Winning Strategies Under Policy 136: Harnessing Energy Storage to Compete in the Spot Market

The Winning Strategy Under Policy Document No. 136: Capitalizing on Energy Storage and Competing in the Spot Market

April 28, 2025, marks a significant turning point for the domestic electricity market in China, with sweeping changes underway. On one hand, the release of Document No. 136 signifies the full entry of renewable energy into the market, eliminating mandatory energy storage requirements. On the other hand, the spot market is advancing rapidly, with ongoing reforms in electricity marketization that are deepening. Various operating entities are entering the market to participate in trading, further invigorating market dynamics and diversifying trading models.

The upheaval brought about by these reforms is reshaping the rules of survival in the market. Electricity sales companies are no longer just simple intermediaries; they must actively expand value-added services to meet the diverse energy needs of users. At the same time, the energy storage sector is experiencing a critical shift from a “policy-driven” to a “market-driven” paradigm. The era of relying on subsidies and blind expansion under strong policy mandates is over, marking the beginning of a new era where energy storage is intricately linked with electricity sales, and operational excellence is paramount.

Policy Guidance for Synergistic Development of Energy Storage and Electricity Sales

Energy storage requires market-oriented strategies to achieve profitability. The new era demands that energy storage devices optimize power and energy distribution while participating in various electricity markets, including medium- to long-term power markets, spot markets, and ancillary service markets, to maximize storage revenues. Clearly, Document No. 136 has become the core driving force for the synergistic development of electricity sales and storage.

In this context, Guangdong New Juneng Energy Technology Co., Ltd. is showcasing robust development momentum and market competitiveness through its forward-looking strategies and innovative business model that combines electricity sales and energy storage. The dual advantages arising from its extensive expertise in both fields are evident. According to Ma Bo, General Manager of New Juneng, the essence of energy storage is trading, and electricity sales serve as the channel for aggregating adjustable resources to participate in the electricity market. For energy storage to engage effectively in the energy market, it must be integrated with electricity sales, necessitating operational capabilities in trading.

New Juneng operates as a distributed flexibility resource operator centered on energy storage, forming the foundational business logic of its “energy storage + electricity sales” model, setting it apart from other operators in the industry.

Complexities of Energy Storage in Electricity Trading

Participating in electricity trading is not as straightforward as it may seem. It involves complex adaptations to electricity market rules, optimization of dynamic charging and discharging strategies, and the construction of multi-scenario revenue models. Operators must accurately grasp electricity price fluctuations while ensuring the performance stability of storage devices during frequent charging and discharging conditions and maximizing their lifespan through optimal strategies. This means meeting the diverse requirements of spot trading, frequency regulation support, and achieving peak-valley arbitrage among other value additions. Achieving precise alignment between equipment efficiency and market demand requires the integration of data flows, control flows, and value flows.

New Juneng consistently focuses on the value generated by energy storage devices throughout their entire lifecycle. Leveraging its profound understanding of power market trading and the hardware and software of energy storage devices, it has established a comprehensive intelligent energy storage operational capability. With its exceptional technical prowess and innovative business model, New Juneng has garnered wide recognition in the industry, with cumulative capacity in user-side energy storage projects reaching 1.45 GWh. Through its dual-driven business model of energy storage and electricity sales, New Juneng can deliver greater value to its customers. Under the “sales-storage synergy” solution, energy storage transcends being merely a technological option for renewable energy consumption; it transforms into a strategic asset that rebuilds energy competitiveness.

For instance, data from a New Juneng customer utilizing a combined energy storage and electricity sales model in March 2025 indicates that revenue from retail electricity fees, combined with reductions in wholesale costs, can yield an increase of 16.9% in peak-valley arbitrage earnings for that month.

At the 2025 Power Market Innovation Development Forum, Ma Bo emphasized the industry’s pressing need for this additional 16.9% revenue, especially as the manufacturing sector faces tight profit margins. Additional earnings also allow for better selection of valuable energy storage equipment in the supply chain, serving as a crucial method to break the cycle of industry competition.

Regular Participation in the Market for Sustained Revenue

How can regular participation in the market be achieved for sustained revenue in the current electricity trading system? New Juneng provides insights through its practical experiences. The future of distributed adjustable resources entering the market involves three trading categories: electricity transactions, ancillary service transactions, and demand response transactions. For energy storage to achieve consistent operational revenue, user-side focus must be on electricity transactions. Based on market mechanism analysis, demand response trading is influenced by macro policy environments and is effectively a short-term transitional market. Ancillary service trading, on the other hand, faces structural contradictions; its cost-sharing mechanism forces the generation side to bear the full costs, leading to a lack of incentives for user-side participation. Moreover, the requirement for equipment like AGC/AVC poses high entry barriers for small to medium-sized adjustable resources.

