New Policies for Transport and Energy Integration: Insights on Driving Development in China’s Energy Storage Sector

In-depth Analysis: New Policies for the Integration of Transportation and Energy by Ten Departments: Guidance on Promoting the Integrated Development of Transportation and Energy

Policy Background: Energy Storage as a Core Hub for Transportation and Energy Integration

The Guidance document positions energy storage as a “key support for the new power system.” It outlines a goal to enhance the “comprehensive carrying capacity of the distribution network along transportation infrastructure” by 2027. This signifies a shift in the role of energy storage technology from a supportive function to becoming a core component of the transportation-energy integration system. Notably, the document emphasizes the “optimized configuration of new energy storage and flexible hydrogen production resources,” aligning with the 2024 action plan from eight ministries focused on the high-quality development of the new energy storage manufacturing industry, thereby creating a complete policy loop for energy storage industry development.

From a data perspective, the document sets a target of 5 million kilowatts of non-fossil energy installed capacity by 2027. Based on a conventional energy storage ratio of 15%-20%, this will directly generate a demand for 750,000 to 1 million kilowatts of energy storage capacity. Considering the unique characteristics of transportation scenarios, the actual ratio may exceed 25%, indicating that the transportation sector alone could add 1.25 million kilowatts of new energy storage capacity, which is equivalent to 1.5 times the new installations expected for 2024.

Scene Revolution: In-depth Analysis of Four Major Energy Storage Application Frontiers

1. Road Area Energy Storage Systems (Highway Scenario)

The document calls for the planning and construction of integrated source-grid-load-storage-charging projects along highways, essentially creating a composite energy system of “photovoltaics + energy storage + charging.” For instance, the “photovoltaic-storage-supercharging” system at the Zhuozi Mountain Service Area on the Beijing-Tibet Expressway generates 804,300 kilowatt-hours annually. By integrating a 2MWh energy storage system, it achieves peak-valley arbitrage, raising the gross profit margin for charging services to an impressive 38%. Additionally, the policy introduces support for the “application of new technologies in flexible transmission and distribution networks,” which will facilitate the large-scale implementation of grid-forming energy storage systems in highway scenarios.

2. Shore Power Energy Storage (Shipping Scenario)

For port scenarios, the document specifies the need to “explore the sharing of standardized fuel tanks and box-type power sources,” immensely expanding the market for containerized energy storage. An example is the 20MW/40MWh energy storage station at the Yangshan Port Phase IV project, which reduces carbon emissions by 92% during vessel docking and shortens the investment payback period to 6.8 years. The policy particularly emphasizes “promoting the renewal of new energy port trucks,” which is expected to trigger a surge in demand for dedicated energy storage systems for Automated Guided Vehicles (AGVs) at ports.

3. Frequency Regulation Energy Storage for Rail Transit (Railway Scenario)

The document proposes “advancing the application of long-endurance energy storage locomotives in areas with weak power grids,” directly addressing frequency regulation challenges for electrified railways. For example, a 10MW flywheel energy storage frequency regulation project on the Zhengzhou-Chongqing High-speed Railway improved the power grid frequency compliance rate from 99.2% to 99.97%, highlighting the unique value of energy storage in the rail transit sector. Notably, the policy includes the introduction of a “carbon credit system for railway equipment,” which could create a new avenue for realizing the value of energy storage systems.

4. Emergency Energy Storage in Aviation (Civil Aviation Scenario)

In the aviation sector, the document mandates the “construction of dual-use energy service facilities,” opening a new avenue for mobile energy storage devices. Guangzhou Baiyun Airport’s deployment of 50 mobile energy storage charging vehicles managed to handle 83% of emergency power supply needs for delayed flights during the Spring Festival in 2024. This underscores the essential nature of energy storage in aviation scenarios. The policy specifically calls for “promoting emergency mobile energy storage facilities,” which is expected to lead to the emergence of a specialized market for high-rate energy storage batteries in aviation.

