Even during holidays, last weekend (January 31st to February 1st), energy storage developers are still urgently filing for energy storage power station development projects.

This is because on the evening of January 30th, the National Development and Reform Commission and the National Energy Administration issued the "Notice on Improving the Capacity Pricing Mechanism on the Power Generation Side" (hereinafter referred to as "Document No. 114"), which redefined the capacity pricing mechanism for coal-fired power units and pumped storage units, clarified that provincial price authorities can establish a capacity pricing mechanism for natural gas power generation, and for the first time included new energy storage power stations in the capacity pricing mechanism.

Under the capacity pricing mechanism, coal-fired power units, pumped storage units, etc. can obtain a certain fixed income based on their costs to compensate for their role in supporting the stable and safe operation of the power grid. The capacity electricity fee will be included in the operating cost of the power grid system.

After the new energy storage power station is included in the capacity pricing mechanism, it means that it can also obtain a certain degree of fixed income.

The inclusion of new energy storage in the capacity pricing mechanism marks the formation of a complete revenue map for independent new energy storage. Through the collaborative efforts of the three major beneficiary sectors of electric energy, auxiliary services, and capacity pricing, 2026 will become the first year of market-oriented development for independent new energy storage, "said Li Zhen, Deputy Secretary General of Zhongguancun Energy Storage Industry Technology Alliance.

According to the relevant policies that have been released, a typical 100MW energy storage power station can generate profits of over 10 million yuan under the capacity pricing mechanism.

But industry insiders also told reporters that according to the content of Document No. 114, energy storage power stations cannot "lie flat", but need to further improve their operational capabilities and technological level in order to "earn this money".

Tian Qingjun, Senior Vice President of Far East Energy, stated that in the past, the energy storage industry has been caught in an irrational price war "involution", and market competition has evolved into a cruel "cost bottom line" competition, which has far-reaching harm beyond the commercial scope. What's even more serious is that some companies, in order to survive, sell below cost price and may fulfill their obligations by cutting corners and using inferior battery cells, which will seriously sacrifice the long-term operational efficiency and safety of the power station and lay huge hidden dangers for the industry.

After the release of Document No. 114, energy storage power stations with better product quality, higher system efficiency, and better operational services can obtain more profits, which greatly mobilizes the enthusiasm of energy storage enterprises to increase research and development investment. In the long run, this mechanism will promote the energy storage industry to shift from a stage of 'scale competition' to a stage of high-quality development of 'technology competition and reliability competition', "said Tian Qingjun.

In the future, a reliable capacity compensation mechanism will be established

The capacity pricing mechanism has always been regarded as a "guaranteed income", as long as a power station is built, it can receive income according to a certain proportion of fixed costs. But under the framework of Document No. 114, this "guaranteed income" may change in the future.

Article 114 specifies that after the continuous operation of the electricity spot market, the provincial price regulatory department shall, in conjunction with relevant departments, establish a reliable capacity compensation mechanism in a timely manner, and compensate for the reliable capacity of the units according to a unified principle. The compensation scope of the reliable capacity compensation mechanism can include coal-fired power, gas-fired power, and grid side independent new energy storage that independently participate in the local market, and gradually expand to other units with reliable capacity such as pumped storage, in combination with the construction of the electricity market and the market-oriented reform of electricity prices; Do not provide duplicate compensation for capacity that receives other guarantees. Units priced by the government will not be compensated.

The new capacity electricity pricing standard will shift from a single fixed cost to "based on compensating for the fixed costs that cannot be recovered by marginal units in the electricity and ancillary service markets, reasonably determined by considering factors such as electricity supply and demand, user affordability, and progress in electricity market construction, and adjusted in a timely manner." This is stated in Document No. 114.

The report released by Bloomberg New Energy Finance points out that in the future, capacity electricity prices will increasingly reflect the reliable capacity situation of various regions, rather than a single national benchmark. The competition between power generation and energy storage technologies will revolve around sustained and stable power supply capacity during peak periods, rather than solely relying on installed capacity.

Under the reliable capacity compensation mechanism, regardless of the technology used, as long as it can provide flexibility for the power system, compensation can be obtained; technologies with higher flexibility will also have higher benefits, "Tian Qingjun also told reporters.

