “mandatory配储” policy has further propelled independent energy storage into the spotlight. Many industry experts believe that independent storage may soon enter a new phase of growth, signaling a return to the true value of electrical energy storage. Since the beginning of 2024, we have reached a turning point for independent energy storage.
Independent energy storage, defined as independent storage power stations, differs from energy storage associated with renewable energy installations or coal-fired power plants. Its independence allows it to directly sign grid dispatch agreements with electricity scheduling organizations.
Since 2024, driven by policy changes, significant projects have emerged in regions such as Jiangsu, Zhejiang, and Xinjiang, creating a preliminary framework for profitability in China’s independent storage sector. Notably, in May 2024, independent storage accounted for 99.9% of newly operational energy storage projects in China, with major concentrations in ten provinces, including Shandong, which leads with an operational scale exceeding 400 MW.
The essence of independent storage is seen as an energy financial tool, according to a Southern Power Grid representative. Over time, independent storage has developed a revenue model based on three pillars: capacity leasing, spot market arbitrage, and ancillary services. The start of 2025 further emphasizes the significance of independent storage as the cancellation of the “mandatory配储” policy positions it as the “only path” following the construction of energy stations.
Signals indicating this turning point include a combination of policy changes, revenue opportunities, and technological advancements. The “2024 Gansu Electric Power Market Trading Information Report” shows that Gansu’s electricity market has registered ten independent storage operators and twelve ancillary service aggregators. These storage stations participated in Gansu’s frequency regulation services, resulting in a compensation distribution totaling 120.71 million yuan from December 2023 to November 2024. The region’s positive energy quantity from storage reached 445 million kWh, generating associated fees of 121 million yuan. If this positive quantity is considered as the input power for storage, each kWh released in the spot market could yield a price difference profit of 0.2719 yuan/kWh.
Hebei Southern Power Grid is also leading in exploring the profitability of independent storage. They have established a multi-faceted power market system for independent storage stations, incorporating energy trading, capacity leasing, and capacity compensation. In energy trading, independent storage participates in medium- to long-term transactions, securing price difference profits with a maximum charge/discharge price difference of 0.723 yuan/kWh. In capacity leasing, independent storage rents out capacity to renewable energy companies, gaining leasing income, and innovating a market settlement evaluation mechanism. Capacity compensation allows independent storage to benefit from capacity price policies, with annual maximums reaching 100 yuan/kW.
The storage industry has transitioned from a policy-driven phase to a competitive market phase. This was clearly demonstrated in spring 2025 when a directive from the National Energy Administration halted the “mandatory配储” policy, elevating independent storage from a supporting role to a central hub in the new power system. The end of this policy shift is not coincidental: by the end of 2024, China’s total installed renewable energy capacity surpassed 1.4 billion kW, accounting for over 40% of the total installed capacity, marking a shift from “supplementary energy” to “main energy.”
In early 2025, the Ministry of Industry and Information Technology and seven other departments jointly issued an action plan for the high-quality development of the new energy storage manufacturing industry, emphasizing independent storage as a priority development direction and proposing improvements to power market trading rules to facilitate the participation of storage in the spot and ancillary services markets. Various regions in China have initiated pilot programs for electricity spot markets, allowing storage to participate directly in trading. In Shanxi, frequency compensation standards reached 6-12 yuan/MW·time, and in Guangdong, peak-to-valley price differences exceeded 0.8 yuan/kWh, significantly enhancing the economics of storage.
By 2030, energy storage is projected to become a “fourth type of power source,” influencing electricity price formation through real-time pricing. Jiangsu has pioneered a fixed price trading mechanism for independent storage, enabling discharge prices to reach 0.891 yuan/kWh (including subsidies) during peak summer periods, with average daily revenues exceeding one million yuan. Other regions, like Shaoxing in Zhejiang and Hotan in Xinjiang, have also validated the commercial viability of independent storage using peak-to-valley price arbitrage models.
