Since the suspension of mandatory energy storage requirements a month ago, the energy storage market has surprisingly gained momentum. The relationship between new energy and energy storage is expected to persist, albeit in different forms. On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a notice aimed at deepening market reforms for the on-grid pricing of new energy and promoting high-quality development in this sector. This document, referred to as “Document No. 136,” explicitly states that energy storage configuration should not be a prerequisite for the approval, grid connection, or on-grid operation of new energy projects.
The announcement of this policy triggered significant concern within the energy storage industry regarding a potential decrease in storage demand. However, more than a month after its release, current observations from Huaxia Energy Network and Huaxia Storage indicate a completely different scenario. Local governments have begun to introduce policies encouraging the integration of energy storage with new energy projects. Moreover, there has been a noticeable increase in the demand for distributed photovoltaic systems combined with energy storage solutions.
Overall, the energy storage industry appears to be transitioning from a “policy-driven” model to a “market-driven” one, ushering in a new and vigorous phase following initial disruptions.
Increased Local Willingness for Energy Storage
Following the suspension of mandatory energy storage, provinces like Yunnan and Guizhou have quickly rolled out new policies promoting energy storage configurations. On February 10, just a day after the release of Document No. 136, the Guizhou Provincial Energy Bureau published a draft management approach for wind and solar power projects. This document stipulates that projects included in the province’s annual construction plan must ensure grid connection and configure energy storage systems capable of meeting at least 10% of the project’s installed capacity (meeting a two-hour operational requirement). Projects that fail to meet the established timelines will not be permitted to connect to the grid.
The document also encourages the orderly planning of new energy storage projects based on regional development, power load levels, and grid demands. It advocates for new storage projects to be co-implemented alongside renewable energy projects in areas experiencing grid constraints. Additionally, it encourages project investors to voluntarily enhance their energy storage configurations and purchase related services.
In early March, the Yunnan Provincial Energy Bureau released a draft management approach for energy storage projects, which includes 175 new energy projects with a total installed capacity of 14.48905 million kilowatts. These projects are expected to allocate at least 10% of their capacity for energy storage or utilize shared energy storage services.
Within less than a month of Document No. 136’s release, two provinces have issued supportive policies for integrating energy storage with new energy projects. It remains to be seen if other provinces will follow suit.
The central government’s decision to halt mandatory energy storage aims to refocus the energy storage industry on market fundamentals and allow genuine market demands to dictate growth. For local governments, energy storage remains a vital tool for enhancing renewable energy consumption and ensuring energy security. By implementing more flexible energy storage policies, local governments seek to strike a new balance between policy guidance and market forces. Notably, previous requirements for energy storage primarily applied to centralized renewable energy projects. Recently, there has been a growing trend towards policies encouraging energy storage integration with distributed renewable energy projects as well.
On February 10, alongside the Guizhou draft management approach, a supporting policy was released that allows county-level energy authorities to guide investments in distributed energy storage facilities based on local development conditions. On March 17, the Ningxia Development and Reform Commission published a draft management approach supporting in-depth cooperation with photovoltaic enterprises and financial institutions to drive the development of diversified applications such as “photovoltaic + energy storage” solutions.
Integration of Sources, Grids, Loads, and Storage
Since the announcement of Document No. 136, the concept of “integration of sources, grids, loads, and storage” has increasingly appeared in the work documents of state-owned power enterprises and local governments. For instance, on March 5, Shandong Province issued guidelines for pilot projects that promote this integration to improve the utilization of renewable energy and contribute to the development of a new power system. On March 7, China Energy Construction announced that it is integrating the entire energy and computing industry chain through this model. Additionally, on March 12, the government of Luoyang, Henan Province, reported its plan to implement 40 integration projects in 2025, while Lingbao City also aims to launch multiple integration projects by the end of the year.
Integrating sources, grids, loads, and storage refers to a new operational model that plans and operates these components as a cohesive system. This model offers multiple benefits: it effectively reduces carbon emissions, opens new pathways for renewable energy consumption, and aids local governments in achieving sustainable development goals. For power generation companies, it presents a novel approach to adapting to market reforms and exploring new growth models within the evolving policy environment. For consumers, it is akin to establishing new self-sufficient renewable energy power plants, significantly lowering electricity costs and enhancing market competitiveness.
Financial institutions are also paying close attention to integration projects. Recently, the Bank of China’s Weihai branch provided the first loan for a pilot project in Shandong, which integrates sources, grids, loads, and storage. Given the high costs and lengthy construction timelines associated with these projects, financial support alleviates funding pressures on developers while enabling banks to optimize their credit structures and enhance their ability to serve the real economy.
As such, the proactive promotion of projects like the integration of sources, grids, loads, and storage is becoming increasingly apparent.
The Irresistible Trend of Photovoltaic and Storage Integration
Document No. 136 makes it clear that all newly commissioned renewable energy projects after June 1, 2025, must participate in market competition. In this context, Liu Yafang, an adjunct professor at Zhejiang University, has emphasized in several forums that renewable energy companies must consider system adjustment costs and energy quality control costs to achieve desirable returns in future power market competitions. Energy storage will emerge as a strategic partner crucial for the high-quality development of renewable energy.
On March 23, Xiexin Energy Technology disclosed in a research report that green power generation companies will transition from reliance on subsidies to market competition, with technological innovations such as wind and solar power forecasting and energy storage integration becoming increasingly important. Due to the fluctuating nature of photovoltaics during the day, energy storage that accommodates these variations is gaining significant attention within the industry.
At the first large-scale renewable energy exhibition held in China after the release of Document No. 136, both photovoltaic and energy storage companies showcased integrated solutions as their primary offerings. For instance, Sungrow Power Supply introduced comprehensive solutions for “zero-carbon parks, zero-carbon homes, and zero-carbon industries,” incorporating integrated technologies for power generation, storage, charging, and cloud services. JA Solar released all-scenario photovoltaic module solutions that apply to diverse extreme environments, along with complementary storage systems. Energy storage companies have also launched products specifically designed for photovoltaic applications.
Pylon Technologies, a leading domestic household storage provider, has introduced storage solutions tailored for photovoltaic applications, including energy storage cabinets for small commercial parks and low-voltage distribution areas. Similarly, the company SiG new energy has introduced systems that support “real-time charging and discharging” based on live photovoltaic generation and load conditions.
Additionally, many new products released by photovoltaic and storage companies cater to the power spot market. For example, Greewatts launched the NEXA 2000, a balcony energy storage device that integrates inverter functionality and scalable energy storage. This product includes an optimization feature that allows users to charge during off-peak hours and discharge during peak hours, significantly reducing electricity costs.
The collaborative efforts between photovoltaic and energy storage companies highlight a shared recognition that energy storage is essential for maximizing returns in the power spot market, thus opening vast market opportunities for both sectors.