Electricity transactions, however, connect supply and demand directly through market-based pricing mechanisms, allowing for the avoidance of institutional barriers and high sunk costs in ancillary service markets, while also overcoming policy uncertainties in demand response trading. This provides a sustainable revenue realization pathway for distributed resources like energy storage.

Ma Bo believes that once virtual power plants participate in electricity markets, the ancillary service market for negative reserve capacity is particularly promising. By positioning energy storage as a downward regulating capability, not only can it address renewable energy consumption issues, but it can also directly utilize stored electricity or be called upon by virtual power plants to generate additional revenue. As the commercial value of distributed resources like energy storage continues to rise, virtual power plants are rapidly transitioning from theoretical models to practical industry applications.

Throughout this transformation, New Juneng has not confined itself to being merely an electricity trading service provider. From the outset, it has committed to the mission of addressing renewable energy consumption issues within new power systems, focusing on commercial and industrial energy storage. It aims to aggregate distributed energy storage resources and actively build virtual power plants that play a critical supportive role in new power systems.

New Juneng is dedicated to integrating digital technologies with energy technologies to construct a distributed power energy network. It employs cutting-edge IoT, cloud computing, artificial intelligence, intelligent control sensors, and modular storage devices at the energy consumption end to build a smart energy platform that facilitates bidirectional energy and information flow. Furthermore, it has independently developed a virtual power plant platform centered on user-side energy storage, featuring real-time monitoring, operational alerts, strategy optimization, data analysis, and demand management functionalities. This platform effectively addresses the technical bottlenecks faced by small to medium-sized adjusting resources in participating in the electricity market.

This “hardware + software + electricity sales service” ecosystem also signifies New Juneng’s evolution from being merely a mediator in the electricity market to a value reconfigurer within the power system.

AI Reshaping Corporate Capability Boundaries

With the widespread application of intelligent technologies, AI is increasingly being utilized in the electricity market. The core logic of electricity trading hinges on three major factors: load, weather, and price forecasting. Each of these elements presents complex and extensive challenges that involve cross-disciplinary integration of numerous technologies. They require market simulations for analytical forecasting, strategy optimization, and performance evaluation, involving vast amounts of data and computation. Additionally, the electricity market faces significant disruptions from non-structured data, such as macroeconomic fluctuations, extreme weather events, and sudden policy changes. These elements highlight the deep integration of electricity trading with AI.

Ma Bo states that to maximize the value of AI applications in electricity scenarios, the best avenue is through electricity sales companies. The most valuable asset of electricity sales companies is data, and the combination of AI algorithms with this data can yield substantial returns. As one of the few companies in China with both energy storage product development capabilities and electricity sales operational experience, New Juneng has amassed a wealth of data from energy storage asset operations, trading models, and electricity trading scenarios. This data, when combined with AI, becomes a unique core competitive advantage.

New Juneng primarily maximizes market AI capabilities through the deep coupling of cloud-edge architecture with AI algorithms. From an algorithmic perspective, by deeply integrating AI technologies and leveraging predictive analysis algorithms, it can forecast changes in the electricity market, weather conditions, and renewable energy outputs. This enables daily trading strategy optimization and significantly improves operational efficiency. Its unique “AI smart cockpit” assists decision-making through intelligent means, aiming to maximize returns from electricity trading.

Moreover, New Juneng utilizes a “big data foundation + AI cockpit” as core technology to achieve automated, intelligent, and real-time responses for energy dispatch control. By continuously integrating changes in grid and user loads, the platform’s dispatch algorithms can be consistently optimized to automatically seek maximum returns. Furthermore, New Juneng emphasizes the importance of software-defined energy storage devices, ensuring unified core components, electrical structures, and communication interfaces to guarantee the efficient and safe operation of the storage system. The need for frequent feedback and responses requires a sufficiently robust and coordinated cloud-edge system, while also necessitating a detailed granularity in renewable energy asset management to ensure tailored solutions for each site.

As the industry continues to undergo deep reforms and technological iterations, New Juneng expresses its intention to develop business strategies that integrate energy storage with solar energy and charging solutions, accelerating the aggregation and operational management of distributed flexible resources. It aims to promote the deep integration of energy storage industry technology with digital energy technologies, driving a digital energy revolution and contributing to a sustainable green future.