Economic Observer reporter Wang Yajie

Since October, the project schedule on Li Zhenhua's desk has changed. The energy storage that used to follow wind and photovoltaic projects is now being separately declared.

Li Zhenhua is the development manager of an energy storage project in Northwest China. He told a reporter from the Economic Observer that in the first three quarters of this year, nearly 60% of the newly registered projects in his hands were independent energy storage projects. Some energy storage solutions that were originally bound to wind and solar projects are being re evaluated, with some being converted into independent energy storage applications for filing.

This change has already been foreshadowed. The Notice on Deepening the Marketization Reform of New Energy Grid Prices and Promoting High Quality Development of New Energy (hereinafter referred to as "Document No. 136") issued by the National Development and Reform Commission and the National Energy Administration on January 27, 2025, and announced on February 9, 2025, stipulates that the allocation of energy storage shall not be used as a prerequisite for the approval, grid connection, and grid connection of new energy projects. After the policy is implemented, energy storage no longer needs to be registered together with wind and photovoltaic projects, but can be listed as an independent entity.

In late June 2026, Shaanxi announced the first batch of construction lists for independent energy storage projects on the grid side. The nationwide transmission is mainly reflected in the operational data of the first three quarters of this year.

The monthly statistics released by CNESA (China Energy Storage Alliance, Zhongguancun Energy Storage Industry Technology Alliance) on October 14th show that according to incomplete statistics, 35.30 gigawatts (GW)/10.231GWh of new energy storage were newly put into operation in China in the first three quarters of this year, and independent energy storage on the grid side accounted for 85.3% of the newly added power in September.

An independent energy storage platform investment manager within an energy state-owned enterprise system told Economic Observer reporters that the proportion of independent energy storage in the platform's newly added project reserves this year has risen to over 70%.

Zhou Shengmin, a practitioner in the energy storage industry in the northwest region, told Economic Observer reporters that some independent energy storage projects in Shaanxi are still in the application stage for the official settlement and admission list of capacity electricity prices, and some projects are still advancing the approval of transmission lines, waiting for the implementation of grid access capacity indicators.

A provincial-level dispatch center official from Southern Power Grid stated that some grid connected projects in the local area have experienced a discount on the settlement amount of capacity electricity prices due to the failure to meet the assessment standards for call rates.

The first step for energy storage to emerge from wind and solar projects is not to immediately make money, but to enter a new process. Whether it can be filed, connected, listed, and settled smoothly is determining the speed of the actual implementation of this round of independent energy storage projects.

Release the reins of the project

A person from the New Energy Department of the Development and Reform Commission of a certain province in Northwest China told the Economic Observer that after the publication of Document No. 136, policies have gradually been implemented in the industry. For example, the number of independent energy storage projects registered within the province has gradually increased. In the past, energy storage was mostly registered together with new energy projects. Nowadays, more and more projects are directly declared as independent energy storage entities, no longer bound to specific wind and solar power stations.

The person said that in the first three quarters, the newly added grid connected independent energy storage in the local area showed a "low before high" trend. Part of the projects will have their plans revised after policy adjustments, shifting from wind and solar energy storage to independent energy storage. The plan changes and integration reviews will take time. There are also some projects that are stuck in equipment supply, land procedures, and delivery project construction progress in the first half of the year. In the third quarter, the early reserve projects were concentrated to catch up with the grid connection window. Most of the projects put into operation in the third quarter are stock projects that have already completed major preliminary work in the previous year. Many of the newly registered independent energy storage projects this year are still in the stage of design and construction drawings and civil engineering, and the actual grid connection will not be completed until the fourth quarter or even next year.

The local authorities are also cleaning up the "queue numbers" in the project database. The person said that after the energy storage project registration increased, the province noticed the phenomenon of "occupying the pit". After obtaining registration, some enterprises have been slow to implement their capital and access conditions. The local government is improving the dynamic management of the project library and implementing rolling clearance for long-term inactive projects. The filing numbers look good, but filing does not mean starting construction, and starting construction does not mean connecting to the grid, "the person said.

