One Month After the Suspension of 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 to deepen the market-oriented reform of electricity pricing for renewable energy and promote high-quality development in this sector. This document, referred to as Document No. 136, clearly states that energy storage should not be a prerequisite for the approval, grid connection, or electricity access of new renewable energy projects.
Immediately following this policy announcement, there was considerable concern within the energy storage industry regarding the potential decline in storage demand. However, over a month has passed since the policy was issued, and the situation has unfolded quite differently. Observations from Huaxia Energy Network indicate a surge in local governments launching supportive energy storage policies for renewable energy, an increased emphasis on integrated projects involving sources, grids, loads, and storage, and a rising demand for energy storage from distributed solar power systems.
Overall, the energy storage industry is rapidly transitioning from being policy-driven to market-driven, entering a new phase of robust growth following a brief period of adjustment.
Local Willingness to Support Energy Storage is Increasing
In response to the suspension of mandatory energy storage requirements, provinces such as Yunnan and Guizhou have swiftly introduced new energy storage policies. On February 10, just a day after Document No. 136 was released, the Guizhou Provincial Energy Administration issued a draft management regulation for wind and solar energy projects. This regulation specifies that projects incorporated into the annual construction plan for wind and solar energy in the province must ensure connection to the grid and install energy storage systems that meet at least 10% of their capacity (sufficient for two hours of operation). Projects that fail to be completed within the stipulated timeframe will not be allowed to connect to the grid.
Additionally, these guidelines encourage the orderly planning of new energy storage projects based on regional renewable energy construction scales, power load levels, and grid demands. New energy storage projects in areas with grid limitations are expected to be launched simultaneously with renewable energy projects. Investment entities are also encouraged to voluntarily increase the proportion of energy storage in their solar and wind projects.
In early March, the Yunnan Provincial Energy Administration released a draft management regulation for energy storage projects, noting that 175 new energy projects are set to be developed in 2025, with a total installed capacity of 14,489,050 kW. These projects must also incorporate at least 10% of their capacity for regulatory resources, which can be achieved through purchasing shared energy storage services.
Within a month of the announcement of Document No. 136, two provinces have already released encouraging energy storage policies for renewable energy. It remains to be seen whether other provinces will follow suit. The central government’s decision to suspend mandatory energy storage requirements aims to allow the energy storage industry to return to its market roots and respond to genuine demand. For local governments, however, energy storage remains a crucial tool for enhancing the consumption of renewable energy and ensuring energy security. By introducing more flexible energy storage policies, local authorities are seeking a new balance between policy guidance and market dynamics.
Notably, previous energy storage requirements primarily targeted centralized renewable energy projects. Now, there is a growing trend of policies encouraging distributed renewable energy generation to integrate energy storage. Alongside the Guizhou draft management regulation, a set of guidelines for the management of distributed solar energy project development was also released, allowing county-level energy authorities to guide investment entities in voluntarily establishing or leasing distributed energy storage facilities.
On March 17, the Ningxia Development and Reform Commission published a draft management guideline for the development of distributed solar energy projects, emphasizing support for collaborations with upstream and downstream solar enterprises and financial institutions to promote diversified applications, such as the integration of solar power and energy storage.
Leveraging “Integrated Source-Grid-Load-Storage”
Since the publication of Document No. 136, the concept of “Integrated Source-Grid-Load-Storage” has increasingly appeared in the operational documents of power state-owned enterprises and local governments. For instance, on March 5, Shandong issued a notice on the implementation details of integrated source-grid-load-storage piloting to promote the consumption of renewable energy; on March 7, China Energy Construction announced its ongoing integration of the entire energy and computing chain through this model; and on March 12, Luoyang City in Henan announced plans to implement 40 integrated source-grid-load-storage projects throughout the year.
This integrated approach to energy management combines sources, grids, loads, and storage into a cohesive operational model, creating a win-win situation for multiple stakeholders. Local governments benefit from reduced carbon emissions and enhanced paths for renewable energy consumption, while power generation companies explore new development models in response to market-oriented pricing reforms. For electricity consumers, this model acts like a new self-supplied renewable energy power plant, significantly lowering electricity costs and enhancing competitiveness.
Financial institutions are also taking notice of integrated source-grid-load-storage projects. Recently, the Bank of China in Weihai issued the first loan for a pilot project in Shandong. Given the high costs and long construction periods associated with this model, financial support alleviates funding pressures for project developers while allowing banks to optimize their credit structures and enhance their capacity to serve the real economy.
In light of these advantages, it is only natural for local governments to actively promote integrated source-grid-load-storage initiatives.
The Integration of Solar Power and Energy Storage is Inevitable
Document No. 136 states that all renewable energy projects commencing 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 for renewable energy enterprises to achieve desired returns in future electricity markets, they must consider system adjustment costs and electricity 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) noted in a research report that green power generation enterprises would shift from reliance on subsidies to market competition, highlighting the importance of technological innovation, such as power forecasting and energy storage integration. Given the fluctuating nature of solar power generation and the need for day-time energy adjustments, the integration of solar power and energy storage is gaining increasing attention in the industry.
At the first large-scale renewable energy exhibition in China after the issuance of Document No. 136, held in Jinan on March 5, it was evident that both solar and energy storage companies were promoting integrated solutions. For example, Sungrow Power Supply (SZ:300274) introduced integrated solutions for three application scenarios: zero-carbon parks, zero-carbon homes, and zero-carbon large industries, achieving comprehensive coverage in terms of products, scenarios, data, and services through integrated technology. JA Solar (SZ:002459) unveiled solutions for all scenarios involving photovoltaic components, addressing extreme environments and offering supporting energy storage systems.
Energy storage companies are also launching products tailored to solar application scenarios. For instance, Pylontech (SH:688063), a leading provider of household energy storage in China, has developed energy storage products designed for small commercial parks and low-voltage distribution areas, introducing a 113 kWh air-cooled energy storage unit and a 417 kWh energy storage DC cabinet for larger commercial parks. Additionally, SiG Energy, which is set to list on the Hong Kong Stock Exchange, has launched a commercial solar energy storage system that supports flexible charging and discharging based on real-time variations in solar generation and electricity consumption.
Furthermore, many recent products introduced by solar and energy storage companies are aimed at the power spot market. For instance, GoodWe’s NEXA 2000 balcony energy storage product integrates inverter functions with scalable storage capabilities. It includes an optimization feature that helps reduce electricity costs by charging from the grid during low-price periods and discharging stored electricity during high-price periods.
The reciprocal efforts of solar and energy storage companies underscore the understanding that solar energy must integrate with energy storage to maximize revenue potential in the power spot market, thereby opening vast market opportunities for both industries.
