The Energy Storage Report 2024

Now available to download, covering deployments, technology, policy and finance in the energy storage market

China’s power market regulation update accomodates energy storage, revises trading rules

By Carrie Xiao
LinkedIn
Twitter
Reddit
Facebook
Email

On May 14th, China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the “Basic Rules for the Operation of the Power Market” (hereinafter referred to as the “Rules”).

These rules will officially come into force on July 1st, 2024.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

This marks the first time in 20 years that China’s power market operation rules have undergone changes. Compared to previous and existing legislation, the new rules include significant revisions and are intended to improve various aspects of market design and operation.

Firstly, the new rules further clarify the qualifications of power market participants and make specific provisions on the rights and obligations of various types of market players.

According to the document, new types of business entities such as energy storage companies, virtual power plants (VPPs), and load aggregators have been added to lists of eligible and qualified power market members while the market registration management system has been widely promoted.

For the first time, capacity trading has also been included in the scope of power trading. It has grown to be one of the three major types of transactions alongside energy trading and ancillary service trading.

The subject of capacity trading is the output capacity that can reliably support the maximum load in a certain period in the future provided by generating units, energy storage, etc.

Changes ahead for China’s ancillary services, power trading markets

In line with the construction needs of China’s future power system, efforts will gradually be made to establish a market-oriented capacity cost recovery mechanism. This includes exploring ways to guide operating entities to invest rationally through capacity compensation and capacity markets to ensure a long-term capacity abundance in the power system.

It should also be noted that the document has refined the definitions and trading methods of power and ancillary services trading. According to the trading cycle, power trading is divided into long-term and spot trading.

Ancillary service trading includes paid ancillary services such as frequency regulation, backup, and peak shaving.

Power trading can be carried out through bilateral and centralised trading methods, and qualified auxiliary services providers are chosen by way of market competition.

Furthermore, the new rules have also strengthened the regulatory measures for power market operation. By setting stricter market access thresholds and intensifying the crackdown on market manipulation, the aim is to prevent and curb phenomena such as market monopoly and unfair competition, ensuring the stable power market operation.

At the same time, the new regulations have also proposed higher penalty standards for violations.

Energy-Storage.news’ publisher Solar Media will host the 2nd Energy Storage Summit Asia, 9-10 July 2024 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.

Read Next

June 14, 2024
Plus Power has closed financing for a 150MW/300MWh standalone battery energy storage system (BESS) project in Massachusetts, US.
June 11, 2024
US lawmakers have accused lithium-ion battery OEMs CATL and Gotion High-Tech of having supply chain connections to forced labour and Uyghur oppression in China – a claim the firms adamantly deny – and called on an immediate block on shipments of their products.
June 11, 2024
Telecoms specialist Elisa is deploying battery and PV systems at base towers in Finland, which will “implement virtual power plant (VPP) optimisation of locally produced solar energy.”
June 11, 2024
A battery energy storage system (BESS) comprising Tesla Megapacks with output of 10.8MW and 43MWh storage capacity has gone into operation in Sendai, Japan.
June 10, 2024
The EV charging and energy solutions arm of Volkswagen Group is entering the large-scale BESS market, with individual projects up to 350MW/700MW in size and the first, in Germany, planned for next year.

Most Popular

Email Newsletter