The list of Shaanxi has already taken the lead.

Zhou Shengmin told Economic Observer reporters that the first batch of independent energy storage projects on the grid side in Shaanxi Province was announced in late June, with a total of 15 projects and a total scale of 2.02 million kilowatts and 6.08 million kilowatt hours. He reminded that the construction list is not yet the final settlement admission list. A large number of reserve projects that are not on the first batch list can only wait for the next selection. What investors are most concerned about is when the second and third batch lists will be lifted, whether the quotas will be tightened, and whether policies can remain stable.

The power grid side is also changing the process.

Qiao Yong, a staff member of the Northwest Second level Power Company of a state-owned enterprise, told the Economic Observer that the settlement rules of "charging single system, discharging refund and reduction of transmission and distribution fees" for independent energy storage have been in operation locally for less than half a year. The compliance items on the list can generally be settled on a monthly rolling basis, but it is not yet fully automated. The electricity trading and billing systems still require manual review.

The same energy storage power station may be charged and discharged multiple times in a day, and the system needs to distinguish the amount of electricity charged and discharged off the grid and on the grid at different times. When reducing transmission and distribution electricity fees, it is also necessary to accurately match the corresponding discharge power. Qiao Yong said that in the early months, there were mismatches in the matching of refunds and reductions, which required repeated verification by enterprises, trading, and electricity pricing departments. In the scenario of cross regional power transmission, there is still a lack of more detailed operational guidelines for the reduction boundary of transmission and distribution electricity fees.

Grab A Seat

After the policy opened up channels, the response of the enterprise side also began to emerge. Investment platforms rushed to switch new projects to independent energy storage paths, while the manufacturing side adjusted supply along the long-term trend.

The investment manager of the independent energy storage platform mentioned above told the Economic Observer reporter that the proportion of independent energy storage in the platform's newly added project reserves this year has risen to over 70%. As long as local policies and access conditions permit, new projects will be prioritized for independent energy storage pathways.

The platform he is on is still reviewing old projects. Some of the supporting energy storage systems that were already approved and linked to wind and solar power last year have been re evaluated this year. Whether it is possible to change the filing entity, whether it can be separately connected to the power grid, and whether it can be included in the capacity electricity price list have become issues repeatedly confirmed by all parties at the project meeting.

But this step is not easy. The above-mentioned person in charge said that for some national large-scale base projects, the original approval documents still require supporting energy storage of a certain scale and cannot be arbitrarily stripped away. Some projects are also applying for local grid access planning. Wind and solar energy storage will still be retained, but for new projects with clearer commercial development and market-oriented benefits, independent energy storage identity is being prioritized.

The above-mentioned person in charge stated that there is a profit threshold for new projects within the platform, and the bottom line of the internal rate of return for capital is roughly 6.5%. The pre tax IRR (internal rate of return) for all investments is not less than 6%. Whether the project can enter the provincial capacity electricity price list, whether there will be penalties for call rate assessment, and whether the spot price difference will be narrowed, all need to be put into stress testing.

The manufacturing side is also adjusting accordingly.

Zhao Ruiwu, the production director of an energy storage enterprise under a central state-owned enterprise, told Economic Observer reporters that after the evolution of independent energy storage towards long-term direction, the product route of battery cells is also changing. In the past, projects focused more on unit power cost, but now owners are asking about long cycle, continuous discharge capacity, and overall station safety. Large capacity battery cells and long-term system solutions are becoming high-frequency terms in new project communication.

Longevity has not only rewritten the choices of lithium battery routes, but also pushed non lithium long-term technologies into the investment list, and non lithium routes have received more inquiries.