At present, the power system is in need of more flexible resources to cope with the growing installed capacity of wind and solar new energy.

According to the "2025 National Electricity Statistics Data" released by the National Energy Administration, as of the end of 2025, the installed capacity of solar power generation will be 1.2 billion kilowatts, a year-on-year increase of 35.4%; The installed capacity of wind power was 640 million kilowatts, a year-on-year increase of 22.9%.

The report "Market based Capacity Compensation Mechanism for Energy Storage" released by Zhongguancun Energy Storage Industry Technology Alliance (hereinafter referred to as the "report") points out that the rapid growth of wind and solar power installation will mainly bring three typical regulatory demands: first, the rapid ramp up demand caused by the low generation of photovoltaic power during sunset time; second, the demand for peak shaving during the day; third, the demand for peak power supply under the rapid increase of new energy installation and the continuous growth of electricity load in the whole society.

The report predicts that in order to meet the capacity adequacy requirements of the power system, approximately 300GW of new energy storage installed capacity will need to be built nationwide by 2030.

Supplement the income of energy storage power stations

By 2025, the scale of new energy storage installed capacity will reach a new high, but the industry still has not explored a mature business model. The implementation of capacity pricing mechanism is conducive to the capital market regaining confidence in the development of energy storage power stations, "said Tian Qingjun.

According to data from the National Energy Administration, by the end of 2025, the installed capacity of new energy storage systems that have been built and put into operation nationwide will reach 136 million kilowatts/351 million kilowatt hours, a year-on-year increase of 87%.

Tian Qingjun told reporters that the mandatory allocation and storage of new energy is one of the direct reasons for the rapid increase in the installed capacity of new energy storage in recent years.

Currently, independent energy storage projects and new energy distribution and storage projects used for capacity leasing are the absolute mainstay of new energy storage projects put into operation in China. In 2025, the total newly installed capacity of the two will be nearly 60GW, a year-on-year increase of 50%, accounting for about 90%.

Capacity leasing refers to new energy enterprises that need to build energy storage power stations, which can lease or purchase independent new energy storage project capacity within the province. The core reason why new energy enterprises are willing to pay for leasing or purchasing is that configuring energy storage is still a prerequisite for the approval, grid connection, and grid connection of new energy projects.

Li Zhen stated that in early 2025, the National Development and Reform Commission and the National Energy Administration issued a notice on deepening the market-oriented reform of new energy grid electricity prices to promote high-quality development of new energy, which clearly stated that "energy storage configuration shall not be used as a prerequisite for the approval, grid connection, and grid connection of new energy projects." After the implementation of this regulation, the capacity leasing income that originally accounted for nearly 50% -60% of the total revenue of energy storage projects will gradually be cancelled.

Li Zhen said that, coupled with the limited maturity of the current electricity market construction and the low difference in charging and discharging prices of energy storage power stations, new energy storage power stations rely solely on the benefits obtained from participating in the electricity market and auxiliary service market, making it difficult to cover investment and operating costs.

At the same time as the decrease in revenue, the upstream raw material prices of energy storage power plants are continuously rising.

Starting from mid-2025, the price of lithium carbonate as a raw material for energy storage power plants will rapidly rise from less than 70000 yuan/ton to about 180000 yuan/ton, and currently remain at around 120000 yuan/ton.

Li Pan, a lithium industry analyst at Shanghai Steel Union's New Energy Division, told the Economic Observer that the rise in lithium carbonate prices is mainly due to supply disruptions combined with explosive growth in downstream demand. In terms of supply, it is mainly affected by the supply gap caused by the shutdown of the Jianxiawo mining area; On the demand side, it is the result of the dual explosion of demand from the power and energy storage ends, as well as the surge in demand caused by downstream export competition due to adjustments in export tax rebate policies. Affected by the continuous upward trend in raw material quotations, the prices of individual battery cells have also increased.

New energy storage power stations, especially large-scale energy storage power stations on the grid side, are extremely sensitive to changes in profitability. Due to the high construction cost and long investment return period of new energy storage power stations, the initial capital mainly relies on financial institutions such as banks and insurance. The investment and construction party usually bears about 20% of the capital, while the remaining 80% relies on financing.

