Energy storage industry frets over unstable market rules

The new energy storage industry is developing rapidly, and the number of projects planned and filed in various places in 2022 will continue to increase. Due to the continuous start of new projects, energy storage product sales companies have been the first to feel the warming of the market. The sales staff of some energy storage companies said that their department completed the annual sales target set at the beginning of the year in half a year.

Potential investors in energy storage are looking extensively for suitable investments and repeatedly calculating returns, but they are usually very cautious. Although the number of projects registered across the country has exceeded 10GWh, there are far fewer projects that have actually landed. Many practitioners told the author that the lack of stability of energy storage policies is the biggest concern of investors at the moment.

In the past few years, there have been cases where policy changes have affected the project investment rate of return. For example, the business model of energy storage and thermal power jointly participating in the frequency regulation ancillary service market once made considerable profits in Shanxi, Guangdong and other provinces, thus attracting investment from many enterprises. However, due to the market-oriented reform of auxiliary services, the trading rules of the two places have been adjusted irregularly. Shanxi Province lowered the upper limit of transaction quotations several times, and Guangdong revised the calculation formula of compensation to narrow the income gap between market players. After the revision of the rules, the frequency regulation revenue of energy storage in both places has declined to varying degrees, and the yield of energy storage power stations is lower than the estimated value at the time of investment decision-making.

The user-side energy storage has experienced the narrowing and widening of the peak-to-valley electricity price difference. In order to reduce the energy cost of enterprises, the state has continued to promote the reduction of general industrial and commercial electricity prices since 2018. Since the peak-valley electricity price is adjusted proportionally on the basis of the flat-segment electricity price, the peak-valley price difference is also reduced after the electricity price is lowered, and the profit space of energy storage on the user side is compressed. Until 2021, the National Development and Reform Commission announced the cancellation of the industrial and commercial catalog electricity prices and promoted all industrial and commercial users to enter the market. Under the situation of oversupply, the electricity price has risen, and the peak-to-valley electricity price difference in the eastern provinces has widened again, and the economy of user-side energy storage has been improved. .

In recent years, changes in the economic environment and changes in the power industry have made the development of energy storage more uncertain. The electricity price policy needs to take into account the price affordability of the whole society, so as to ensure that the energy industry has reasonable profits, and at the same time, it cannot impose an excessive burden on electricity companies and weaken their competitiveness. The reform of electricity marketization also needs to be designed from the perspective of the power industry as a whole, in order to achieve fair competition among different market players and maximize the function of the market to optimize resource allocation. Therefore, in the context of continuous changes in the general environment, energy storage can sometimes occupy a favorable position, sometimes not.

The impact of policy adjustment changes can also be seen from the development of new energy storage demonstration projects in Shandong Province. In 2021, under the non-power spot market environment, Shandong will launch support policies such as priority clearing of energy storage in the peak shaving market and incentives for priority generation to improve the economy of energy storage. However, by 2022, the long-term settlement trial operation of the spot market, the original policy is no longer operable, and Shandong has introduced the rules for energy storage to participate in the electricity spot market, but the regulations on the collection and payment of capacity electricity charges have been adjusted several times. According to the author's understanding, the actual income of the shared energy storage power station in Shandong is not as optimistic as expected by the outside world. Therefore, the exploration of the energy storage business model and supporting policies is still on the way.

Supporting the development of energy storage in a market-oriented way is the general idea of existing policies. At present, the reform of domestic electricity marketization is still in progress. While the first batch of eight electric power spot pilots has entered into continuous settlement trial operation, the second batch of six provincial-level spot pilots has also been launched successively, which is not a pilot project. Jiangxi Province has also launched its own spot simulation operation plan. The market-oriented reform means the redistribution and adjustment of the interests of all parties. Even the most mature pumped storage power station has experienced a policy window period of several years, so the uncertainty of the policy is still the new energy storage has to face. challenge.