The business leader of an energy storage company specializing in sodium based long-term energy storage routes told Economic Observer reporters that after setting up a time ladder for capacity electricity prices in various regions, projects that are 4 hours or more are more likely to receive full compensation. Investors have started to include sodium electricity as an option when comparing options. In the past few months, there has been a significant increase in technical exchanges and feasibility studies related to non lithium long-term route business. However, many homeowners are still looking at the maturity of the industry chain and actual power plant operation data.

New Threshold

After energy storage is introduced separately, the first threshold is the list. Entering the list only qualifies for capacity compensation. What really hangs over our heads every day is the call rate assessment, which directly determines whether the compensation can be fully compensated or discounted.

Although private projects have been included in the construction list, investors are still observing and slowing down their pace, worrying about whether the subsequent call rate assessment will be discounted and whether the profit model will be rewritten.

The call rate has changed from a requirement on the file to a daily assessment that the power station has to face.

The above-mentioned person from the provincial dispatch center of Southern Power Grid told the Economic Observer that the independent energy storage that has completed the dispatch agreement and automated joint debugging will be connected to the 96 point time-sharing planning system (dividing the 24-hour day into 96 dispatch points every 15 minutes). A basic charging and discharging plan was formed recently, and scheduling instructions were issued on a rolling basis within the day. The automation system collected actual output data every 5 minutes and compared it with the scheduling plan curve.

The above-mentioned dispatchers said that the core of the assessment is whether the declared available capacity of the energy storage project can be fulfilled, whether the power station can reach the declared power after the full power discharge instruction is issued, and how much deviation there is in the execution of electricity during the planned period.

The dispatcher stated that there have been instances where the call rate did not meet the standard, resulting in a discount on capacity electricity prices, and currently the proportion of projects involved is not high. There are two common reasons. One is the equipment failure of the power station itself, and the BMS (battery management system) defect, which leads to the inability to output at full power according to instructions; Another type is that the operational strategy is too conservative, unwilling to follow the schedule for deep full discharge in order to protect battery life.

The power grid also retains exemption criteria. If the deviation comes from non power station reasons such as limited power grid section or temporary adjustment of system operation, the dispatch side will make a determination and not include it in the assessment. But the person reminded that exemption is not an unconditional guarantee. If hardware and operations cannot keep up, a proportional discount on capacity and electricity bills will become a real loss.

Long term transformation brings another threshold.

Zhou Shengmin said that after using 6 hours as the benchmark duration, energy storage projects with a configuration duration lower than 6 hours (such as 2-hour and 4-hour configuration projects) in Shaanxi will be converted into capacity electricity prices based on the proportion of the duration. Last year, many energy storage projects were still equipped with 2-hour and 4-hour configurations. This year, few newly registered projects have produced 2-hour versions. The first batch of lists still includes some projects that were approved last year and used 2-hour configurations, but the newly registered projects have clearly moved towards 4-hour and 6-hour configurations. Many developers have raised their plans to start within 4 hours, and if conditions permit, they can directly achieve 6 hours.

The longer the duration, the higher the cost. The person in charge of the energy storage enterprise mentioned above stated that compressed air is constrained by geological resources, and the initial investment for vanadium liquid flow is high. Sodium electricity still requires more operational data. More importantly, many of the existing capacity pricing, spot pricing, and ancillary service rules still account for revenue based on short-term energy storage. The cross day peak shaving and sustained peak shaving capabilities provided by long-term energy storage have not been fully priced yet.

Overseas markets are also raising their barriers to entry.

Li Zhenhua told Economic Observer reporters that compliance requirements such as European carbon footprint and battery passports have led to cost increases, which are squeezing the profits of small and medium-sized integrators. Carbon footprint accounting, raw material traceability, and third-party certification all require investment. If the upstream material data is out of file,

Goods such as energy storage batteries and raw materials may face demurrage, re inspection, or even return upon arrival at the port.

Independent energy storage has shed its "supporting" identity and also lost the protective layer that it used to follow along with wind and solar projects. The list, access, call rate, long-term technology, and overseas compliance are being screened for projects and enterprises that can truly stay.

(Author Wang Yajie)