Recently, the performance data for the Yancheng Sheyang storage station was released: this 250 MW/500 MWh facility is Jiangsu’s largest storage project. Since its grid connection on July 12, 2024, it has demonstrated outstanding performance, achieving revenue levels approximately 11.7% higher than the average for the year. Compared to similar storage products, it is expected to add 21.3 million yuan in revenue over a full lifecycle of 100 MWh. Previously, many domestic storage projects faced challenges due to mandatory construction policies, leading to utilization rates of less than 20%. However, in 2024, forty independent storage stations in Jiangsu achieved daily full charge and discharge cycles twice, with the Yancheng Sheyang project earning 40 million yuan in just 40 days, marking a successful trial of profitability for independent storage. The rapid decline in lithium iron phosphate storage system prices, coupled with technological innovations, has further enhanced the economic viability of independent storage projects.
As 2024 draws to a close, the Yao Yang storage station, an independent shared storage facility in the urban-rural integration demonstration zone of Sanmenxia, Henan, is poised to contribute a megawatt-level power output every second. This 290 million yuan investment reflects the rapid development of independent shared storage in China and exemplifies the fierce competition within this sector. The policy shift and technological iterations are reshaping the industry landscape.
Industry leaders such as Sungrow, CATL, and BYD are aggressively capturing market share globally, leveraging technological advancements and expansive global strategies. CATL is developing solid-state battery technology and leading the establishment of domestic long-duration storage standards, while its 6.25 MWh TIANHE system has reduced costs by 20% through mass production. Sungrow has launched the world’s first 10 MWh liquid-cooled storage system and secured orders for 7.8 GWh in the Middle East and 4.4 GWh in the UK, projecting that overseas business will exceed 60% by 2025. Its “localized deep cultivation + full scenario coverage” strategy is closely linked with North American, European, and emerging markets.
BYD’s MC-Cube-T system, designed for high-temperature and high-humidity environments, is rapidly penetrating the Middle Eastern and Southeast Asian markets, with a significant increase in overseas shipments year-over-year in 2024. Meanwhile, CRRC Zhuzhou Institute and Haibo Technology are breaking traditional competitive barriers through technological innovation. CRRC Zhuzhou Institute has introduced a 688 Ah large cell and the CESS-4.0 system, which boasts a cycle life of over 10,000 weeks, successfully securing a contract for the Jurong Port project in Singapore. Haibo Technology’s liquid-cooled system has achieved a 100% certification rate in the European market and has signed orders exceeding 1 GWh with French NW and Australian Tesseract, resulting in significant increases in overseas revenue in 2024.
Local enterprises are closely tied to regional policies, forming protective advantages. The Shandong Independent Storage Alliance has implemented a tripartite model of “capacity leasing + spot market arbitrage + ancillary services,” achieving an IRR of 8% and attracting over 30 operators, including State Grid and Huaneng. Investors and policy platforms are lowering investment thresholds and enhancing revenue stability through new models. Southern Power Grid Energy Storage, backed by Southern Power Grid resources, has achieved a bid acceptance rate exceeding 60% for grid-side projects in 2024, with leasing revenues comprising 45% of their income, significantly surpassing industry averages in cash flow stability.
It is important to note that foreign enterprises such as Tesla and Fluence are accelerating their entry into the Chinese market. Tesla’s Megapack factory has been established in Shanghai, leveraging brand and integrated technology advantages to capture market share. Fluence is collaborating with the Three Gorges Group to construct the world’s first Siemens Gridscale hybrid storage project in Qinghai, incorporating both flow batteries and lithium batteries.
Independent storage needs to move beyond a single peak-to-valley price difference model to incorporate ancillary services (frequency regulation, backup) and capacity leasing, as well as spot trading. In Jiangsu’s model, storage stations participating in demand response saw revenue increases of over 20%. Transitioning to independent storage significantly broadens the revenue channels. On one hand, it can utilize peak-to-valley price differences for arbitrage by charging during low-price periods and discharging during high-price periods. On the other hand, it can actively engage in the electricity ancillary services market, such as providing frequency regulation, peak shaving, and backup services for appropriate compensation.
Independent storage will no longer operate in isolation but will serve as a core unit within a virtual power plant, collaborating with solar, wind, and charging infrastructures. For companies entering this space, they must transition from being mere equipment suppliers to having a strong awareness of energy services. In the short term, companies with technological iteration capabilities, capital resilience, and adaptability will be the first to break through. In the long term, only those that can establish a closed loop of “technology-revenue-ecosystem” will stand out during the “golden ten years” of independent storage development.
