Does China need a capacity tariff mechanism for grid-side energy storage?

Therefore, it is necessary to use the capacity tariff mechanism to ensure that the basic income of the energy storage power station is conducive to the operation and survival of the development of energy storage in China at this stage. The Chinese government has proposed implementing a capacity tariff for grid-side energy storage.

How do energy storage operators make decisions?

Energy storage operators act as followers, making decisions regarding storage capacity and operational strategies based on the tariffs set by the grid. Their decision-making process incorporates historical capacity tariffs, operating costs, expected returns, and market dynamics.

How does a capacity tariff work for grid-side energy storage stations?

However, according to the current policy of regulatory pricing, particularly the "Opinions on Further Improving the Price Formation Mechanism for Pumped Storage Energy", the capacity tariff for grid-side energy storage stations essentially functions as an equal annual payment mechanism for initial investment recovery.

Can a capacity tariff optimization model save the energy storage system cost?

If we do not consider the Stackelberg game mechanism, the capacity tariff of the energy storage plant is calculated as 584.76 CNY/MW according to the traditional method, which shows that the capacity tariff optimization model of the grid energy storage plant proposed in this paper can save the system cost.

What are NDRC & Nea's 'guiding opinions' on grid-side energy storage?

Regarding grid-side energy storage, in July 2021, NDRC and the National Energy Administration (NEA) issued the "Guiding Opinions on Accelerating the Development of New Energy Storage", wherein they advocated for the exploration of tariff mechanisms for grid-side independent energy storage capacity (NDRC and NEA, 2021).

Does the Stackelberg game-based capacity tariff mechanism balance economic benefits?

The findings demonstrate that the Stackelberg game-based capacity tariff mechanism effectively balances the economic benefits of energy storage providers and the operational costs of the grid system, ensuring the rationality of capacity tariff pricing.