Technological Iteration: Three Major Directions for Energy Storage Innovations Driven by Transportation and Energy Integration

1. Grid-forming Energy Storage Technology

The document repeatedly emphasizes the need to “enhance the resilience of the energy system,” requiring energy storage systems to possess active grid-forming capabilities. CATL’s latest 5MWh grid-forming energy storage system can operate entirely on renewable energy in island mode, perfectly aligning with the off-grid needs of highway scenarios. The proposed “virtual power plant technology demonstration” creates a new operational model for aggregating road area energy storage.

2. Multi-energy Storage Systems

In response to the requirements for “vehicle-grid interaction technology,” BYD has developed a Vehicle-to-Grid (V2G) energy storage system that has achieved a breakthrough of 300 kWh of reverse power supply per day from a single electric heavy-duty truck. This aligns with the document’s advocacy for “green electricity direct charging for new energy vehicles,” establishing a technological closed loop and pioneering a new paradigm for mobile energy storage.

3. Safety Warning Systems

The policy underscores the need to “strengthen fault detection and warning capabilities,” promoting advancements in energy storage safety technology. Huawei Digital Energy’s AI warning system has improved the fault prediction accuracy of energy storage stations to 99.5%, removing safety barriers for large-scale applications of energy storage in transportation scenarios.

Business Reconstruction: Three Breakthrough Paths for Energy Storage Profit Models

1. Capacity Leasing Model

The document encourages “the development of energy storage capacity leasing,” linking it to local policies. Shandong has introduced a leasing guideline price of 0.2 yuan/Wh per year, meaning a 50MW/100MWh energy storage station could yield annual revenues of 20 million yuan, with an internal rate of return (IRR) increased to 8.7%.

2. Electricity Spot Trading

The policy promotes “energy storage participation in electricity market regulation.” Data from the Guangdong Power Trading Center indicates that energy storage spot arbitrage profits increased by 217% in Q1 2024, validating the effectiveness of market mechanisms.

3. Carbon Asset Development

The proposed “railway carbon credit system” provides direction for developing energy storage carbon assets. Based on the EU’s CBAM mechanism, every MWh of energy storage consuming green electricity can generate carbon credits valued at 0.8 to 1.2 euros, potentially becoming a new revenue growth point for energy storage projects.

Challenge Response: Three Key Bottlenecks in Industry Development

1. Lack of Standardized Systems

Although the document suggests “strengthening the support of standard specifications,” the unique requirements for energy storage in transportation scenarios (such as vibration protection and wide temperature range operation) have yet to establish a unified standard, leading to a 15%-20% increase in product adaptation costs.

2. Electricity Pricing Mechanism Barriers

While the policy specifies “exemption from demand charges,” the current peak-valley price difference is still insufficient to support the economic viability of energy storage. Calculations indicate that the price difference must exceed 0.7 yuan/kWh for energy storage projects to hold investment value, while most provinces currently have price differences in the range of 0.5 to 0.6 yuan.

3. Insufficient Technical Validation

The transportation sector demands energy storage with a cycle life of up to 12,000 cycles, far exceeding the design value of 8,000 cycles typical for conventional storage. This necessitates innovations in material systems. CATL’s silicon-doping lithium supplementation technology has already extended cycle life to 15,000 cycles, but costs remain 25% higher than conventional products.

Future Outlook: Opportunities for the Energy Storage Industry under the 2035 Strategy

According to the targets set in the document, when new energy vehicles become mainstream, the V2G energy storage market alone is expected to exceed 500 GWh. Taking into account road area energy storage, port energy storage, and other scenarios, the total market scale brought about by transportation and energy integration will reach trillions of yuan. It is recommended to pay close attention to:

• Grid-forming energy storage system integrators
• High-cycle-life battery cell manufacturers
• BMS/PCS suppliers for transportation scenarios
• Energy storage safety monitoring service providers
• Mobile energy storage equipment providers

Extended Content: The National Key Promotion Directory of Low-carbon Technologies (Fifth Batch) highlights four key technologies in the energy storage sector, paving the way for a trillion-yuan market. Additionally, the National Energy Administration has officially issued the 2025 Key Tasks for Power Safety Regulation, marking a comprehensive upgrade in energy storage safety regulation.