Top-level power rules are about to be released. What impact will they have on the new energy storage industry?
On October 19, the National Development and Reform Commission (NDRC) released the "Basic Rules for the Electricity Spot Market (Draft for Public Comment)". The new rules are scheduled to take effect on January 1 next year, and the current 2023 trial version will be abolished simultaneously. In other words, how China's electricity spot market will operate over the next five years will be primarily defined in this new set of rules.
For the new energy storage industry, the core change in these new rules lies in the fact that, for the first time, national spot market rules explicitly state that renewable energy power stations + supporting energy storage at the stations = joint bidding entities. Below, we will break down the key information regarding the introduction of these new rules.
▍ Before the New Rules: Vague Positioning of Energy Storage
1. The current 2023 trial version primarily addresses "how to build the spot market." Energy storage is only vaguely listed as a "new type of market entity," alongside distributed generation, load aggregators, and virtual power plants, resulting in a relatively ambiguous positioning.
2. The integration of energy storage with renewable energy was not mentioned in the 2023 version. Although provinces such as Shandong and Sichuan have conducted pilot programs for joint bidding of renewable energy with integrated storage, this has not been uniformly confirmed at the national rule level.
3. The 2023 version allows a choice among nodal pricing, zonal pricing, and system marginal pricing, and only governs centralized provincial/regional markets, with inter-provincial markets merely being "open for exploration."
▍ After the New Rules: New Energy Storage May Become the Biggest Winner
1. The market status of energy storage has been explicitly elevated. New types of market entities have collectively gained "official recognition." New energy storage, virtual power plants, load aggregators, smart microgrids, and direct green power connection projects are explicitly included, with dedicated chapters and articles outlining their rights and obligations, as well as independent metering and settlement rules.
2. For the first time at the national level, it is confirmed that renewable energy + supporting energy storage at the station will act as a joint bidding entity, participating in declaration, clearing, dispatch, settlement, and assessment. In other words, energy storage that was previously "mandatorily configured to meet quotas" now has a formal channel for market-based monetization.
This will accelerate the promotion of two different types of energy storage integration at renewable energy power stations:
For stations with low curtailment and mechanism-based electricity prices, not configuring energy storage will result in stable but slightly declining revenues, while configuring storage to participate in the spot market can lead to stable and increasing revenues;
For stations with high wind and solar curtailment and grid connection difficulties, configuring energy storage for joint bidding can shift the curtailed wind and solar power to peak price periods.
3. In the new rules, nodal pricing has shifted from an optional choice to a principle, setting the tone that "nodal marginal pricing will be used for clearing in principle." The "location value" of power sources and loads will be fully made explicit. In the future, when building energy storage or selecting sites for data centers, nodal locations will be the top priority. 4. The new rules explicitly encourage "expanding the price limit range." With the widened price limit interval, the peak-valley price difference will expand accordingly, and price volatility will intensify. Flexible regulation resources such as energy storage and demand response are likely to gain greater profit margins. 5. Under the new rules, the user side can "comprehensively declare quantities and prices," meaning that large power consumers can participate in bidding just like power generation enterprises, and even purchase low-cost electricity across provinces. Users who can manage their power consumption curves will save substantial amounts of money, while the traditional arbitrage model of electricity sales companies, which relies solely on information asymmetry and wholesale-retail price differences, will see its profit space narrowed.
▍ Hangjia Insights on Energy Storage Summary: Energy Storage Enters the "Market-Oriented Precision Calculation Period"
While accelerating the construction of a unified national electricity market, the new rules are also pushing the new energy storage industry into a "market-oriented operational precision calculation period." Industry differentiation will accelerate around nodal locations, duration, and operational capabilities. Those who can accurately calculate nodal prices, select the right energy storage duration, and solidify their operational and trading capabilities will thrive in the spot market.
Based on this judgment, Hangjia Insights on Energy Storage organized and compiled the "Research White Paper on the Bidirectional Synergistic Development of AI + Energy Storage," focusing on the implementation paths of AI empowering energy storage, to help enhance the operational and trading capabilities of energy storage in the electricity spot market.
Appendix: The original announcement of the "Basic Rules for the Electricity Spot Market (Draft for Public Comment)" is as follows:
Note: The content of this article is only a compilation of public information in the energy storage industry, industrial research, and objective analysis. The listed companies mentioned in the text are only for reference as industry chain cases and do not constitute any investment basis. The market has risks, and investment requires caution.