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On December 24, the National Energy Administration officially issued the regulations on the management of power grid connected operation and the measures for the management of power auxiliary services. After a lapse of 15 years, the two documents have supplemented and deepened the providers, transaction types and compensation and allocation mechanism of power auxiliary services, which is expected to open a new framework for the top-level design of China’s power auxiliary service market. We believe that the implementation of the new version of the “two rules” will substantially benefit the development of the energy storage industry. Previously, the difficulties such as slow development of the industry and the expulsion of bad currencies from good ones due to poor cost transmission and unclear profit model will be gradually improved.
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1. Clarify the independent market dominant position of new energy storage, enrich the transaction varieties of auxiliary services, and straighten out the investment logic of independent energy storage power stations from the market position and business model.
According to the definition of power auxiliary services in the new version of the measures, the providers of auxiliary services include grid connected entities at the generation side, new energy storage and adjustable loads that can respond to power dispatching instructions, which further defines the status of new energy storage as an independent market subject, which is basically consistent with the spirit of the previous Guiding Opinions on accelerating the development of new energy storage; At the same time, the measures further enrich the transaction varieties of auxiliary services, introduce new varieties of auxiliary services such as moment of inertia, climbing, stable machine cutting service and stable load cutting service, increase the income of auxiliary services, and straighten out the investment logic of independent energy storage power stations from the market position and business model.
2. Under the principle of “who provides, who profits, who benefits and who bears”, it is more in line with the interests of participants and helps to dredge the cost of ancillary services.
The measures require that the auxiliary services shall be provided by different types of auxiliary services and different service objects in accordance with the principle of “who provides, who makes profits, who benefits and who bears”, establish a differentiated compensation, sharing and assessment mechanism with the participation of users, and change the situation that the compensation expenses are mainly borne by power generation enterprises in the past. In the future, power generation enterprises All grid connected entities such as power users share together, which is more in line with the actual demands and interests of current participants, is conducive to conducting auxiliary service costs and encouraging the construction of energy storage power stations.
3. Subsequently, all localities will revise the current management implementation rules and market transaction rules to determine the price of power auxiliary services.
According to the reporter’s reply from the national energy administration, Auxiliary service fees in China at this stage (including peak shaving) accounts for about 1.5% of the total electricity cost of the whole society. According to international experience, the proportion is generally more than 3%, and will continue to increase in the future with the increase of the proportion of new energy. At present, the compensation and cost sharing of power auxiliary services in China are composed of fixed compensation and marketization. Later, all localities will implement the current rules for the management of power auxiliary services (fixed compensation) and the trading rules of power auxiliary service market (formed by marketization) shall be revised to determine the specific types and price standards of auxiliary services, which shall be implemented after being reported to the national energy administration.
4. For new energy power generation enterprises, compensation and assessment costs may be increased to improve the enthusiasm and economy of energy allocation and storage.
For the existing new energy power stations, due to the volatility of new energy power generation, the future compensation allocation and assessment costs under the “two rules” may rise, which will promote the transformation of existing power stations to be more grid friendly, If equipped with active power automatic control system (AGC, APC), or allocation of energy storage through leasing / sharing; for new new energy power stations, the cost expenditure of future compensation and assessment expenses may be included in the calculation model of project yield, which will help to improve the enthusiasm and economy of allocation and storage of energy for new energy projects, so as to ensure the safe and stable operation of power grid system and guarantee the smooth transformation of China’s energy structure Escort.
Investment advice
The rationalization of the business model of energy storage power stations is expected to drive the rapid development of China’s energy storage industry and further improve the penetration rate of new energy. It is recommended to pay attention to Sungrow Power Supply Co.Ltd(300274) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Contemporary Amperex Technology Co.Limited(300750) , Xinyi power storage and other inverters, lithium batteries and energy storage targets, as well as related targets of new energy power generation sector.
Risk statement
The implementation of relevant policies is less than expected; The development of energy storage is less than expected.
