Recently, more than ten energy storage plant owners and financial institutions have contacted us, hoping to cooperate in applying for inter institutional REITs for energy storage plant assets. This year, we will also apply for four self owned projects. I believe that 2026 is the first year for the capitalization of energy storage assets. ?Zhang Shu, General Manager of Huanghe Industrial Strategic Investment Department and Partner of Huanghe Capital, told Economic Observer.

Huanghe Industry is an investment platform primarily focused on the new energy industry, established by a leading private enterprise in Shanxi Province. Yellow River Capital has participated in investing in energy companies such as Qidian Energy, Xidi Intelligent Driving, and Boreton. Currently, it is mainly responsible for asset investment, financing, and capitalization of independent energy storage power stations, with a cumulative energy storage investment and development scale of over 13GWh (gigawatt hours).

After the National Development and Reform Commission and the National Energy Administration issued the "Notice on Deepening the Marketization Reform of New Energy Grid Electricity and Promoting the High quality Development of New Energy" (hereinafter referred to as "Document No. 136") at the beginning of last year, the revenue models of photovoltaic and wind power were challenged. With the construction of capacity pricing mechanism and electricity spot market, the revenue of energy storage, especially large-scale energy storage, has begun to receive attention.

On April 28th of this year, the "Caitong Asset Management - Atres Holding Real Estate Asset Support Special Plan (Carbon Neutrality)" was successfully established, becoming the first inter institutional REITs product in China to use energy storage power stations as the underlying asset.

Zhang Shu said, "Many financial institutions I know are consulting or hoping to replicate this project, mainly because they are interested in the value of energy storage assets

Since the beginning of this year, Zhang Shu and his team have conducted multiple training sessions on energy storage investment and financing for financing leasing institutions, banks, insurance funds, urban investment, energy industry capital, as well as local state-owned enterprises seeking business transformation. He clearly felt that the enthusiasm of various capital for energy storage power plants continued to rise.

Energy storage power stations, especially large ones, are forming a type of 'fixed income+' asset return model, which meets the current market demand for fund allocation. Inter institutional REITs have been officially approved, making the returns of energy storage power stations more standardized and expected to attract more capital inflows. ?Zhang Shu stated.

Capacity pricing+electricity market revenue="fixed income+"

Previously, wind power and photovoltaics (especially distributed photovoltaics) had strong fixed income attributes. Under a fixed grid electricity price, projects can "make a profit", and a large number of photovoltaic developers can apply for financing from banks based solely on future income calculations. After the release of Document No. 136, although the mechanism based electricity pricing system provided a certain guarantee of revenue, the overall revenue of wind and solar projects has significantly declined.

In this context, the stable returns of energy storage power plants have begun to attract investors' attention. The Economic Observer learned that since the beginning of this year, including Yuexiu Leasing, financing leasing institutions that had previously invested heavily in distributed photovoltaics have begun to invest in large-scale independent energy storage power stations.

Zhang Shu stated that the scale of industrial and commercial energy storage is relatively small, and in recent years, various provinces have gradually abolished administrative time of use electricity prices, which poses a high risk. Large energy storage power stations have obvious "fixed income+" characteristics, and require a large amount of funds. A project construction scale can exceed one billion yuan, which can meet the allocation needs of a large amount of funds.

Document No. 136 explicitly states that energy storage configuration shall not be used as a prerequisite for the approval, grid connection, or integration of new energy projects.

During the previous period of mandatory energy storage allocation, due to the demand for investing in and constructing energy storage stations in wind and photovoltaic projects, the "capacity leasing" model gradually emerged in the market, which means leasing large energy storage stations from wind and photovoltaic projects to meet grid connection requirements.

After the release of Document No. 136, the phenomenon of "shortage of buyers" in large energy storage power stations became prominent. At the beginning of this year, the National Development and Reform Commission and the National Energy Administration issued a notice on improving the capacity pricing mechanism on the power generation side, which stipulated that a capacity pricing system for energy storage power stations would be gradually established in the future to ensure that large-scale energy storage power stations that meet the requirements have certain profits.

Nowadays, more than 10 provinces have introduced energy storage capacity pricing policies in various regions, and large-scale energy storage power stations that meet the conditions can receive fixed income based on their installed capacity. Taking Ningxia as an example, on September 12, 2025, the Ningxia Development and Reform Commission issued the "Notice on Establishing a Capacity Electricity Pricing Mechanism on the Power Generation Side (Draft for Comments)", which clarifies that the electricity pricing standards for coal-fired power units and new energy storage capacity on the grid side will be implemented at 100 yuan/kilowatt per year from October to December 2025, and at 165 yuan/kilowatt per year from January 2026 onwards. According to our calculations, capacity pricing can increase the internal rate of return (IRR) of large-scale energy storage by 1 to 2 percentage points, and currently many institutions have financing costs below 3%. ?Zhang Shu said.

Since last year, various regions across the country have successively promoted the construction of electricity spot markets, and the auxiliary service market and electricity trading market have gradually improved. Energy storage power stations can achieve operational income through spot trading, participation in auxiliary service markets, and other means.

According to Zhang Shu, in the electricity spot market, the active management space of energy storage power stations has increased, and the spot revenue of well operated power stations and poorly operated power stations can differ by more than four times.

He cited electricity trading as an example, stating that traders in large energy storage power plants need to understand the medium and long-term markets, spot markets, ancillary service markets, and capacity markets simultaneously, and also need to couple their strategies in different markets.In addition, it is necessary to closely integrate AI (artificial intelligence) algorithms with automated trading (requiring regional market meteorological data, energy structure details, and electricity trading data, and continuously adjust algorithms based on a full understanding of provincial rules and power station performance parameters). At the same time, it is also necessary to understand the local power ecology and have good connections with the power grid, trading centers, and other market entities such as wind and solar storage power stations in order to ultimately achieve trading performance.

