Since the halt on mandatory energy storage requirements a month ago, the energy storage market has become even more vibrant. Local governments are attempting to find a new balance between policy guidance and market-driven initiatives.
The relationship between new energy and energy storage will persist over the long term, albeit in different forms. On February 9, the National Development and Reform Commission and the National Energy Administration jointly released a document aimed at deepening the market-oriented reform of electricity prices for renewable energy and promoting high-quality development in this sector. This document, referred to as “Document No. 136,” clearly stated that “the inclusion of energy storage as a precondition for the approval, grid connection, and online access of new renewable energy projects is prohibited.” This policy immediately stirred significant debate within the energy storage industry, raising concerns about a potential decline in energy storage demand.
More than a month has passed since this policy was issued, and recent observations by Hua Xia Energy Network indicate a markedly different reality. Local governments are actively introducing policies to encourage energy storage alongside renewable energy, emphasizing integrated projects involving generation, grid, load, and storage. The demand for energy storage in distributed solar energy systems is also increasing day by day. Overall, the energy storage sector is rapidly transitioning from being policy-driven to market-driven, ushering in a new era following some initial adjustments.
Increased Local Interest in Energy Storage
After the halt on mandatory storage requirements, provinces like Yunnan and Guizhou quickly rolled out new energy storage policies. On February 10, the day after the release of Document No. 136, the Guizhou Provincial Energy Bureau published a draft management regulation for wind and solar power projects. This document stipulated that projects included in the annual construction plans for wind and solar energy must ensure a guaranteed grid connection and allocate at least 10% of the installed capacity for energy storage or purchase storage services to meet a two-hour operational requirement. Projects that are delayed for more than a year beyond the scheduled timeline will not be allowed to connect to the grid.
The document also encourages the organized planning of new energy storage projects based on regional renewable energy construction scales, electricity load levels, and grid requirements. It promotes the simultaneous commissioning of new energy storage projects in areas with grid constraints alongside renewable energy projects and encourages project investors to voluntarily increase the proportion of energy storage allocated to wind and solar projects.
In early March, the Yunnan Provincial Energy Bureau issued a draft management regulation for energy storage projects, stating that 175 projects are included in the first batch of renewable energy development plans for 2025, with a total installed capacity of 14.48905 million kilowatts. These projects must also allocate 10% of their installed capacity for adjustment resources, which can be achieved by purchasing shared energy storage services.
Within a month of the release of Document No. 136, two provinces have already published policies to encourage energy storage alongside renewable energy. It remains to be seen whether other provinces will follow suit, which is a point of interest for industry observers. The national directive to halt mandatory energy storage aims to allow the energy storage sector to return to its market fundamentals, allowing real demand to take precedence. However, for local governments, energy storage remains a crucial tool for enhancing the consumption of renewable energy and ensuring energy security. The introduction of more flexible energy storage policies by local governments reflects their efforts to find a new balance between policy guidance and market forces.
It is noteworthy that previous projects requiring energy storage were primarily centralized renewable energy projects. Recently, there has been a growing trend of encouraging energy storage for distributed renewable energy generation projects.
On February 10, alongside the Guizhou management regulation, a supporting policy was released that allows county-level energy authorities to guide investors to voluntarily construct or lease distributed energy storage facilities based on local distributed solar development conditions. On March 17, the Ningxia Development and Reform Commission released a draft implementation guideline for distributed solar power development, which supports collaboration between local governments and upstream and downstream enterprises in the solar industry, as well as financial institutions to research and promote diversified applications for “solar + storage” and integrated energy storage solutions.
Leveraging Integrated Systems
Since the release of Document No. 136, the concept of “integrated generation, grid, load, and storage” has increasingly appeared in the work documents of major state-owned power enterprises and local governments. For example, in March alone, on the 5th, Shandong issued a notice encouraging the implementation of integrated systems to enhance the consumption and utilization of renewable energy and support the construction of a new power system. On the 7th, China Energy Engineering announced that it is integrating the entire energy and computing industry chain through integrated systems. On the 12th, a government work report from Luoyang, Henan, mentioned the implementation of 40 integrated projects for the year 2025. On the 18th, the Lingbao city government in Henan also reported plans to invest in a 1 billion yuan integrated project by Baoxin Electronics and Huaxin Copper Foil by the end of the year, alongside plans for over 14 additional integrated projects.
