How to develop China's energy storage industry?

Finally, in line with the development expectations of China’s future electricity market, suggestions are proposed from four aspects: Market environment construction, electricity price formation mechanism, cost sharing path, and policy subsidy mechanism, to promote the healthy and rapid development of China’s energy storage industry. 1. Introduction

What is the external value of energy storage in China?

For China’s most widely used dual-pricing system, the external value of energy storage in the market can be regarded as reflecting and radiating value through the electricity market and capacity market, where the capacity market includes some functions of the ancillary services market.

Does China have a mature electricity market mechanism?

As of now, China has not yet developed a mature electricity market mechanism, and the operating and pricing mechanisms of new types of energy storage can refer to pumped storage plants, with two-part tariffs being the main mode of operation.

Why is energy storage a problem in China?

However, due to the lack of a mature electricity market environment and corresponding mechanisms, current energy storage in China faces problems such as unclear operational models, insufficient cost recovery mechanisms, and a single investment entity, making it difficult to support the rapid development of the energy storage industry.

Do electricity prices in China track the average total costs?

The coefficient of CONSTANT ( α0) is negative and the coefficient of COST ( β1) is 0.783. We have performed the Wald test to test the null hypothesis (H 0 ): α0 =0 and β1 =1, and found that it is rejected by our data at the 1% significance level. This implies that electricity prices in China do not track the average total costs.

How can energy storage projects improve economic viability in China?

The analysis points out that the improvement of electricity market mechanisms and rational subsidy policies are crucial for the economic viability of energy storage projects and are also key issues to focus on in the future development of energy storage operation models in China.