Reform direction of central enterprises in power storage
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6 FAQs about [Reform direction of central enterprises in power storage]
Will this notice impact energy storage demand in the short term?
This Notice may impact energy storage demand in the short term. Up until 2024, mandatory storage allocation policies were always the primary driver of China’s energy storage market. In 2024, for instance, energy storage installations tied to new energy projects accounted for nearly 40% of total capacity.
Will China's new energy storage installations reach 112 Gwh in 2025?
Based on current energy storage market and the Notice, InfoLink expects China’s new energy storage installations to reach 112 GWh in 2025, up 9% YoY. But if local policies or incentives (e.g., capacity pricing or compensation for grid services) fall short, the industry may face some challenges in 2026–2027.
Are standalone energy storage projects economically viable?
With the cancellation of mandatory storage allocation, market attention has shifted to standalone energy storage. However, the economic viability of standalone projects remains under pressure. Historically, a major revenue source for standalone energy storage plants has been capacity leasing fees paid by projects coupled with new energy.
How will China's energy storage policy change in 2025?
The current Notice sets the framework for energy storage policy, while detailed rules will be made by each Chinese province based on local conditions by the end of 2025. This transition period may cause short-term market fluctuations, so industry players should stay flexible and prepared.
Does the power sector reform improve the efficiency of power generation?
We find that the power sector reform since 2015 has improved the overall efficiency of power generation by increasing the operating hours of high-efficiency generators. However, small inefficient coal-fired generators and gas-fired generators owned by local SOEs are still under the shelter of local governments through an allocated generation quota.
What is the compensation standard for new-type energy storage in 2025?
For 2025, the compensation standard for standalone new-type energy storage is set at RMB 0.35/kWh. Projects that fail to begin construction by June 30, 2025, will not be eligible for the 2025 compensation.
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