Since the suspension of mandatory energy storage regulations over a month ago, the energy storage market has seen an unexpected surge in activity. The partnership between new energy and energy storage is here to stay, albeit in a different form. On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a notification titled “Notice on Deepening the Market-oriented Reform of New Energy Grid Pricing to Promote High-Quality Development of New Energy” (referred to as Document No. 136). This document clearly stated that “the configuration of energy storage shall not be a prerequisite for the approval, grid connection, and power generation of new energy projects.” The announcement sparked significant concern in the energy storage industry regarding potential declines in storage demand.
However, more than a month after the policy was published, the reality has unfolded quite differently. Observations from Huaxia Energy Network reveal that local governments are rolling out policies to encourage energy storage integration in new energy projects. There is increasing emphasis on integrated projects that combine generation, grid, load, and storage, and demand for distributed solar energy storage is growing rapidly. Overall, the energy storage industry is swiftly transitioning from a “policy-driven” model to a “market-driven” one, entering a new and vigorous phase after a brief period of adjustment.
Local Willingness to Integrate Storage Grows
Following the halt of mandatory energy storage requirements, provinces like Yunnan and Guizhou have quickly introduced updated policies to encourage energy storage integration. On February 10, the day after Document No. 136 was issued, the Guizhou Provincial Energy Bureau released a draft for the “Management Measures for Wind and Solar Power Projects in Guizhou Province.” This draft states that projects included in the annual construction plan for wind and solar power must ensure grid connection and integrate more than 10% of the project’s installed capacity as energy storage (capable of two hours of operation) or purchase storage services. Projects that do not meet the timeline for completion beyond one year will not be allowed to connect to the grid.
The document also encourages orderly planning for new energy storage projects based on regional new energy construction, electricity load levels, and grid demands. It promotes the synchronous commissioning of new storage projects in areas with grid constraints alongside renewable energy projects and incentivizes project investors to voluntarily increase energy storage integration.
In early March, the Yunnan Provincial Energy Bureau issued a draft for the “Management Measures for the Construction and Operation of Energy Storage Projects in Yunnan.” This document outlines that a total of 175 new energy projects are included in Yunnan’s first batch of development plans for 2025, with a combined installed capacity of 14.48905 million kilowatts. It specifies that 10% of the installed capacity should be reserved for regulatory resources, which can be achieved through shared storage services.
Since the release of Document No. 136, two provinces have already announced policies to promote energy storage integration in new energy projects. It will be interesting to see if other provinces will follow suit.
The aim of halting mandatory energy storage was to allow the energy storage industry to return to its market fundamentals, letting genuine demand dictate its development. However, for local governments, energy storage remains a critical tool for enhancing the absorption of renewable energy and ensuring energy security. By implementing more flexible storage integration policies, local governments seek to find a new balance between policy guidance and market dynamics.
It is worth noting that prior to this, the projects requiring energy storage were mainly centralized renewable projects. Now, policies encouraging energy storage integration in distributed renewable energy projects are also increasing. Alongside the Guizhou management measures, a supporting policy was released on the same day, detailing the management implementation rules for distributed photovoltaic generation in Guizhou. This allows county-level energy authorities to guide investment entities in voluntarily constructing or leasing distributed storage facilities, employing models such as collaborative construction and shared leasing.
On March 17, the Ningxia Development and Reform Commission released a draft for the “Implementation Rules for the Management of Distributed Photovoltaic Generation in Ningxia,” which supports collaboration between local governments and upstream and downstream enterprises in the photovoltaic sector, including financial institutions, to promote integrated applications of “photovoltaic + energy storage.”
Integration of Generating, Grid, Load, and Storage
Since the announcement 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 instance, on March 5, Shandong issued a notification on the implementation rules for pilot projects integrating generation, grid, load, and storage, encouraging these initiatives to enhance renewable energy utilization and support the development of a new power system. On March 7, China Energy Construction announced its efforts to integrate the entire energy and computing supply chain through this model. On March 12, Luoyang, Henan Province, included 40 integrated projects in its 2025 government work report, and the Lingbao municipal government in Henan similarly mentioned plans for investments in integrated projects.
This integrated approach to energy management is a new operational model that considers generation, grid, load, and storage as a cohesive entity. It presents a win-win scenario for all parties involved: local governments can reduce carbon emissions and create new pathways for renewable energy consumption while supporting sustainable development; power generation companies can explore new development models under a changing policy environment; and electricity consumers can significantly reduce costs and enhance market competitiveness.
The financial sector is also taking notice of these integrated projects. Recently, the Bank of China’s Weihai branch issued the first loan for a pilot project integrating generation, grid, load, and storage in Shandong. Given the high costs and lengthy construction periods associated with these projects, the involvement of financial institutions can alleviate funding pressures for project developers while allowing banks to optimize their credit structures and enhance their support for the real economy.
Overall, the proactive promotion of integrated generation, grid, load, and storage projects is a natural response to the multi-faceted benefits they offer.
Unstoppable Fusion of Solar and Storage
Document No. 136 specifies that all new energy projects commencing operations after June 1, 2025, must participate in market competition. In response, Liu Yafang, an adjunct professor at Zhejiang University, has emphasized at various forums that renewable energy companies must consider the costs of system regulation and energy quality control to achieve favorable returns in future electricity market competition, making energy storage a strategic partner for high-quality development.
On March 23, GCL-Poly Energy (SZ:002015) indicated in a research report that green electricity generation enterprises would shift from reliance on subsidies to market competition, highlighting the growing importance of technological innovations like power forecasting and energy storage integration. The characteristics of solar energy generation, which can be unpredictable throughout the day, align well with energy storage that can adjust based on daytime fluctuations, increasing interest in the solar-storage integration.
At the first large-scale new energy exhibition in China following the release of Document No. 136, held in Jinan on March 5, it was evident that both solar and energy storage companies were prioritizing solar-storage integrated products and solutions. For instance, Sungrow Power Supply (SZ:300274) launched solutions for “zero-carbon parks, zero-carbon homes, and zero-carbon large industries,” leveraging integrated technologies across products, scenarios, data, and services. JA Solar (SZ:002459) introduced a comprehensive photovoltaic module solution designed for extreme environments, including deserts and oceans, and accompanying energy storage systems.
Energy storage companies are also developing storage products specifically tailored for photovoltaic applications. Pylontech (SH:688063), a leading player in home storage, has released storage products catering to small commercial parks and low-voltage distribution areas, including a 113 kWh air-cooled energy storage cabinet, and a 417 kWh direct current storage cabinet for larger commercial parks. Sig Energy, currently preparing for an IPO in Hong Kong, has introduced a commercial solar-storage system capable of flexible charging and discharging based on real-time solar generation and power load variations.
Additionally, recent product launches by various solar and energy storage companies have included offerings designed for electricity spot markets. For example, Gree Watt unveiled the NEXA 2000, an integrated solar-storage unit that includes inverter functionality and scalable storage capabilities. The NEXA 2000 optimizes usage time by charging from the grid during low-price periods and releasing stored power during peak pricing, significantly reducing electricity costs.
The mutual pursuit between solar and energy storage companies reflects a shared understanding that energy storage is essential for maximizing returns in the electricity spot market, opening vast opportunities for both sectors.
