One Month After Halting Mandatory Energy Storage Requirements, the Energy Storage Market is Thriving!
March 28, 2025 – Source: Blue Whale Finance
The relationship between new energy and energy storage is set to persist over the long term, albeit in different forms. 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 electricity pricing for new energy and promoting its high-quality development (hereinafter referred to as “Document 136”). The document clearly stated that “the requirement for energy storage configuration should not be a prerequisite for the approval, grid connection, or online access of new energy projects.” Following the announcement of this policy, concerns arose in the energy storage industry about a potential decline in storage demand. However, more than a month later, observations from Huaxia Energy Network & Huaxia Storage (WeChat public account hxcn3060) reveal a markedly different reality: local governments are introducing policies to encourage the integration of energy storage with new energy sources, and there is an increasing demand for energy storage associated with distributed photovoltaic (PV) systems. Overall, the energy storage sector is rapidly transitioning from being “policy-driven” to “market-driven,” entering a new phase filled with potential after a brief period of adjustment.
Local Storage Integration Intentions on the Rise
After the cessation of mandatory energy storage requirements, provinces such as Yunnan and Guizhou quickly rolled out new energy storage policies. On February 10, just one day after the release of Document 136, the Guizhou Provincial Energy Bureau issued the “Management Measures for Wind and Photovoltaic Power Generation Projects in Guizhou Province (Draft for Public Consultation).” This document stated that projects included in the province’s annual construction plan for wind and photovoltaic power must provide at least 10% of their installed capacity (to meet a two-hour operational requirement) in energy storage or purchase energy storage services to ensure grid connection. Additionally, it emphasizes encouraging the orderly planning of new energy storage projects based on regional capacity, power load levels, and grid demand. New energy storage projects in constrained areas should be synchronized with new energy projects in their commissioning.
In early March, the Yunnan Provincial Energy Bureau released the “Management Measures for Energy Storage Project Construction and Operation in Yunnan Province (Draft for Public Consultation),” stating that 175 new energy projects collectively with an installed capacity of 1,448.905 MW will be developed in the first batch of projects for 2025. Energy storage solutions must also be configured at 10% of the installed capacity through purchasing shared energy storage services.
Within a month of Document 136’s release, two provinces had introduced policies encouraging energy storage integration with new energy. It remains to be seen whether other provinces will follow suit, a development that the industry is closely monitoring. The national decision to halt mandatory storage requirements aims to return the energy storage sector to its market essence, allowing real demand to determine the market dynamics. However, for local governments, energy storage remains a crucial tool for enhancing new energy absorption and ensuring energy security. By implementing more flexible energy storage policies, local governments are attempting to strike a new balance between policy guidance and market forces.
Integration of Energy Supply, Grid, Load, and Storage
Since the release of Document 136, the concept of “integrated energy supply, grid, load, and storage” has increasingly appeared in work documents from both state-owned power companies and local governments. For instance, on March 5, Shandong released “Implementation Rules for Integrated Energy Supply, Grid, Load, and Storage Pilot Projects,” promoting this integration as a means to enhance new energy absorption and support the construction of a new power system. On March 7, China Energy Construction announced its efforts to integrate the entire energy and computing power supply chain through this model. Subsequent reports from various provinces highlighted the implementation of numerous integrated projects.
The integrated model combines energy sources, the grid, energy load, and storage into a cohesive operational framework. This approach benefits multiple stakeholders: for local governments, it effectively reduces carbon emissions and opens new pathways for absorbing renewable energy, aiding in achieving sustainable development goals; for power generation companies, it presents a new opportunity to adapt to market changes in electricity pricing; and for consumers, it functions similarly to a new self-sufficient power plant, significantly lowering energy costs and enhancing market competitiveness.
Moreover, the financial sector has also recognized the potential of integrated energy projects. Recently, the Bank of China’s Weihai branch issued the first loan for a pilot integrated energy project in Shandong, alleviating the financial pressure on project developers while allowing banks to optimize their lending structures and enhance financial services for the real economy.
The Inevitable Rise of Solar and Storage Integration
Document 136 specifies that all new energy power generation projects launched after June 1, 2025, must participate in market competition. In response, Liu Yafang, a part-time professor at Zhejiang University, has emphasized at several forums the necessity for new energy companies to consider system regulation costs and power quality control to secure favorable returns in the future electricity market. Energy storage will become a strategic partner in the high-quality development of new energy.
On March 23, GCL-Poly (SZ:002015) revealed in a research disclosure that green energy companies will shift from dependence on subsidies to market competition, highlighting the growing importance of technological innovation, such as power forecasting and energy storage integration. The unique characteristics of solar energy, which fluctuates during the day, align well with energy storage solutions that can adjust accordingly, thus increasing the industry’s focus on solar-storage integration.
At the first major new energy exhibition in China following Document 136, held in Jinan on March 5, both solar and energy storage companies showcased integrated products and solutions as their primary offerings. For example, Sungrow Power Supply (SZ:300274) launched an integrated solution for “zero carbon parks, zero carbon homes, and zero carbon industries,” covering all aspects from products to scenarios, data, and services. JA Solar (SZ:002459) unveiled a comprehensive solution for photovoltaic components designed for extreme environments, along with corresponding energy storage systems. Energy storage companies are also introducing products tailored for solar applications.
In conclusion, the active pursuit of solar-storage integration by both sectors is driven by the realization that solar energy must incorporate storage to maximize revenue in the electricity market, effectively opening new market opportunities for both industries.
