National Policies and Top News

01 The National Development and Reform Commission and the National Energy Administration issued the “Notice on Improving the Capacity Pricing Mechanism on the Generation Side.”

On January 30, the National Development and Reform Commission and the National Energy Administration issued the "Notice on Improving the Capacity Pricing Mechanism on the Generation Side." The document clearly states: a new, independent capacity pricing mechanism for grid-side novel energy storage systems will be established. For grid-side novel energy storage power stations that serve the safe operation of the power system and do not participate in distributed energy storage, local authorities may provide capacity-based pricing. The level of capacity pricing shall be based on the local coal-fired power capacity pricing standard and adjusted according to peak capacity at a certain ratio (the adjustment ratio is calculated by dividing the duration of continuous discharge at full power output by the longest annual net-load peak duration, with a maximum cap of 1). The specific capacity pricing level will also take into account factors such as the progress of electricity market development and the demand of the power system. Grid-side novel energy storage power stations will be managed under a roster system; detailed management requirements will be specified separately by the National Energy Administration based on analyses of the supply-demand situation and measures to ensure power supply. The specific project roster will be formulated jointly by the provincial-level energy authorities and price authorities.

The compensation scope of the reliable capacity compensation mechanism may include coal-fired power, gas-fired power, and eligible grid-side independent new energy storage systems that voluntarily participate in the local market. Once the reliable capacity compensation mechanism is established, the relevant coal-fired power units, gas-fired power units, and grid-side independent new energy storage systems will no longer be subject to the original capacity-based electricity tariffs.

The capacity electricity charges and reliability capacity compensation fees for the aforementioned adjustable power sources shall be included in the local system operation costs. In regions where the spot market operates continuously, the charging and discharging prices for pumped-storage hydropower and independent new energy storage systems on the grid side shall be determined according to market rules or real-time spot prices.

During pumping (charging) for pumped-storage hydroelectricity and grid-side independent new energy storage systems, the entity is treated as a user and shall pay the transmission loss charges and system operation fees associated with the grid connection. For the time being, the transmission and distribution tariffs will be applied on a single-electricity-rate basis to such users. The transmission and distribution charges will be reduced accordingly for the electricity generated (discharged).

In addition, the two ministries stated in their response that independent new energy storage systems on the grid side can have their capacity-based pricing mechanisms established by local authorities. Such mechanisms should take into account factors such as local coal-fired power capacity and electricity pricing standards, discharge duration, and contribution during peak demand periods.

For industrial and commercial users, after the capacity pricing mechanism on the generation side is refined, the costs recovered through the energy market for adjustable power sources will decrease, while the costs recovered through capacity pricing will increase. This “one rise, one fall” effect largely offsets each other, resulting in little impact on the electricity purchasing costs for industrial and commercial users.

Local Policies and Top News

01 State Grid Shandong Electric Power Company issued the “Notice on Further Optimizing the Access Management of Centralized Renewable Energy Generation Projects, New Energy Storage Projects, and Conventional Power Projects.”

On February 2, 2026, State Grid Shandong Electric Power Company issued the "Notice on Further Optimizing the Access Management of Centralized Renewable Energy Generation Projects, New Energy Storage Projects, and Conventional Power Projects," which published the notices of acceptance and non-acceptance of grid connection intentions, notices of acceptance and non-acceptance of access system design plans, responses to access system design plans—including those that were not approved—and grid connection agreements.

The processing timeframe for centralized renewable energy generation projects of 110 kV and below, new energy storage projects, and conventional power source projects—from the date of acceptance of the grid connection plan to the date of reply on the grid connection plan—is as follows: 30 working days for 110 kV power source projects and 20 working days for 35 kV and lower power source projects.

For centralized renewable energy generation projects of 220 kV and above, new energy storage projects, and conventional power source projects, the time limits are as follows: For power source projects of 500 kV and above, the period from receipt of the grid connection plan application to issuance of the grid connection plan reply is 40 working days; for 220 kV power source projects, the period from receipt of the grid connection plan application to submission of relevant materials to the provincial company is 5 working days; from submission of relevant materials to the provincial company to the holding of a review meeting is 10 working days; and from the holding of the review meeting to the issuance of a written response is 15 working days.

For power projects requiring the construction of new grid connection facilities, the approval (or filing) of both the power plant itself and the grid connection project must be completed within 30 working days. For power projects that do not require the construction of new grid connection facilities, a formal response to the system integration design plan must be provided within 30 working days.

Nuclear power and pumped-storage hydroelectric projects shall be implemented in accordance with this notice. Power generation projects utilizing comprehensive resource utilization at 35 kV and below shall be governed by the grid connection management procedures for distributed power sources.