The capacity pricing mechanism will bring a significant "salary" to the new energy storage system.

According to the "Notice on Establishing a Reliable Capacity Compensation Mechanism for Power Generation (Trial)" issued by the Development and Reform Commission of Gansu Province, the Energy Bureau of Gansu Province, and the Gansu Regulatory Office of the National Energy Administration on December 31, 2025, the compensation standard for reliable capacity in Gansu Province is tentatively set at 330 yuan per kilowatt hour per year. According to this calculation, a typical 100MW energy storage power station can generate profits of over 10 million yuan annually.

Energy storage power stations shift from heavy scale to heavy quality

A guaranteed salary does not mean that you can get it just by lying flat. You must have high-quality equipment to receive this money, "said Tian Qingjun.

Article 114 specifies that the electricity price level for independent new energy storage capacity on the grid side is based on the local coal-fired power capacity electricity price standard, and is calculated according to a certain proportion based on peak capacity (the conversion ratio is the duration of continuous discharge at full power divided by the duration of the longest net load peak throughout the year, not exceeding 1), taking into account factors such as the progress of electricity market construction and power system demand.

Taking Gansu Province as an example, the actual benefits obtained by energy storage power stations need to consider compensation standards, calculation of reliable energy storage capacity, and capacity supply and demand coefficients. In the calculation of reliable capacity, the maximum discharge power of the energy storage power station, the reliable capacity coefficient (maximum power duration/6-hour peak duration, ? 1), and the plant power consumption rate (the ratio of the amount of electricity consumed by the power plant in the production process to the total amount of electricity generated) should also be considered.

The capacity supply and demand coefficient is determined based on the overall demand for flexible resources in the local area. If too many energy storage power stations are built in a certain region, the capacity supply and demand coefficient will decrease, which will in turn affect the actual revenue of the energy storage power stations.

Li Zhen stated that for project investors, the introduction of a capacity pricing mechanism does not mean that they can "lie flat". The investment and operation party needs to assess the regional capacity supply and demand situation, eliminate blind follow the trend investment, and scientifically balance the relationship between electricity, auxiliary services, and capacity revenue. For local governments, it is necessary to base on the regional energy resource endowment and power system demand, make overall planning for various regulatory resources, carry out demand release and risk warning in advance, avoid 'rushing forward', and prevent 'dispersal', "said Li Zhen.

For energy storage power plants themselves, conversion efficiency and maximum power duration are two more important indicators. To achieve profitability, energy storage power stations need to go through two stages: charging and discharging. According to Article 114, system operating costs must be calculated when charging energy storage power stations, and transmission and distribution fees must be correspondingly reduced when discharging energy storage power stations. Therefore, higher conversion efficiency of energy storage power stations has become an inevitable requirement.

Industry insiders told reporters that since last year, the operating costs of the power grid system have been continuously increasing, and the costs related to the newly established capacity electricity pricing mechanism also need to be shared in the system operating costs. Some energy storage technologies with extensive operation and low conversion efficiency may even experience a situation of income and expenditure inversion. In the future, if energy storage manufacturers want to occupy a dominant position in the market and create value for customers, they need to develop equipment that is more suitable for the duration requirements of new net load peaks, such as long-term energy storage equipment, as well as energy storage equipment with higher conversion efficiency and stronger peak capacity, "said Tian Qingjun.

Tian Qingjun further told reporters that the recent wave of emergency filing for some energy storage power stations precisely highlights the industry's deep attention to the new regulations in Document No. 114. But the policy clearly sets a red line: only grid side independent energy storage included in the provincial compliance list is eligible for capacity electricity price compensation. Tian Qingjun said that this is not only a subsidy threshold, but also a "quality filter" - in the future, low-quality and low reliability energy storage projects will not only be unable to receive compensation, but may also be removed from the field in strict operational assessments.

Tian Qingjun said that this mechanism will fundamentally reverse the competitive logic of the industry. Drive the transformation of the entire industry chain from the extensive model of blindly "competing on scale and price" in the past to high-quality development of "competing on technology, reliability, and value". The real industry reshuffle has just begun.