Overview
On October 8, Anhui’s development commission issued the notice on capacity tariffs for grid-side independent new-type storage, putting the mechanism into force. Targeting grid-side independent storage not paired with renewables, it uses a benchmark of 165 yuan/kW-year (coal-power capacity tariff), prorated by discharge duration (6-hour peak assumed, coefficient cap 1). Fees enter system operating costs shared by industrial/commercial users and can stack with spot-market energy revenue. Meanwhile, the 15th Five-Year Plan targets 300 GW of new storage and 160 GW pumped storage by 2030.
Background & Interpretation
1. Industry and Policy Context
New storage long relied on mandated pairing and single energy revenue with unclear profitability. The capacity tariff, borrowing coal-power capacity-compensation logic, gives independent storage a stable ‘capacity revenue’ alongside spot energy income—a pivotal shift from policy- to market-driven storage.
2. Drivers and Mechanism
The mechanism pays storage for its public-service role of peak supply and system regulation. Anchored at 165 yuan/kW-year and prorated by duration, a 6-hour asset nears coal-power compensation, improving cash flow and bankability. Assessment shifts from dispatch orders to market-clearing/plan curves, fitting spot-market logic.
3. Market Structure and Implications
Capacity tariffs add revenue certainty, favoring grid-side independent storage, grid-forming inverters and high-capacity batteries. Liaoning’s 3.15 GW first-batch selection (Envision, CATL, Sungrow) and Hebei’s 10 GW call signal scaled provincial pipelines.
Implications & Outlook
Capacity tariffs may spread from Anhui to more provinces, and with the 300 GW target, storage enters a ‘golden age’. Solid-state scaling and 15,000-cycle LFP cuts costs. Watch provincial tariff rules, spot price spreads and grid-forming penetration.
Takeaways for Industry Participants
Investors/operators should re-estimate economics on dual-track revenue, prioritizing high-utilization, grid-supportive regions. Equipment makers should strengthen grid-forming and long-life products. Industrial users should understand the cost-sharing and join demand response / VPPs for returns.