Core Viewpoint - The new energy storage industry in China is experiencing explosive growth during the 14th Five-Year Plan period, driven by electricity market reforms, with cumulative installed capacity reaching 78.3 GW/184.2 GWh by the end of 2024, and annual growth rates exceeding 100% for three consecutive years [2][3] Group 1: Market Dynamics and Regulatory Framework - The "1+6" basic rule system has established a framework for fair market access for new energy storage and other new operating entities, addressing previous institutional bottlenecks [2][3] - The promulgation of the "Basic Rules for Electricity Market Operation" in 2024 is a milestone, formally recognizing energy storage as a new operating entity with rights to participate in electricity market transactions [3] - The "Basic Rules for Electricity Market Registration" clarify the registration conditions and processes for new energy storage enterprises, facilitating orderly market entry and exit [4] Group 2: Revenue Models and Market Participation - The auxiliary service market is the primary revenue source for new energy storage, with the "Basic Rules for Electricity Auxiliary Service Market" defining key service categories and solidifying the operational status of storage enterprises [4][5] - The principle of "who benefits, who bears" ensures that auxiliary service costs are reasonably passed on to users, indicating a shift beyond zero-sum dynamics in the auxiliary service market [5] Group 3: Challenges and Future Outlook - Despite the established regulatory framework, regional disparities in market access for new energy storage remain, with limited participation in the auxiliary service market in many areas [6] - The capacity value of energy storage is becoming increasingly significant as large independent storage stations expand, highlighting the need for a reasonable capacity compensation mechanism [7] - By the end of 2025, the electricity spot market is expected to achieve full coverage, allowing new energy storage to effectively respond to price signals and stabilize load fluctuations [8]

Core Insights - The new energy storage industry in China is experiencing explosive growth during the "14th Five-Year Plan" period, with cumulative installed capacity reaching 78.3 GW/184.2 GWh by the end of 2024, and annual growth rates exceeding 100% for three consecutive years, driven by electricity market reforms [2][3] Group 1: Industry Growth and Market Dynamics - New energy storage is crucial for balancing the volatility of renewable energy sources, ensuring grid stability, and enhancing energy efficiency [1] - The establishment of the "1+6" basic rule system has removed barriers to market entry for new energy storage, allowing it to participate fairly in electricity market transactions [2][3] - The "Electricity Market Registration Basic Rules" clarify the registration conditions and processes for new energy storage enterprises, promoting orderly market entry and exit [3] Group 2: Market Participation and Revenue Models - The auxiliary service market is the primary revenue source for new energy storage, with the "Electricity Auxiliary Service Market Basic Rules" defining key service categories and establishing a cost-sharing mechanism for independent storage and virtual power plants [3][4] - The capacity trading mechanism is increasingly important as the installed capacity of large independent storage plants expands, highlighting the need for a reasonable capacity compensation mechanism [6] Group 3: Challenges and Future Outlook - Despite the established framework, regional disparities in market access for new energy storage remain, with limited participation in long-term markets in non-spot market areas [5] - The demand for auxiliary services is expected to grow as renewable energy penetration increases, positioning new energy storage as a vital support for system stability [4] - By the end of 2025, the electricity spot market is expected to achieve full coverage, allowing new energy storage to effectively respond to price signals and stabilize load fluctuations [7]