According to Official Ammount @PVMEN, the issuance of Document No. 136 has not only brought a major shock to the new energy industry represented by wind and solar power, but also sent a "chill" from the policy level to energy storage, which has benefited from the rapid growth of wind and solar installations during the "14th Five-Year Plan" period.
In fact, Document No. 136 only contains one sentence related to energy storage: "It is not allowed to make the configuration of energy storage a prerequisite for the approval, grid connection, and on-grid electricity sales of new renewable energy projects." However, this single sentence completely disrupted the current commercial logic of the domestic energy storage market. The mandatory co-location of energy storage at new energy power plants was terminated, and independent energy storage also lost its major source of profit – capacity leasing revenue.
Currently, the profit paths for independent energy storage power stations in China mainly include price arbitrage, ancillary services, new energy capacity leasing, capacity compensation, and other subsidies. In many provinces, new energy capacity leasing is the largest revenue-generating segment for independent energy storage power stations. How to find a way out for independent energy storage projects that are already in operation or about to be put into operation is a key concern for the energy storage industry and the energy authorities of various provinces.
Policy Changes in Energy Storage Profit Models
Compared to energy storage co-located with power generation, independent energy storage has always been regarded as the main path for the development of China's energy storage industry due to its advantages such as large scale, high calling frequency, and diverse revenue models. According to the China Electricity Council's "2024 Statistical Data on Electrochemical Energy Storage Power Stations," the newly added installed capacity of independent energy storage in 2024 was 23.22 GW, an increase of over 150% year-on-year, becoming the largest type of electrochemical energy storage.
However, behind this, the revenue model of independent energy storage is still constrained by various uncertainties. For example, according to the policy guidance of various provinces, the guiding price for energy storage capacity leasing is about 150-350 yuan/kWh/year, with a lease term of more than 5 years. However, this is not the case in actual implementation.
"New energy power plants basically sign a lease for independent energy storage capacity every 1-3 years. Even if they sign for 3 years, if the new energy power plant does not renew the lease later, there will be a problem of guaranteed revenue," said a central enterprise, whose independent energy storage power station in an eastern province ultimately failed to pass the investment decision meeting due to this uncertainty. "From the perspective of leasing prices, there is also the uncertainty of a continuous decline, with actual transaction prices ranging from about 20-200 yuan/kWh/year."
In addition to the leasing price, not all the capacity of independent energy storage power stations can be fully leased out. In 2024, nearly one-third of the capacity of a central enterprise's independent energy storage power station in Shandong Province has not been leased out through market-based means. "The final result is likely to be a left-hand-to-right-hand transaction, used by our own group."
With the issuance of Document No. 136, this uncertainty has been further amplified. It is understood that in independent energy storage power stations in provinces such as Jiangsu and Shandong, capacity leasing accounts for 60% of the total revenue. "Without subsequent policy衔接 (xiánjiē - connection/coordination), this means that independent energy storage completely loses the revenue from capacity leasing, and many projects that have been put into operation or are under construction will lose their main source of income and face the risk of investment losses."
On the other hand, from the macro perspective of overall energy supply security and peak shaving pressure, independent energy storage also plays a pivotal role in many provinces. Taking Jiangsu as an example, in order to solve the problem of power supply during the high-temperature season, Jiangsu built 5.4 GW of independent energy storage power stations in one go before the high temperatures in 2024. This 5 GW of peak shaving capacity played an important role 20 days later when Jiangsu Province faced extremely tight power supply and demand during the peak summer season.
For provinces like Jiangsu, where power supply and demand are still tight during special periods, and for some provinces with peak shaving and frequency regulation needs, the value of energy storage is clearly visible. How to maintain the continuous operation of independent energy storage power stations after Document No. 136 is an urgent matter for the next stage of policy formulation.
"While promoting the mechanism-based electricity price policy, the provincial energy bureau is more worried that after Document No. 136, the energy storage co-located with new energy indicators during the previous competitive allocation will no longer have the motivation for investment and construction, and how to introduce policies to support the development of energy storage in the future," Guangfu Men learned from an energy authority in an East China province. The situation similar to Jiangsu is not an isolated case.
