Increase the proportion of capacity leasing! Ningxia issued a notice on promoting the healthy development of energy storage

On November 5, the Ningxia Autonomous Region Development and Reform Commission issued a notice on promoting the healthy development of energy storage.

The document proposes to strictly implement the priority control of power abandonment. Incremental new energy projects should complete the energy storage configuration work before the first grid connection, and the State Grid Ningxia Electric Power Company will verify the scale of energy storage configuration before connecting to the grid; new energy projects connected to the grid after January 1, 2022, if the storage lease expires and is not renewed, will be deemed to fail to meet the storage requirements and meet the grid connection conditions, and will not be called. For existing new energy projects (connected to the grid before December 31, 2021) that are not equipped with storage or the storage lease is not renewed after the expiration, when new energy consumption is difficult, power abandonment will be given priority to 10% of the installed capacity. If the grid-connected new energy project has not been equipped with storage for more than 30 days, when renewing the lease or self-building, it will be configured at a scale of twice the original storage ratio (the duration remains unchanged).

Increase the proportion of capacity leasing. Encourage energy storage companies to increase R&D investment, especially to promote new technology innovation and application in improving system efficiency and reducing costs. Support the construction of large-capacity (power × duration), safe and efficient energy storage with a duration of more than 4 hours. When new energy companies sign a leasing contract with such energy storage, the storage scale shall be converted at 1.2 times its power.

Improve the electricity market mechanism. Before the spot market operates continuously, independent energy storage participating in the medium- and long-term electricity market can simultaneously enjoy the benefits of peak-shaving auxiliary services. The medium- and long-term electricity contracts shall be implemented in accordance with the relevant provisions on electricity trading issued by the autonomous region, and the peak-shaving price shall be based on the documents issued by the Northwest Energy Regulatory Bureau and the Development and Reform Commission of the autonomous region. After the spot market operates continuously, energy storage can participate in spot electricity trading and frequency regulation auxiliary service trading, promote the establishment of an energy storage capacity compensation mechanism, and support the healthy and stable development of the energy storage industry.

The following is the original text

Notice of the Ningxia Autonomous Region Development and Reform Commission on Promoting the Healthy Development of Energy Storage

Ningfa Reform Energy (Development) [2024] No. 816

To the Development and Reform Commissions (Bureaus) of all cities, counties (districts), the Economic Development Bureau of Ningdong Management Committee, State Grid Ningxia Electric Power Co., Ltd., and all relevant enterprises:

In order to promote the construction of energy storage projects, enrich energy storage operation methods, give play to the regulatory role of energy storage, and ensure the rational and efficient use of new energy storage, in accordance with the National Development and Reform Commission and the National Energy Administration's "Notice on Establishing and Improving the Price Mechanism of the Electricity Auxiliary Service Market" (Fagai Price [2024] No. 196), the General Office of the National Development and Reform Commission and the General Office of the National Energy Administration "Notice on Further Promoting the Participation of New Energy Storage in the Electricity Market and Dispatching Operation" (Fagai Ban Yunchang [2022] No. 475), combined with the actual development of energy storage in the autonomous region, further clarify the market position of new energy storage, and guide the healthy development of the industry. The relevant matters are hereby notified as follows.

1. Optimize the layout of energy storage projects. The autonomous region's energy department will work with the State Grid Ningxia Electric Power Company to study and formulate independent energy storage power station planning and layout guidelines based on the actual situation in our region, and reasonably define recommended areas in new energy-rich areas, load center areas, and areas with good access conditions. County and district filing departments will guide and optimize the filing site selection of energy storage projects based on the energy storage project planning and layout guidelines.

2. Optimize energy storage project management. All counties and districts should promptly evaluate the construction conditions of "prepared but not built" energy storage projects. If the construction has not started for more than two years or any other procedures have not been completed, the filing documents will automatically become invalid. Projects with invalid filing documents and overdue access opinions should be cleaned up regularly to release grid access resources for incremental projects.

3. Strictly implement the priority control of power abandonment. Incremental new energy projects should complete the energy storage configuration work before the first grid connection, and the State Grid Ningxia Electric Power Company will verify the scale of energy storage configuration before connecting to the grid; new energy projects connected to the grid after January 1, 2022, if the storage lease expires and is not renewed, will be deemed to fail to meet the storage requirements and meet the grid connection conditions, and will not be called. For existing new energy projects (connected to the grid before December 31, 2021) that are not equipped with storage or the storage lease is not renewed after the expiration, when new energy consumption is difficult, power abandonment will be given priority to 10% of the installed capacity. If the grid-connected new energy project has not been equipped with storage for more than 30 days, when renewing the lease or self-building, it will be configured at a scale of twice the original storage ratio (the duration remains unchanged).

4. Increase the proportion of capacity leasing. Encourage energy storage companies to increase R&D investment, especially to promote new technology innovation and application in improving system efficiency and reducing costs. Support the construction of large-capacity (power × duration), safe and efficient energy storage with a duration of more than 4 hours. When new energy companies sign a leasing contract with such energy storage, the storage scale shall be converted at 1.2 times its power.

5. Improve the electricity market mechanism. Before the spot market operates continuously, independent energy storage participating in the medium- and long-term electricity market can simultaneously enjoy the benefits of peak-shaving auxiliary services. The medium- and long-term electricity contracts shall be implemented in accordance with the relevant provisions on electricity trading issued by the autonomous region, and the peak-shaving price shall be based on the documents issued by the Northwest Energy Regulatory Bureau and the Development and Reform Commission of the autonomous region. After the spot market operates continuously, energy storage can participate in spot electricity trading and frequency regulation auxiliary service trading, promote the establishment of an energy storage capacity compensation mechanism, and support the healthy and stable development of the energy storage industry.

6. Improve the energy storage settlement mechanism. The loss of independent energy storage shall bear the transmission and distribution price (free of basic electricity charges), system operation fees, line loss fees in the online link, government funds and surcharges, and the offline electricity corresponding to the online electricity shall not bear the above fees. The offline reactive electricity shall be subject to the power factor adjustment fee. Before participating in the medium- and long-term electricity market, the on- and off-grid electricity shall be subject to the thermal power benchmark price; after participating in the medium- and long-term or spot market, the on- and off-grid electricity shall be subject to the electricity market transaction price.

7. Implement energy storage production safety responsibilities. Relevant power companies must strictly implement the "Notice of the General Office of the National Energy Administration on Strengthening the Safety Management of Electrochemical Energy Storage Power Stations" (National Energy General Safety [2022] No. 37) and the safety work requirements of the functional departments of the counties and districts where the energy storage power stations are located, strengthen the responsible entities for the safe operation of energy storage power stations, and establish a strong sense of safety. All counties and districts must strengthen the evaluation of the implementation effect of energy storage projects.

All localities, relevant departments and units should refine the policy measures in accordance with this notice, ensure the implementation of the work, and communicate with the Development and Reform Commission of the autonomous region in a timely manner when encountering specific situations during implementation, so as to ensure the healthy and orderly development of the autonomous region's energy storage industry and provide strong support for the construction of new power systems.

This notice shall come into force on the date of publication. During the implementation period, if the state has new regulations, they shall prevail.

Ningxia Hui Autonomous Region Development and Reform Commission
November 4, 2024