Zhang Shu said that overall, large-scale energy storage power plants can have an investment return rate of over 10%, and can also achieve excess returns through equipment, operation, and maintenance, which is in line with the characteristics of "fixed income+" assets. They are settled by provincial power trading centers, with almost no payment terms and good cash flow conditions.

In addition, the electricity market, auxiliary service market, and capacity market of large-scale energy storage power stations can be matched with the long-term support of cash flow, increased revenue, and stable foundation requirements.

Zhang Shu emphasized that although corresponding policy documents have been issued at the national level to basically establish a unified national electricity market by 2030, the progress of policy implementation varies among provinces, and the benefits of investing in and building large-scale energy storage power stations in different provinces may differ significantly. For example, the rules of Shanxi's electricity market have been iterated to version 16, the electricity market and auxiliary service market have been opened up, and the capacity market will be opened up in the future. But there are still some regions that have only iterated versions 1 and 2, and many rules need to be improved.

Zhang Shu believes that in order for large-scale energy storage power plants to have the feasibility of asset securitization and achieve good "fixed income+" returns, they need to meet multiple policy and operational conditions: stable electricity policies in the province where the project is located, and settlement can be normalized after multiple rounds of verification; The electricity market and ancillary services market have sufficient historical operational data; The balanced and sustainable income structure avoids excessive reliance on a single source, thereby reducing the impact of future policy changes on investors.

Self holding or securitization?

According to Zhang Shu, wind power and photovoltaic power plants are mainly invested and built by central state-owned enterprises. In order to rapidly expand their scale, central state-owned enterprises will acquire wind power and photovoltaic power plants after their development is completed. Developers have "confirmed" buyers, but energy storage power plants have been market-oriented from the beginning.

During the development stages including project application and construction, equipment manufacturers, construction parties, and social capital participate in capital investment and will match bank loans or loans provided by leasing institutions to complete the preliminary development and construction of the project, which carries relatively high risks.

After the completion of the project construction, industrial capital, financial institutions, and state-owned energy enterprises begin to enter. At this stage, the energy storage power station is still a non-standard product, but the risk is relatively low.

Finally, after six months to a year of complete operation of the energy storage power station, there is already income data available, which can further attract new investors, mainly institutional investors, through selling or issuing inter institutional REITs, including insurance funds, bank wealth management subsidiaries, securities firms, trusts, asset management, etc., with relatively minimal risk.

Zhang Shu said that the lower the cost of capital, the more suitable it is for long-term holding. After becoming standardized securitized assets, institutions with low capital costs such as insurance funds and bank wealth management funds began to intervene on a large scale.

Taking Huanghe Capital, where Zhang Shu is located, as an example, the company has focused on the new energy equity investment track since its establishment and has clear asset allocation needs. Initially, Yellow River Capital focused on technology route venture capital, focusing on technology directions such as lithium batteries and sodium batteries; Subsequently, it was determined that the technological path of downstream energy storage power stations had rapidly converged, coupled with the continuous decline in costs and the prominent commercial economy, so the focus shifted to the field of energy storage power stations.

Zhang Shu's team plans to securitize some high-quality power plant assets this year. At present, Huanghe Industrial has invested in the development of a large-scale energy storage power station with a capacity of approximately 13GWh, and has managed over 8GWh through outsourcing operations.

Zhang Shu told the Economic Observer that many companies do hold energy storage assets and have achieved good returns, but the choice to self hold or securitize is strongly related to the investment preferences of different investors.

He said that energy storage assets have typical characteristics of heavy assets and long cycles. In the long run, the core logic of self holding is to "lock in high-quality scarce resources with funds, digest risks with time, and earn stable cash flow and asset appreciation returns"; And securitization on the balance sheet is about "quickly recovering principal, activating existing assets, and earning scale and turnover returns". Therefore, the lower the cost of capital, the more suitable it is for long-term holding; The higher the cost of capital, the more suitable it is for early intervention and later realization through asset securitization exit.

Zhang Shu stated that different markets have different requirements for the characteristics of underlying assets, and holders of energy storage power stations also need to choose a reasonable securitization path based on the characteristics of energy storage assets themselves.

He gave an example that for inter institutional REITs and public REITs, the scale of energy storage power plants should not be too small. This is because large-scale assets are more conducive to carrying out full process work such as due diligence, valuation, review, and continuous supervision, which can effectively control the risk of a single asset and better match the allocation needs of domestic long-term large funds.

At the end of last year, the National Development and Reform Commission released the "List of Industry Scope for Real Estate Investment Trusts (REITs) Projects in the Infrastructure Sector (2025 Edition)", which for the first time included energy storage facility projects in the scope of infrastructure public REITs industry. However, public REITs have clear requirements for underlying assets, requiring that the operating net cash flow of underlying real estate projects be positive in the past three years. Currently, most energy storage projects have not accumulated sufficient operating data (less than three years), so only some high-quality energy storage power stations that were invested and built in the early stage have the conditions to issue public REITs.

Zhang Shu said that in large-scale energy storage power stations, off balance sheet large storage (grid side independent energy storage) is more suitable for asset securitization. Compared to large-scale energy storage projects (including new energy distribution and storage, green power direct supply, zero carbon parks, etc.), the latter is mainly used for internal self balancing, reducing transmission and distribution costs, closely related to power loads, and involves multiple entities. There are many problems in terms of ownership confirmation and compliance. Only by transforming it into an independent energy storage project with independent legal status, independent accounting, self financing, and the ability to directly sign grid connection dispatch agreements with power dispatch agencies, can it be feasible to issue REITs.