Notice of the National Development and Reform Commission and the National Energy Administration on Encouraging Renewable Energy Power Generation Companies to Build or Purchase Peak-shaving Capacity to Increase the Scale of Grid Connection

Development and Reform Operation (2021) No. 1138

The development and reform commissions of all provinces, autonomous regions, and municipalities directly under the Central Government, the Economic and Information Commission (Industry and Information Technology Commission, the Department of Industry and Information Technology), the Energy Bureau, Beijing Municipal Management Committee, State Grid Corporation of China, China Southern Power Grid Corporation of China, China Huaneng Group Co., Ltd., China Datang Group Co., Ltd., China Huadian Group Co., Ltd., State Power Investment Group Co., Ltd., State Energy Investment Group Co., Ltd., China Development and Investment Group Co., Ltd., China Resources Group Co., Ltd.:

In order to strive to achieve the goal of independent contribution to climate change, and to promote the vigorous development and full consumption of renewable energy such as wind power and solar power, in accordance with the relevant laws, regulations and policies of renewable energy, in accordance with the construction of energy production, supply, storage and marketing system and renewable energy Relevant requirements for consumption, on the basis of grid companies assuming the responsibility of renewable energy guarantee grid connection, encourage power generation companies to build or purchase peak shaving energy storage capacity to increase the scale of renewable energy power generation installations and grid connection. This is hereby notified as follows:

1. Fully understand the importance and urgency of increasing the scale of renewable energy grid connection In recent years, my country's renewable energy has developed rapidly, but shortcomings and problems such as insufficient flexibility of the power system and insufficient adjustment capabilities have been prominent, restricting the development of a higher proportion and larger-scale renewable energy. In the future, my country will achieve its carbon peak by 2030 and strive to achieve the goal of carbon neutrality by 2060. It is an arduous task and requires arduous efforts. The key to achieving carbon peaks is to promote the development of renewable energy. The key to promoting the development of renewable energy lies in the consumption. The key to ensuring the consumption of renewable energy lies in grid access, peak shaving and energy storage. All localities and relevant power companies must fully understand the equal importance of renewable energy development and consumption, attach great importance to the grid connection of renewable energy, and simultaneously research and advance the development, grid connection, and consumption of renewable energy to ensure that 2030 Before the peak of carbon, the goal of carbon neutrality by 2060 was achieved on schedule.

2. Guide market entities to increase the scale of renewable energy grid connection through multiple channels

(1) Increase the grid-connected consumption capacity of renewable energy through multiple channels. Grid companies must effectively assume the main responsibility for grid construction and development and grid-connected consumption of renewable energy, and coordinate the construction of peak shaving capacity and resource utilization. In the newly added grid-connected consumption scale each year, grid companies should bear the main responsibility, and power supply companies should appropriately Undertake the responsibility of grid-connected and consuming renewable energy. With the advancement of new energy power generation technology, the improvement of efficiency, and the decrease of system peak-shaving costs, the scale and proportion of consumption undertaken by power grid companies will be reduced in an orderly manner.

(2) Encourage power generation companies to build their own energy storage or peak shaving capacity to increase the scale of grid connection. In addition to the guarantee of grid-connected renewable energy such as wind and solar power generation by grid companies, renewable energy power generation companies that are still willing to invest in construction are encouraged to build their own energy storage or peak shaving resources on a voluntary basis to increase the grid-connected scale. For renewable energy power generation companies that require energy storage or peak shaving capacity in accordance with the prescribed proportions, after the grid companies have identified them in accordance with the procedures, they can arrange corresponding installations and grid connections.

(3) Allow power generation companies to purchase energy storage or peak shaving capacity to increase the scale of grid connection. In addition to grid companies assuming the responsibility for guaranteed grid connection of renewable energy such as wind power and solar power, renewable energy power generation companies that are still willing to invest in construction can assume peak shaving responsibilities through market-oriented transactions with peak shaving resource market entities. In order to increase the scale of renewable energy power generation installed capacity and grid connection. Encourage renewable energy power generation companies to sign agreements or contracts for new consumption capacity with newly added pumped storage and energy storage power stations to clarify responsibilities and obligations for the construction and operation of market-oriented peak shaving resources. Renewable energy power generation companies that have signed energy storage or peak shaving capacity contracts can arrange for the corresponding installation and grid connection after the power grid company has identified them in accordance with the procedures.

(4) Encourage multiple channels to increase peak shaving resources. Responsible for peak shaving resources for renewable energy consumption, including pumped storage power stations, chemical energy storage and other new energy storage, gas power, solar thermal power stations, and coal power for flexible manufacturing and transformation. The above peak shaving resources do not include the resources that have been listed as emergency backup and peak shaving power sources.

