Commercial and industrial energy storage stands out as a prime illustration of a distributed storage system deployed at the user level, displaying significant potential for growth. Battery charging and discharging enable effective load-side power regulation, thereby enhancing the utilization of renewable energy, alleviating power grid balancing challenges, and elevating overall system safety and stability. Generating revenue within this sector involves various avenues, primarily centered on aiding users in curtailing electricity expenditures (including reductions in power and capacity tariffs). In addition, incentives for demand-side response, engagement in power spot market transactions, and other strategies are involved. Presently, the primary source of revenue remains the exploitation of price differentials between peak and off-peak periods. In 2022, China’s industrial and commercial energy storage witnessed an installed capacity of 365.2MW, leading to a cumulative capacity of 705.5MW – an impressive annual growth rate exceeding 90%. GGII anticipates that this year’s domestic installed capacity is poised to surge to 8GWh, reflecting an extraordinary year-on-year increase of over 300%.
The expansion of the peak-valley price differential and the ongoing evolution of electricity reforms are acting as catalysts for industry growth. Since the issuance of the NDRC’s Notice on Further Improving the TOU Price Mechanism in July 2021, the maximum peak-valley price variance in every region of the nation has consistently widened, leading to increased profitability. The refinement of the electricity spot market system and the active engagement of industrial and commercial storage users in the electricity market are taking place. Furthermore, the electricity pricing landscape experiences heightened volatility, bolstering power throughput capacity and progressively establishing energy storage as an essential component. In terms of auxiliary services, energy storage is gradually being integrated into the core of the market framework. The deepening of electricity reform and the more frequent upgrades in demand-side response policies create substantial scope for the long-term development of industrial and commercial energy storage.