It has been over a month since the suspension of the mandatory energy storage policy, and surprisingly, the energy storage market is thriving!
The relationship between new energy and energy storage is expected to endure, albeit in different forms. On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a notification aimed at deepening the market-oriented reform of renewable energy grid pricing and promoting high-quality development of new energy (hereinafter referred to as “Document No. 136”). This document clearly states that “energy storage configuration should not be a prerequisite for the approval, grid connection, or market access of new renewable energy projects.” Following the announcement of this policy, the energy storage industry experienced significant turbulence, raising concerns about diminishing demand for energy storage solutions. However, more than a month later, observations from Huaxia Energy Network indicate a markedly different reality. Local governments have begun to introduce policies encouraging the integration of renewable energy and energy storage, highlighting the importance of integrated projects involving generation, grid, load, and storage. Additionally, there is a growing demand for energy storage in distributed photovoltaic systems. Overall, the energy storage sector is rapidly transitioning from being “policy-driven” to “market-driven,” entering a new phase of robust growth after a short period of adjustment.
Local Willingness to Integrate Energy Storage Increases
In the wake of the suspension of the mandatory energy storage policy, provinces such as Yunnan and Guizhou have swiftly introduced new energy storage integration policies. On February 10, just one day after the release of Document No. 136, the Guizhou Provincial Energy Bureau published the “Management Measures for Wind and Photovoltaic Power Generation Projects in Guizhou Province (Draft for Comments).” This document states that projects included in the province’s annual construction plan for wind and photovoltaic power must ensure grid connection and provide energy storage of at least 10% of the installed capacity (to meet a two-hour operational requirement). It also mentions that projects not completed within a year of the stipulated timeline will not be allowed to connect to the grid. Furthermore, the document encourages the orderly planning and construction of new energy storage projects based on regional renewable energy development, power load levels, and grid demand. Projects facing grid constraints should synchronize the commissioning of new energy storage with renewable energy projects. Investment entities are encouraged to voluntarily increase the proportion of energy storage configurations and services for wind and photovoltaic projects.
In early March, the Yunnan Provincial Energy Bureau released the “Management Measures for Energy Storage Project Construction and Operation in Yunnan Province (Draft for Comments),” detailing that 175 projects will be developed under the province’s first batch of renewable energy projects for 2025, with a total installed capacity of 14.48905 million kilowatts. These projects are expected to incorporate energy storage resources equivalent to 10% of the installed capacity, which can be achieved through purchasing shared energy storage services. One notable project is the Yunnan Independent Energy Storage Project, which consists of a 300 MW/600 MWh demonstration facility.
Within less than a month of Document No. 136’s release, two provinces have enacted policies to encourage energy storage integration. Industry observers are keen to see if other provinces will follow suit. The national government’s decision to halt mandatory energy storage integration aims to restore the essence of market dynamics in the energy storage sector, allowing genuine demand to dictate the market. However, for local governments, energy storage remains a crucial tool for enhancing renewable energy consumption and ensuring energy security. By adopting more flexible energy storage policies, local authorities seek to find a new balance between policy guidance and market-driven initiatives. Notably, previous mandates for energy storage primarily applied to centralized renewable energy projects, but there is now a growing trend of policies encouraging energy storage integration for distributed renewable energy generation.
The “Implementation Rules for the Development and Construction of Distributed Photovoltaic Power Generation in Guizhou Province (Draft for Comments)” released alongside the Guizhou management measures on February 10 states that county-level energy authorities can guide investment entities to voluntarily construct or lease distributed energy storage facilities based on local distributed photovoltaic development. On March 17, the Ningxia Development and Reform Commission issued the “Implementation Details for Distributed Photovoltaic Power Generation Development and Construction in Ningxia Hui Autonomous Region (Draft for Comments),” which supports collaboration between local governments and upstream and downstream photovoltaic enterprises, as well as financial institutions, to explore diversified application scenarios such as “photovoltaic + energy storage” and integrated power storage charging.
