One Month After Halting Mandatory Energy Storage Requirements, the Energy Storage Market is Thriving!
On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a notice regarding the deepening of market-oriented pricing reforms for renewable energy (referred to as Document 136). This document explicitly stated that “energy storage configuration should not be a prerequisite for the approval, grid connection, or operation of new renewable energy projects.” The announcement of this policy stirred significant concern within the energy storage sector, leading to fears of a decline in demand.
However, over a month later, observations from Huaxia Energy Network indicate a dramatically different scenario. Local governments are rolling out supportive policies for renewable energy storage, and there is growing emphasis on integrated projects combining generation, grid, load, and storage. The demand for energy storage, particularly in distributed photovoltaic systems, is on the rise. Overall, the energy storage industry is rapidly transitioning from being policy-driven to market-driven, ushering in a robust new era after a brief period of adjustment.
Local Governments are Increasingly Supportive of Energy Storage
After halting mandatory energy storage requirements, provinces like Yunnan and Guizhou quickly introduced updated policies to encourage energy storage. On February 10, just a day after the release of Document 136, the Guizhou Provincial Energy Bureau issued the “Draft Management Measures for Wind and Photovoltaic Power Projects in Guizhou Province,” stating that projects included in the provincial annual construction plan must achieve grid connection. They also require that at least 10% of the project capacity be allocated for energy storage (to meet a 2-hour operational requirement). Projects that exceed a year in completion time without being operational will not be allowed to connect to the grid.
Additionally, the document encourages the orderly planning of new energy storage projects based on regional renewable energy development, electricity load levels, and grid demands. New storage projects in areas with limited capacity are encouraged to be developed alongside renewable energy projects.
In early March, the Yunnan Provincial Energy Bureau released the “Draft Management Measures for Energy Storage Projects,” which included 175 renewable energy projects with a total capacity of 14.48905 million kilowatts for the first batch of development in 2025. These projects must also allocate at least 10% of their capacity for regulatory resources, which can be achieved through the purchase of shared energy storage services.
Notably, within a month of Document 136’s release, two provinces had already enacted policies promoting energy storage in renewable projects. The industry’s future response from other provinces is something to watch closely.
The purpose of halting mandatory energy storage requirements is to allow the energy storage industry to return to its market fundamentals, letting genuine demand dictate the market. Nonetheless, for local governments, energy storage remains a crucial tool for enhancing the consumption of renewable energy and ensuring energy security. With more flexible energy storage policies, local governments are attempting to strike a new balance between policy guidance and market-driven dynamics. It is also noteworthy that previous energy storage requirements primarily targeted centralized renewable energy projects, whereas policies encouraging distributed renewable energy projects are becoming increasingly prevalent.
On February 10, alongside the “Draft Management Measures for Wind and Photovoltaic Power Projects,” the Guizhou government also released the “Implementation Guidelines for the Development and Management of Distributed Photovoltaic Power Generation,” allowing county-level energy authorities to guide investors in voluntarily constructing or leasing distributed energy storage facilities based on local distributed photovoltaic development situations.
On March 17, the Ningxia Development and Reform Commission issued guidelines supporting deep cooperation between localities and upstream and downstream photovoltaic companies and financial institutions to promote diversified application scenarios, including “photovoltaic + energy storage” and integrated solar-storage-charging solutions.
The concept of “integrated generation, grid, load, and storage” has gained traction in documents from central state-owned electricity companies and local governments since the release of Document 136. For instance, on March 5, Shandong Province issued a notice encouraging the implementation of integrated generation, grid, load, and storage to enhance renewable energy consumption and support the construction of new-type power systems. By March 12, the government of Luoyang in Henan Province reported that it plans to implement 40 integrated generation, grid, load, and storage projects throughout the year.
Integrated Generation, Grid, Load, and Storage: A Win-Win Strategy
This integrated approach considers electricity sources, grids, loads, and storage as a cohesive system, providing benefits across multiple stakeholders. Local governments can effectively lower carbon emissions, create new pathways for renewable electricity consumption, and support sustainable development goals. For power generation enterprises, it offers a fresh strategy to adapt to market-oriented pricing reforms in renewable energy, while electricity consumers can significantly reduce costs and enhance market competitiveness, akin to having their own renewable energy power plants.
Financial institutions are also taking notice of the opportunities presented by integrated projects. Recently, the Bank of China in Weihai issued the first loan for such a pilot project in Shandong Province. The high costs and lengthy construction periods associated with these integrated projects necessitate substantial financial backing. The involvement of financial institutions alleviates funding pressures for project builders while enabling banks to optimize their loan structures and enhance their support for the real economy.
As such, the proactive promotion of integrated generation, grid, load, and storage initiatives is expected as a logical development in the sector.
The Integration of Photovoltaics and Energy Storage is Inevitable
Document 136 clearly states that all renewable power plants commencing operation after June 1, 2025, must participate in market competition. Liu Yafang, an associate professor at Zhejiang University, highlighted in various forums that renewable energy companies must consider system adjustment costs and energy quality control costs to achieve favorable returns in future electricity markets. Energy storage will become an indispensable strategic partner for the high-quality development of renewable energy.
On March 23, during a recent investor briefing, GCL-Poly Energy Technology announced that green power generation companies will shift from reliance on subsidies to market competition, emphasizing the growing importance of technological innovation, such as power forecasting and energy storage integration. The unique characteristics of photovoltaic energy generation, which fluctuates throughout the day, make energy storage a crucial match for addressing daytime energy demands.
At the first large-scale renewable energy exhibition in China following Document 136’s release, companies showcased their integrated photovoltaic and energy storage solutions as key products. For instance, Sungrow Power Supply introduced “zero carbon” solutions for parks, homes, and large industries, enabling comprehensive coverage across products, scenarios, data, and services. JA Solar launched a complete solution for extreme environments, including deserts and oceans, along with accompanying energy storage systems.
Storage companies are also rolling out products tailored for photovoltaic applications. Pylontech, a leading domestic energy storage provider, introduced storage solutions specifically designed for small commercial parks and low-voltage distribution scenarios. Additionally, Sige Energy’s commercial photovoltaic storage system offers “instant charge and discharge” capabilities that adapt to real-time variations in photovoltaic generation and electricity loads.
Moreover, recent product launches by various photovoltaic and energy storage companies include offerings aimed at the electricity spot market. For example, Gree Watt unveiled the NEXA 2000, a balcony energy storage unit that integrates inverter functionality and expandable storage. The NEXA 2000 features an optimization function that charges from the grid during low-price periods and releases stored energy during high-price periods, significantly reducing energy costs.
The mutual engagement between photovoltaic and energy storage enterprises highlights the necessity for energy storage integration to unlock greater profitability in the electricity spot market. This convergence presents expansive opportunities for both industries.