Obviously, this point is already a consensus in the industry.
Wang Yunshan, General Manager of Shanxi Fengpin Energy, stated at the 2024 Review and 2025 Outlook Forum of the Energy Storage Industry that the implementation policies of Document No. 136 in various provinces should not only consider new energy itself but also the adjustment of the revenue models of energy storage power stations in operation and those planned and under construction.
Energy Storage Enters a "Painful" Transition Period
Document No. 136 has brought many uncertainties to the development of the energy storage industry. However, from the perspective of objective evaluation of industry development, it is generally believed in the industry that Document No. 136 will promote energy storage from "passive co-location" to "active choice," which is more conducive to the healthy and sustainable development of the energy storage industry.
From being a supporting role in wind and solar power development to becoming an important participant in the energy system, although it has lost direct policy support, the "pain" of the current transition period in the energy storage industry still needs to be supported and guaranteed from multiple dimensions.
"Relying solely on policy subsidies is quite difficult; more market-based revenue needs to be added," Wang Yunshan added. First, energy storage should be allowed to participate in the ancillary service market as an independent entity. Energy storage has comprehensive benefits, including peak shaving and frequency regulation capabilities. Opening up the ancillary service market and allowing energy storage to compete with other entities providing ancillary services will also impose requirements on quality. Second, capacity pricing should be considered, allowing energy storage to partially obtain a certain capacity price and participate in the allocation of capacity fees. Provinces can customize the specific types of ancillary services needed based on their own situations.
Han Xiaoqi, Deputy Secretary-General of the China Energy Storage Alliance for Innovation, also mentioned that the new energy storage industry is currently in a nurturing period, and timely adjustments and price mechanisms that align with the development stage are crucial for the industry's confidence. During the transition from policy-driven to market-driven, it is recommended to focus on two aspects.
"On the one hand, the cost of new energy storage has changed significantly in recent years, but revenue in the electricity energy market and ancillary service market is difficult to fully cover the cost, requiring policy support such as a two-part electricity price tailored to the situation. On the other hand, the vitality and resilience of new energy storage lie in its diversity. It is recommended to clarify the technical functions and application value of energy storage based on the underlying pricing logic of economics. Research and explore price mechanisms for different combinations of functional labels to support and guide different technological routes."
In fact, the calls and suggestions for policies and mechanisms reflect the current hidden concerns of the energy storage industry facing "transformation" and upgrading. In Document No. 136, wind and solar power are still the protagonists of this policy, but after the cancellation of mandatory energy storage, the core investment logic of energy storage power stations has also faced the risk of subversion.
"When we invested in independent energy storage power stations three years ago, we tried our best to select regions with a lower proportion of capacity leasing revenue in our financial calculations because the mandatory co-location model was known to be unsustainable across the industry," said an industry insider deeply involved in energy storage investment. "Document No. 136 also proves that our previous investment logic was correct."
"The industry only saw Document No. 136's cancellation of mandatory co-location, but it should also be noted that widening the spot price difference actually further proves the investment value of independent energy storage power stations. Moreover, with the increase in wind and solar power construction scale, energy storage as a flexible regulation resource has increasing investment value, but the value calculation requires more precise and detailed boundary factors, including research on policy rules and market mechanisms, power station site selection, nodal prices, and regional characteristics."
This coincides with Wang Yunshan's view: "While strengthening the design of market mechanisms, we should also strengthen the construction planning of energy storage power stations. The site selection of energy storage is related to geographical structure and load demand. We hope that from the national level and the policy research level of various provinces and cities, energy storage will be regarded as an important element of power and energy planning."
Whether it is wind power, photovoltaic, or energy storage, they will all usher in a new stage of development under Document No. 136. However, it is certain that this new journey will be full of challenges, but the industry needs to strengthen its internal capabilities and break through bottlenecks in multiple dimensions such as products, standards, costs, markets, and investment.
Source：https://mp.weixin.qq.com/s/wVthmcdbuqooMAPdo3bRoA