Integration of Generation, Grid, Load, and Storage Gains Momentum
Since the announcement of Document No. 136, the concept of “integrated generation, grid, load, and storage” has increasingly appeared in the work documents of both central power enterprises and local governments. For instance, on March 5, Shandong Province issued a notice on the implementation details for integrated generation, grid, load, and storage pilot projects, encouraging the adoption of this model to enhance renewable energy consumption and contribute to the establishment of a new power system. On March 7, China Energy Construction announced that it is integrating the entire energy and computing power industrial chain through the “integrated generation, grid, load, and storage” approach. On March 12, Luoyang City in Henan Province announced in its 2025 government work report that it plans to implement 40 integrated generation and storage projects throughout the year. On March 18, the Lingbao City government in Henan also mentioned plans for a 1 billion yuan investment project in integrated generation and storage.
The integration of generation, grid, load, and storage represents a new operational model in the power sector that treats power sources, grids, loads, and storage as a unified whole. This multi-benefit model provides significant advantages: for local governments, the projects effectively reduce carbon emissions and create new pathways for renewable energy consumption, aiding in the achievement of sustainable development goals. For power generation companies, it offers a novel approach to adapting to market-oriented pricing reforms in the renewable energy sector. For consumers, it resembles establishing a new self-sufficient renewable energy power plant, greatly reducing electricity costs and enhancing market competitiveness. Additionally, the finance sector has also taken note of the lucrative opportunities presented by integrated generation and storage projects. Recently, Bank of China’s Weihai branch issued the first loan for a pilot integrated generation and storage project in Shandong Province. Given the high costs and lengthy construction periods associated with such projects, the involvement of financial institutions alleviates funding pressures for project developers while allowing banks to enhance their capacity to support the real economy.
In summary, the promotion of integrated generation, grid, load, and storage projects is a natural outcome, given the multiple benefits they offer.
The Unstoppable Fusion of Photovoltaic and Energy Storage
Document No. 136 specifies that all new energy power generation projects that commence operations after June 1, 2025, must participate in market competition. In response, Liu Yafang, a part-time professor at Zhejiang University, has emphasized in various forums that if renewable energy companies wish to achieve satisfactory returns in the future electricity market, they must consider system adjustment costs and power quality control costs, making energy storage a strategic partner in the high-quality development of renewable energy. On March 23, GCL-Poly Energy (SZ:002015) stated in its investor relations announcement that green power generation companies will shift from reliance on subsidies to market competition, highlighting the increasing importance of technological innovation, such as power generation forecasting and energy storage integration.
Due to the fluctuating nature of solar energy during the day, energy storage systems that provide daytime regulation are gaining prominence. On March 5, during China’s first major renewable energy exhibition following the release of Document No. 136, the China Jinan Solar Comprehensive Energy Exhibition, Huaxia Energy Network observed that both photovoltaic and energy storage companies prominently showcased integrated solar storage products and solutions. For instance, Sungrow Power Supply (SZ:300274) introduced integrated solutions for “zero carbon parks, zero carbon homes, and zero carbon large industries,” achieving comprehensive coverage in terms of products, scenarios, data, and services through its integrated technology. JA Solar Technology (SZ:002459) released a full-scenario photovoltaic module solution adaptable to seven extreme environments, along with associated energy storage systems. Energy storage companies are also launching products specifically designed for photovoltaic applications, such as Pylontech (SH:688063), which has developed energy storage products tailored for small commercial parks and low-voltage distribution areas.
Additionally, several new products targeting the electricity spot market have been launched by various photovoltaic and energy storage companies. For example, Gree Watt has unveiled the NEXA 2000 balcony energy storage unit, which integrates inverter capabilities with scalable energy storage functions. The NEXA 2000 features a time optimization function that allows for charging from the grid during low-price periods and discharging during high-price periods, significantly reducing electricity costs.
The engagement between photovoltaic and energy storage companies reflects a mutual recognition that energy storage is essential for securing additional revenue in the electricity spot market. The fusion of these two sectors is opening vast market opportunities for both industries.
