Transforming Independent Energy Storage: Insights from Document 136 and Its Impact by 2025

This year, the National Development and Reform Commission (NDRC) released a notice titled “Notice on Deepening the Market-Oriented Reform of Renewable Energy Grid Pricing to Promote High-Quality Development of Renewable Energy” (commonly referred to as “Document No. 136”). This document requires that all renewable energy be fully integrated into the market, transitioning through mechanisms such as pricing and bidding rules. This shift introduces significant uncertainties for the further development of energy storage.

Currently, there are two prevailing viewpoints: first, that the pace of energy storage development will be greatly restricted in the short term; and second, that in the long term, energy storage will progress in a healthy and orderly manner. Recently, Shandong and Guangdong, as the first provinces to implement detailed regulations, have optimized aspects such as bidding mechanisms, execution timelines, and revenue models to suit their local conditions, thereby creating a vital environment for independent energy storage development.

From the comparison of the two sets of regulations, it is evident that new trends are emerging in the direction of independent energy storage by 2025, including shared storage, technological competition, and competitive dimensions that may signify a qualitative change.

Comparison of Shandong and Guangdong’s Regulations

Upon examining the detailed regulations, notable differences remain between Shandong and Guangdong. Shandong emphasizes “sufficient competition,” mandating that the bidding submission rate for incremental projects be no less than 125%, using the highest bid as the mechanism price. For example, if the highest bid in a bidding round is 0.35 yuan/kWh, all selected projects will execute at this price, compelling low-price competition through supply and demand dynamics.

In contrast, Guangdong employs a “low price priority + time priority” sorting rule, determining the final mechanism price based on the highest bid of selected projects without setting a submission rate threshold. For instance, if Project A bids 0.3 yuan and Project B bids 0.32 yuan, both projects will have a mechanism price of 0.32 yuan. This design relies more on market self-regulation, requiring greater foresight regarding project economics.

Shandong applies a transitional price of 0.3949 yuan/kWh (inclusive of tax) for existing projects, linking the duration to the remaining reasonable utilization hours. Incremental projects will see dynamic adjustment of the execution period, with no fixed term specified. For example, if a photovoltaic project has 1200 remaining reasonable utilization hours, the transitional price is only valid within that period, after which it must be fully market-based.

Conversely, Guangdong maintains existing policies for current projects while setting rigid execution periods for incremental projects—14 years for offshore wind and 12 years for other projects. This long-term assurance provides stability for investors but must align with technological advancements to avoid future pricing risks.

Both provinces utilize a centralized bidding approach, prioritizing low-cost projects; however, Shandong regulates competitive intensity through submission rates, while Guangdong imposes limits via ratios or price ceilings. Shandong has eliminated mandatory storage configurations, instead requiring energy storage to be integrated through market transactions while emphasizing controlled timelines for full capacity grid connection. For example, distributed photovoltaic systems must utilize qualified agents for bidding to prevent “false declarations.”

Guangdong introduces the “Four Available” standards—observable, measurable, adjustable, and controllable—making technical compliance a prerequisite for pricing execution. If a project fails to meet these standards, its mechanism volume automatically becomes invalid and will not be settled. Additionally, delayed project launches will incur tiered penalties to incentivize efficiency.

Both regional policies adhere to the “full market entry + mechanism pricing” framework of Document No. 136, smoothing out revenue fluctuations through differential pricing settlement. They encourage collaboration between energy storage and renewable energy to enhance flexibility via market transactions. Shandong focuses on competitive intensity and existing project support, while Guangdong refines incremental bidding rules, exploring synergies between green electricity and market dynamics.

Shifts in Independent Energy Storage by 2025

The detailed regulations from Shandong and Guangdong provide differentiated policy benefits for independent energy storage. The years 2025-2026 will be crucial for large-scale deployment, with subsequent developments in inter-provincial market collaboration, capacity pricing mechanisms, and deepening green electricity transactions expected to further advance the construction of a new power system.

With Document No. 136 abolishing mandatory storage policies for renewable energy, independent energy storage is positioned to seize development opportunities as the core vehicle for market transformation. Shandong and Guangdong, as pioneers in implementing detailed regulations, indicate a shift in the trends of independent energy storage.

Emerging Trends

Trend One: Under the diversified electricity trading landscape, shared storage is rapidly emerging as a mainstream solution. Market mechanisms are accelerating the transformation of energy storage from a single function to a multi-faceted role encompassing peak shaving, frequency modulation, backup, and black start capabilities. For example, a 100 MW power station in Shandong has achieved annual revenues exceeding 120 million yuan by accurately predicting price fluctuations, with an internal rate of return (IRR) of 12%. In Guangdong, where electricity price fluctuations are minimal, energy storage relies on high-frequency modulation services to enhance profits.

Trend Two: Safety and profitability pose significant challenges, leading to a technological transformation phase in 2025. The dynamic bidding mechanism compels energy storage companies to produce safer and more economically viable products to support renewable energy market entry effectively. Additionally, as the penetration of renewable energy increases, grid fluctuations intensify, necessitating the development of high-safety, high-reliability systems to meet urgent grid demands.

Trend Three: With the introduction of new variables like virtual power plants and carbon-electricity collaboration, competition in the energy storage industry is becoming increasingly multidimensional. As the age of virtual power plants accelerates, independent energy storage, as a core component, must collaborate with photovoltaic systems, wind power, and charging stations, thereby expanding its potential significantly.

In conclusion, the competition in the energy storage industry has shifted from a focus on hardware performance to a comprehensive evaluation of technological integration capabilities, business model design, ecological collaboration depth, and responsiveness to policy changes. The differentiated policies of Shandong and Guangdong serve as a “dual-city experiment” in electricity market reform. Shandong aims to reduce energy costs through robust competition, while Guangdong attracts technology-intensive investments with long-term stability. As more regional regulations emerge, these three major trends are becoming increasingly clear, and how companies adapt will significantly impact their survival and success in the energy storage sector.