The establishment of the independent status of new energy storage is a timely policy to improve the market mechanism. The "Notice on Further Promoting the Participation of New Energy Storage in the Electricity Market and Dispatching and Utilization" was issued

Recently, the General Office of the National Development and Reform Commission and the General Office of the National Energy Administration issued the "Notice on Further Promoting the Participation of New Energy Storage in the Electricity Market and Dispatching and Use", which clearly stated that it is necessary to establish and improve a market mechanism that adapts to the participation of energy storage, encourage new energy storage to independently choose to participate in the electricity market, adhere to market-oriented pricing, continuously improve the dispatching and operation mechanism, give play to the advantages of energy storage technology, improve the overall utilization level of energy storage, ensure reasonable returns on energy storage, and promote the healthy development of the industry.

The following is the original text

Notice of the General Office of the National Development and Reform Commission and the General Office of the National Energy Administration on further promoting the participation of new energy storage in the power market and dispatching and utilization

Development and Reform Commission Operation [2022] No. 475

To the Development and Reform Commission, Economic and Information Technology Commission (Commission of Industry and Information Technology, Department of Industry and Information Technology, Bureau of Industry and Information Technology, Department of Economic and Information Technology), Energy Bureau of each province, autonomous region, municipality directly under the Central Government, Xinjiang Production and Construction Corps, Beijing Municipal Urban Management Committee, various dispatched agencies of the National Energy Administration, State Grid Corporation of China, China Southern Power Grid Co., Ltd., China Huaneng Group Co., Ltd., China Datang Group Co., Ltd., China Huadian Group Co., Ltd., State Power Investment Corporation, China Three Gorges Corporation, State Energy Investment Group Co., Ltd., China Development Bank Corporation, and China Resources (Group) Co., Ltd.:

In order to implement the "Opinions of the Central Committee of the Communist Party of China and the State Council on Fully, Accurately and Comprehensively Implementing the New Development Concept and Doing a Good Job in Carbon Peaking and Carbon Neutrality", in accordance with the relevant requirements of the "Guiding Opinions of the National Development and Reform Commission and the National Energy Administration on Accelerating the Development of New Energy Storage" (Development and Reform Energy Regulation [2021] No. 1051), further clarify the positioning of the new energy storage market, establish and improve relevant market mechanisms, price mechanisms and operating mechanisms, improve the utilization level of new energy storage, and guide the healthy development of the industry. The following notice is hereby issued on relevant matters.

1. General requirements. New energy storage has the advantages of fast response, flexible configuration, and short construction period. It can play a variety of roles in power operation, such as peak load, peak load regulation, frequency regulation, ramping, and black start. It is an important part of building a new power system. It is necessary to establish and improve a market mechanism that adapts to the participation of energy storage, encourage new energy storage to independently choose to participate in the power market, adhere to the formation of prices in a market-oriented manner, continuously improve the dispatching and operation mechanism, give play to the advantages of energy storage technology, improve the overall utilization level of energy storage, ensure reasonable returns on energy storage, and promote the healthy development of the industry.

2. New energy storage can participate in the electricity market as independent energy storage. New energy storage projects that have independent metering, control and other technical conditions, are connected to the dispatching automation system and can be monitored and dispatched by the power grid, comply with relevant standards and specifications and the requirements of power market operators and other relevant parties, and have legal person status can be converted into independent energy storage and participate in the electricity market as an independent entity. New energy storage projects that exist in the form of supporting construction are encouraged to choose to be converted into independent energy storage projects when they meet the same technical conditions and safety standards through technical transformation. In accordance with the relevant requirements of the "Guiding Opinions of the National Development and Reform Commission and the National Energy Administration on Promoting the Integration of Power Sources, Grids, Loads and Storage and the Development of Multi-energy Complementarity" (Development and Reform Energy Regulation [2021] No. 280), energy storage involving wind, solar, water, fire and storage multi-energy complementary integrated projects will not, in principle, be converted into independent energy storage for the time being.

3. Encourage the construction of new energy storage and its affiliated power sources to participate in the electricity market. New energy storage projects that exist in the form of supporting construction are encouraged to be combined with other types of supporting power sources and regarded as a whole, and participate in the electricity market in accordance with existing relevant rules, provided that the transformation of relevant systems such as metering and control in the station is completed and meets relevant technical requirements. Local governments should encourage new energy sites and supporting energy storage to jointly participate in the market according to the actual situation of market liberalization of power sources, use energy storage to improve the grid-related performance of new energy, and ensure the efficient absorption and utilization of new energy. As market construction gradually matures, it is encouraged to explore market models in which the same energy storage entity can participate in both partial capacity independence and partial capacity joint participation.

Fourth, accelerate the promotion of independent energy storage to participate in the electricity market to cooperate with the peak load regulation of the power grid. Accelerate the promotion of independent energy storage to participate in the medium- and long-term market and the spot market. In view of the relatively small energy storage capacity at this stage, independent energy storage is encouraged to sign market contracts during peak hours and valley hours to play the role of shifting peaks and filling valleys and peak power generation. If independent energy storage power stations supply electricity to the power grid, their corresponding charging electricity will not bear the transmission and distribution price, government funds and surcharges.

5. Give full play to the advantages of independent energy storage technology to provide auxiliary services. Independent energy storage is encouraged to provide auxiliary services such as active power balance services, reactive power balance services, accident emergency and recovery services, and rapid active power response services in the event of power grid accidents in accordance with the market rules or management rules of auxiliary services, as well as to provide rapid active power response services in the event of power grid accidents. The cost of auxiliary services should be reasonably shared by the relevant power generation side grid-connected entities and power users in accordance with the relevant provisions of the "Electricity Auxiliary Service Management Measures" and the principle of "who provides, who profits, who benefits, who bears".

6. Optimize the energy storage dispatching and operation mechanism. Adhere to the market-oriented approach to optimize the energy storage dispatching and operation. For energy storage that has not yet participated in the market, especially energy storage with new energy, the power dispatching agency should establish a scientific dispatching mechanism, and the project owner should strengthen the operation and maintenance of the energy storage facility system to ensure the safe and stable operation of the energy storage system. The energy storage with other types of power sources such as coal-fired power generation shall refer to the above requirements to further improve the level of energy storage utilization.

7. Further support the development of user-side energy storage. Local governments should appropriately widen the peak-valley price difference based on the actual situation of power supply and demand to create space for the development of user-side energy storage. According to the actual situation of various regions, we encourage further widening of the upper and lower limits of the power market and the spot market, guide users to actively configure new energy storage, and increase the channels for user-side energy storage to obtain revenue. Encourage users to adopt energy storage technology to reduce their own peak power demand and reduce the investment in capacity expansion connected to the power system.

8. Establish a grid-side energy storage pricing mechanism. All regions should strengthen the scientific planning and effective supervision of grid-side energy storage, and encourage the grid to build energy storage facilities at key nodes according to the needs of power system operation. Research on establishing a capacity electricity price mechanism for independent energy storage power stations on the grid side, and gradually promote power stations to participate in the electricity market; explore incorporating the cost and benefits of grid-alternative energy storage facilities into the recovery of transmission and distribution prices.