China Southern Power Grid's dispatch center has issued a 2026 work plan allowing new energy storage facilities to participate simultaneously in regional spot electricity and frequency regulation ancillary service markets, removing the previous mechanism that restricted storage to either market in the same period.

Since the 14th "Five-Year Plan" period, new energy storage in the grid's service area has grown rapidly, with cumulative installed capacity reaching 20.67 GW.

Storage facilities average 0.95 equivalent daily cycles and 3.5 hours of daily utilization, exceeding national averages by 0.25 cycles and 0.8 hours respectively, effectively supporting power supply and clean energy absorption.

A total of 83 new energy storage stations across the grid have participated in regional spot and frequency regulation markets.

Despite progress, the plan identifies multiple challenges in market-based operation. Market-oriented storage mainly participates in regional frequency regulation rather than spot markets, limiting its role in peak supply and grid peak-shaving.

Regional frequency regulation market demand remains limited, with storage stations winning frequency capacity at only 30% of their total declared capacity. Performance indicators between winning and non-winning stations show minimal differences, with no significant impact on system regulation effectiveness.

Capacity pricing mechanisms for the generation side in various provinces have yet to be announced.

The plan targets establishing a comprehensive market system combining spot trading, ancillary services and capacity pricing. In 2026, eligible grid-side storage in southern China will prioritize "declared quantity and price" participation in regional spot markets, with co-located storage and renewable stations equipped for integrated participation.

Regional frequency regulation market rules will continue improving, provincial capacity pricing mechanisms will be effectively implemented with reliable capacity testing, and grid connection management and dispatch data quality will be enhanced to achieve large-scale, market-oriented storage development.