3. Confirmation and management of self-built and co-built peak shaving and energy storage capabilities

(1) The self-built peak shaving resource method is linked to the ratio requirements. Self-built peak shaving resources refer to the construction of pumped-storage, chemical energy storage power stations, gas power, solar thermal power stations or the flexible transformation of coal-fired power generation by power generation enterprises in proportion to their wholly-owned assets. In order to encourage market-oriented power generation companies to participate in the construction of peak-shaving resources, the scale beyond the guaranteed grid connection of power grid companies will initially be linked to 15% of the power (duration 4 hours or more, the same below), and the peak-shaving capacity will be linked to 20% or more. Proportionally, the priority is given to grid connection. The distribution ratio will be adjusted in due course according to the situation after 2022 and announced once a year. After each provincial-level competent department organizes power grid companies or third-party technical institutions to evaluate and confirm the project's peak shaving capacity measures and effects, they can appropriately adjust the linkage ratio based on the actual situation.

(2) Co-construction peak shaving resource method linked ratio requirements. Joint construction of peak-shaving resources refers to the construction of pumped storage, chemical energy storage power stations, gas power, solar thermal power stations or the flexible transformation of coal power by power generation companies with other market entities in a certain proportion of investment. After the joint construction of peak-shaving resources is completed, the linked ratio of self-built peak-shaving resources can be multiplied by the investment ratio to build renewable energy power generation. In order to encourage power generation companies to actively participate in self-built peak shaving resources, the initial stage can be appropriately higher than the proportion of investment in the construction.

(3) Self-built and joint construction of peak shaving and energy storage capabilities are determined. Self-built and joint construction peak shaving and energy storage capabilities are determined in accordance with the principle of "enterprise commitments, government filings, process verification, and one penalty two for fakes". Power generation companies that actively build their own peak shaving and energy storage capabilities, provide their own peak shaving and energy storage project construction certification materials, make clear commitments on the basic conditions of the project, peak shaving capabilities, and commissioning time, and submit them to the provincial government for filing ; During the implementation process, the provincial-level competent authority entrusts grid companies or third-party agencies to conduct comprehensive inspections or spot checks on the company’s self-built joint construction projects. For companies that are found to have failed to fulfill their construction responsibilities as promised, the peak shaving capacity shall be calculated based on the uncompleted capacity 2 times will be deducted; relevant companies must rectify within a time limit, and companies that fail to rectify on time are not allowed to participate in the next year's renewable energy market integration.

(4) Strengthen the operation and management of self-built and joint construction peak shaving and energy storage projects. After the self-built and co-built peak shaving and energy storage projects are completed and put into operation, the enterprise can choose to operate the project independently or hand it over to the local power grid enterprise for dispatch and management. For peak shaving and energy storage projects independently operated by power generation companies, they can participate in the power market as an independent market entity and obtain revenue in accordance with relevant national policies; Feng needs to carry out scheduling management of related projects, and the projects obtain revenue in accordance with relevant price policies. In order to ensure the availability of project peak shaving and energy storage capacity, the grid dispatching agency conducts dispatching tests on related projects from time to time.

4. Confirmation and management of purchasing peak shaving and energy storage capacity

(1) The main method of purchasing peak shaving resources. Purchasing peak-shaving resources means that power generation companies purchase peak-shaving capacity from market entities such as pumped storage, chemical energy storage power stations, gas power, solar thermal power stations, or thermal power plants that carry out flexible transformations through market transactions, including the purchase of peak-shaving energy storage projects There are two ways to purchase peak shaving energy storage services. In order to ensure that the peak-shaving resources purchased by power generation companies do not occupy the overall system absorption capacity of the grid companies, the subjects purchased are limited to the newly-built peak-shaving resources this year.

(2) Requirements for the purchase of peak shaving resources linked to the ratio. The scale beyond the guaranteed grid-connection of power grid companies will initially purchase peak-shaving capacity at a linkage ratio of 15%, and purchase at a linkage ratio of more than 20% is encouraged. The purchase ratio will be adjusted in due course according to the situation after 2022 and announced once a year. After each provincial-level competent department organizes power grid companies or third-party technical institutions to evaluate and confirm the project's peak shaving capacity measures and effects, they can appropriately adjust the linkage ratio based on the actual situation.