02 Anhui Electricity Trading Center Releases the “Implementation Rules for Spot Electricity Trading in Anhui’s Electricity Market”

On January 31, 2026, the Anhui Electricity Trading Center released the “Implementation Rules for Spot Electricity Trading in the Anhui Electricity Market” (Settlement Trial Operation Version 6.1), which states that independently operated energy storage systems and virtual power plants participating in the “quantity-and-price bidding” process may choose one of the following clearing methods when submitting their bids: (1) participate solely in spot electricity market clearing; (2) participate solely in frequency regulation market clearing; (3) if they do not win a bid in the spot electricity market, they shall participate in the next-day frequency regulation market clearing. If no option is selected, the default clearing method will be (1). For independently operated energy storage systems already participating in the spot market, the electricity charges incurred during their participation in the frequency regulation market will be settled according to the rules applicable to the spot market.

Independent energy storage systems participating in the spot market either through “quantity-and-price bidding” or “quantity-only bidding (self-scheduling)” must be capable of receiving dispatch instructions from the spot market. The charging power is tentatively set at no less than 5 megawatts, and the continuous charging duration must be no less than 1 hour.

The attached parameter table shows that both the upper and lower limits for bid prices and clearing prices in the electricity market are between 0 and 1.1 yuan/kWh.

The energy price for energy storage refers to the price per unit of electrical energy when the energy storage power station operates within the range from zero to its rated capacity. The declared discharge price must be higher than the charging price. Independent energy storage facilities participating in the spot market shall, in principle, follow the generation schedule cleared in the day-ahead energy market when operating in the real-time market.

03 The Development and Reform Commission of Fengyang County, Anhui Province, has released the “Several Policies for Promoting the High-Quality Development of Advanced Photovoltaic and New Energy Storage Industries in Fengyang County (Revised Draft for Comments).”

On February 3, the Development and Reform Commission of Fengyang County, Anhui Province, released the "Several Policies for Promoting the High-Quality Development of Advanced Photovoltaic and New Energy Storage Industries in Fengyang County (Revised Draft for Comments)." The policy states that advanced photovoltaic and new energy storage manufacturing projects that align with the aforementioned industrial transformation directions will receive an additional subsidy equal to 5% of their equipment investment amount—first upon commencement and inclusion in statistical records, and again one month after the project begins production. Furthermore, if such a project is upgraded to a large-scale enterprise within one year of operation, it will receive an additional subsidy equal to 10% of its equipment investment amount. In principle, the total cumulative subsidies shall not exceed 20% of the equipment investment amount, with the equipment investment amount being determined based on the invoices issued. At the county level, the maximum subsidy per enterprise shall not exceed 20 million yuan. For service-oriented enterprises, in addition to enjoying the same provincial and municipal subsidies, they will receive a subsidy equivalent to no more than 10% of their invoiced operating revenue generated during the first accounting year. At the county level, the maximum subsidy per enterprise shall not exceed 10 million yuan.

For advanced photovoltaic and new energy storage enterprises that meet the "Standard Conditions for the Photovoltaic Manufacturing Industry" and the "Standard Conditions for the Lithium-Ion Battery Industry" issued by the Ministry of Industry and Information Technology, and that are included for the first time on the list of pilot demonstration enterprises for smart photovoltaics, in addition to enjoying the same provincial and municipal subsidies and rewards, a one-time reward of up to 300,000 yuan will be provided.

We will support enterprises in investing in and building advanced photovoltaic and new energy storage manufacturing projects that align with the direction of industrial attraction. For newly established manufacturing projects with actual fixed-asset investments exceeding 100 million yuan, we will encourage the demonstration application of innovative scenarios in Feng County, including building-integrated photovoltaics, smart microgrids, low-carbon industrial parks, shared energy storage, and vehicle-to-grid integration. For innovative application scenarios that feature leading technological approaches, broad application prospects, high replicability and scalability, and strong industrial driving effects, we will actively recommend them for nomination as outstanding national and provincial-level cases and strive to secure corresponding incentive funds.

04 The Beijing Municipal Bureau of Economy and Information Technology recently issued the “Notice on Launching the 2026 ‘Create the Future’ Growth Program.”

The Beijing Municipal Bureau of Economy and Information Technology recently issued the "Notice on Launching the 2026 'Create the Future' Growth Program." This program aims to identify and support early-stage companies with high growth potential. Among the six key areas for cultivation, "Future Energy" has been designated as one of them, with particular emphasis placed on sub-sectors such as next-generation energy storage, hydrogen energy, and fusion energy.

According to the notice, Beijing will provide tiered support—up to 10 million yuan—in the form of “grant-to-investment” conversions to early-stage energy storage companies that have been selected through a rigorous screening process and public roadshows, covering seed, angel, and Series A funding rounds. The program will open for applications on January 28 and aims to identify and nurture more than 100 promising enterprises by 2026, thereby accelerating the development of new-quality productivity.