Integrated systems represent a new operational model that combines generation, grid, load, and storage into a cohesive planning and operational framework. This model offers multiple benefits: for local governments, it effectively reduces carbon emissions and opens new pathways for the consumption of renewable energy, aiding local sustainable development goals; for power generation companies, it serves as a novel approach to adapt to the market-oriented reforms of renewable energy pricing; and for electricity consumers, it functions similarly to a newly built renewable energy self-generation facility, significantly lowering electricity costs and enhancing market competitiveness.
Additionally, the financial sector is also eyeing the lucrative opportunities presented by integrated systems. Recently, the Bank of China in Weihai issued the first loan for a pilot integrated project in Shandong. The high costs and long construction periods associated with integrated systems necessitate substantial financial support. The involvement of financial institutions alleviates funding pressures on project developers while allowing banks to optimize their credit structures and enhance financial services to the real economy.
In summary, it is logical for regions to actively promote integrated systems, given the multi-faceted benefits they provide.
The Unstoppable Trend of Solar-Storage Integration
Document No. 136 specifies that all renewable energy projects launched after June 1, 2025, must participate in market competition. In light of this, Liu Yafang, a part-time professor at Zhejiang University, has stated in various forums that if renewable energy companies wish to achieve desirable returns in future electricity market competitions, they must consider system adjustment costs and power quality control costs. Energy storage will become a strategic partner vital to the future high-quality development of renewable energy.
On March 23, Xiexin Energy (SZ: 002015) disclosed in a research report that green power generation companies are shifting from reliance on subsidies to market competition, highlighting the increasing significance of technological innovation, such as solar power forecasting and energy storage integration.
Due to the inherent fluctuations of solar power during the day and the compatibility of energy storage for daytime adjustments, the integration of solar and storage is gaining increased attention in the industry. At the first large-scale renewable energy exhibition held after Document No. 136’s release on March 5, the China Jinan Solar Energy Comprehensive Energy Exhibition, both solar and energy storage companies showcased solar-storage integration products and solutions as key offerings.
For instance, Sungrow Power Supply (SZ: 300274) has introduced integrated solutions for three application scenarios: “zero-carbon park, zero-carbon family, and zero-carbon large industry,” utilizing integrated technology for seamless coverage in products, scenarios, data, and services. JA Solar Technology (SZ: 002459) launched a full-scene solar module solution that encompasses seven extreme environments, including deserts and polar regions, along with a corresponding energy storage system.
Energy storage companies have also released specialized products tailored for solar applications. Pylontech (SH: 688063), a leading domestic home storage provider, has launched energy storage products aimed at solar application scenarios, including a 113 kWh air-cooled energy storage cabinet for small commercial parks and low-voltage distribution areas, as well as a 417 kWh direct current energy storage cabinet for large commercial solar applications. The company Seg New Energy, which is preparing for a listing on the Hong Kong Stock Exchange, has introduced a commercial solar storage system that supports “charge and discharge on demand,” allowing for flexible charge and discharge scheduling based on real-time solar generation and electricity load changes.
Moreover, many of the new products recently launched by solar and energy storage companies are designed for the electricity spot market. For example, Greewatts has released the NEXA 2000 balcony solar storage product, which integrates inverter functions with expandable storage capabilities. The company states that the NEXA 2000 includes an optimization feature for charging during low-price periods and releasing stored electricity during high-price periods, significantly reducing electricity costs.
The mutual pursuit between solar and energy storage companies reflects the recognition that solar energy must integrate with energy storage to achieve greater benefits in the electricity spot market. This solar-storage integration opens vast market opportunities for both industries.
