Since the announcement to halt mandatory energy storage requirements, the energy storage market has actually gained momentum. On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a notice aimed at deepening the market-oriented reform of the on-grid electricity prices for renewable energy and promoting its high-quality development. This document, referred to as “Document No. 136,” clearly stated that “energy storage configurations should not be a prerequisite for the approval, grid connection, or on-grid operation of new renewable energy projects.” Following this policy change, concerns about a shrinking demand for energy storage in the industry surfaced. However, over a month later, observations from Huaxia Energy Network indicate a vastly different scenario. Local governments have begun to introduce policies encouraging energy storage configurations, with a growing emphasis on integrated projects involving source, grid, load, and storage, as well as an increasing demand for energy storage in distributed photovoltaic systems.
Overall, the energy storage sector is quickly shifting from being driven by policy to being propelled by market forces, entering a new phase of growth following a brief period of adjustment. In the wake of the halt on mandatory energy storage configurations, provinces like Yunnan and Guizhou have rapidly launched updated policies supporting energy storage. For instance, on February 10, just a day after the issuance of Document No. 136, the Guizhou Energy Bureau released a draft management approach for wind and photovoltaic power projects. This draft states that projects incorporated into the province’s annual construction plan must ensure grid connection and meet a minimum energy storage capacity of 10% of the installed capacity (sufficient for two hours of operation). Projects that fail to meet these timelines by over a year will not be allowed to connect to the grid.
The document also encourages the orderly planning and construction of new energy storage projects based on local renewable energy development scales, electricity load levels, and grid demands. It advocates for the simultaneous commissioning of new energy storage projects and renewable energy projects in areas with grid restrictions. Furthermore, it encourages project investors to voluntarily increase their energy storage configurations and services for wind and photovoltaic energy projects.
In early March, the Yunnan Energy Bureau issued a draft management approach for energy storage projects supporting renewable energy configurations, including 175 projects with a total installed capacity of 1,448.905 MW scheduled for implementation in the first batch of 2025 projects. These projects will also include the requisite 10% adjustment resources and may utilize shared energy storage services. Notably, Yunnan is home to the largest independent energy storage project in China, the Yongren Zhixin 300 MW/600 MWh independent energy storage demonstration project.
Within less than a month after the release of Document No. 136, two provinces have issued encouraging policies for energy storage configurations. The industry is keenly observing whether other provinces will follow suit. The national halt on mandatory energy storage aims to realign the storage sector with market fundamentals and allow genuine demand to dictate the landscape. However, local governments continue to view energy storage as a crucial tool for enhancing renewable energy consumption and ensuring energy security. They are now implementing more flexible storage policies, aiming to strike a new balance between policy guidance and market dynamics.
Interestingly, the previous energy storage requirements primarily targeted centralized renewable energy projects. Now, there is a growing number of policies encouraging energy storage configurations for distributed renewable energy projects. For example, on February 10, the supporting policy for the Guizhou management approach was released alongside the “Implementation Guidelines for the Development and Construction of Distributed Photovoltaic Power Generation in Guizhou,” which allows county-level energy authorities to guide investors in voluntarily constructing or leasing distributed energy storage facilities based on local development conditions.
Moreover, on March 17, the Ningxia Development and Reform Commission released guidelines for the management of distributed photovoltaic power generation that support deep collaboration with upstream and downstream photovoltaic developers and financial institutions to promote diversified applications such as “photovoltaics + energy storage” and integrated energy storage charging systems.
Since the issuance of Document No. 136, the concept of “source, grid, load, and storage integration” has increasingly appeared in the work documents of central state-owned enterprises and local governments. For instance, on March 5, Shandong issued a notice on implementing the pilot details for source, grid, load, and storage integration, encouraging its application to enhance the consumption of renewable energy and support the construction of a new power system. On March 7, China Energy Construction announced its integration of the entire energy and computing power industry chain through this model. Similarly, on March 12, the government report from Luoyang, Henan province, stated that 40 integration projects would be implemented in 2025, and on March 18, the Lingbao city government in Henan announced its plan to invest 1 billion yuan in a source, grid, load, and storage integration project before the end of the year, with ambitions to plan over 14 additional projects.
Source, grid, load, and storage integration represents a new operational model for electricity that plans and operates power generation, grid, load, and energy storage as a cohesive unit. This model benefits all parties: for local governments, it effectively reduces carbon emissions and opens new pathways for renewable energy consumption, helping achieve local green and sustainable development goals; for generation companies, it serves as a novel approach to address the challenges of market-oriented pricing for renewable energy; and for electricity consumers, it resembles a newly established renewable energy self-sufficient power plant, significantly lowering electricity costs and enhancing market competitiveness.
Moreover, the financial sector has taken notice of the potential of source, grid, load, and storage integration projects. Recently, the Bank of China’s Weihai branch issued the first loan for a source, grid, load, and storage integration pilot project in Shandong. Given that these projects often involve high costs and extended construction periods, the involvement of financial institutions alleviates funding pressures on project developers while simultaneously optimizing the banks’ credit structures and enhancing their ability to serve the real economy.
In conclusion, the proactive promotion of source, grid, load, and storage integration projects across various regions is a natural development, given the multiple benefits they provide. The integration of energy storage and photovoltaics is becoming increasingly unavoidable. Document No. 136 specifies that all renewable energy projects put into operation after June 1, 2025, must participate in market competition. In response, Liu Yafang, a part-time professor at Zhejiang University, recently stated at several forums that renewable energy companies must account for system adjustment costs and power quality control costs to achieve favorable returns in future electricity market competitions. Energy storage will prove to be a strategic partner for the high-quality development of renewable energy.
On March 23, Xiexin Energy Technology (SZ:002015) disclosed in its investor relations announcement that green electricity generation enterprises would transition from “subsidy dependency” to market competition, highlighting the growing importance of technological innovation, such as power prediction and energy storage integration. Due to the fluctuating characteristics of photovoltaic energy generation during the day, energy storage systems suitable for daytime regulation are increasingly gaining industry attention.
During the first large-scale renewable energy exhibition in China after the release of Document No. 136—held on March 5 in Jinan—both photovoltaic and energy storage companies showcased their integrated products and solutions for energy storage. For instance, Sungrow Power Supply (SZ:300274) introduced an integrated solution for “zero-carbon parks, zero-carbon homes, and zero-carbon industries,” covering all aspects of product, scenario, data, and services through integrated technology. JA Solar Technology (SZ:002459) released a full-scenario photovoltaic module solution designed for seven extreme environments, along with supporting energy storage systems. Energy storage companies have also launched products specifically tailored for photovoltaic applications.
Pylon Technologies (SH:688063), a leading domestic energy storage company, has introduced storage products designed for photovoltaic applications, such as 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 parks. Additionally, the firm Sig Solar, which is preparing for an IPO in Hong Kong, has launched a commercial solar energy storage system capable of supporting “real-time charge and discharge” functionality, allowing flexible charge and discharge scheduling based on real-time photovoltaic generation and load changes.
Moreover, several newly launched products from various photovoltaic and energy storage companies have targeted the electricity spot market. For example, Gree Watt has introduced the NEXA 2000 balcony energy storage unit, which integrates inverter functions and expandable storage capabilities. The NEXA 2000 features an optimized usage time function, which helps reduce electricity costs by charging from the grid during low-price periods and releasing stored electricity during high-price periods, resulting in significant savings.
The mutual engagement between photovoltaic and energy storage companies underscores the necessity for photovoltaic systems to integrate energy storage to maximize profitability in the electricity spot market. This collaboration between energy storage and photovoltaic sectors opens extensive market opportunities for both industries.