(3) Determination of purchasing capacity for peak shaving and energy storage. For the purchase of peak shaving and energy storage projects, the buyer company makes a commitment to the provincial government authority and provides a purchase contract, which is determined according to the peak shaving capacity signed in the purchase contract. During the implementation process, the buyer’s company is responsible for urging the seller’s company to ensure that the project is in place. The provincial government authority entrusts the power grid company or a third-party agency to conduct a comprehensive inspection or spot check on the items in the purchase contract. When calculating the peak shaving capacity, it will be deducted at twice the uncompleted capacity; the relevant enterprises shall rectify within a time limit, and the enterprises that fail to rectify on schedule shall not participate in the next year's renewable energy market integration.

(4) Strengthen the operation and management of purchasing peak shaving and energy storage projects. After the purchase of peak-shaving and energy storage projects are completed and put into operation, the purchase of peak-shaving energy storage projects shall be regarded as the enterprise’s self-built projects for operation and management; for the purchase of peak-shaving energy storage services, the power generation company shall sign a contract with the peak-shaving energy storage project enterprise The peak shaving service is bound to an agreement or contract, stipulating the rights and responsibilities of both parties and the method of income distribution, and encouraging the signing of long-term agreements or contracts of more than 10 years. In order to ensure the availability of project peak shaving and energy storage capacity, the grid dispatching agency conducts dispatching tests on related projects from time to time.

5. Self-built or purchased quantity standards and dynamic adjustment of peak shaving and energy storage capacity

(1) Identification of the capacity of pumped storage, electrochemical energy storage and CSP stations. For pumped storage power stations, electrochemical energy storage and CSP stations, the peak shaving capacity shall be determined according to the installed capacity.

(2) Identification of gas-electric peak regulation capability. The gas power plant shall determine the peak-shaving capacity according to the design output of the unit. For the limited power generation output due to gas source, weather and other reasons, the peak-shaving capacity shall be determined according to the actual maximum output.

(3) Identification of the peak-shaving capacity of coal-fired power flexible manufacturing and transformation. For the flexible manufacturing and transformation of coal-fired power units, the peak regulation capacity shall be determined according to the difference between the adjustable output range of the manufacturing transformation and the adjustable output before the transformation or the average adjustable output range.

(4) Make overall arrangements for the construction and commissioning sequence of power generation and peak shaving projects. Considering the construction cycle of new peak-shaving resource projects, when arranging power generation projects, all localities should complete and synchronize with the new peak-shaving projects and connect to the grid. The proportion of peak shaving and energy storage is implemented in accordance with the standards of the year when the renewable energy power generation project was approved (recorded). (5) Establish a dynamic adjustment mechanism for peak shaving and energy storage capacity standards and the ratio of equipment to construction. With the continuous expansion of the grid-connected scale and proportion of renewable energy, as well as the advancement of peak-shaving energy storage technology and the reduction of costs, all localities must coordinate the relationship between enterprise enthusiasm and system peak-shaving demand. Dynamic adjustments are made to the performance and capacity standards and the proportion of equipment to be built.

6. Operation and supervision of peak shaving and energy storage trading mechanism

(1) Unused peak shaving resources can be traded to other market entities. Power generation companies that implement peak shaving resources through self-construction or joint construction, if the renewable energy power generation scale built in the current year is less than the specified proportion, it is not allowed to carry over to the next year for continued use, and it can be traded to other power generation companies through market-oriented methods .

(2) Index transactions need to be coordinated within the province. In order to ensure that the new peak-shaving capacity effectively plays the role of promoting the consumption of renewable energy, power generation companies are within the province (district, city) in the process of self-construction, joint construction, purchase of peak-shaving resources, and transaction of peak-shaving resource indicators. Carry out overall planning.

(3) Strengthen operation supervision. Local government authorities, together with power grid companies, strengthen supervision of power generation companies’ commitments to build, jointly build, or purchase peak-shaving projects. After the project is put into operation, dispatch agencies will irregularly carry out dispatch operations in accordance with the peak-shaving capacity promised by the company to ensure that the peak-shaving capacity is true and credible. Operational, for companies that falsely promise peak shaving capabilities, they will be disqualified from taking responsibility for renewable energy consumption in the next year.

7. Safeguard measures

(1) Strengthen organization and leadership. The National Development and Reform Commission and the National Energy Administration coordinate the promotion of the national renewable energy power generation enterprises' self-built or purchase of peak shaving capacity to increase the grid-connected scale, comprehensively track the implementation progress of various regions and enterprises, and coordinate to solve major problems in the promotion. The development and reform commissions and energy bureaus of all provinces (autonomous regions and municipalities directly under the Central Government), in conjunction with relevant provincial-level departments, combined with local power development practices to encourage local power generation companies to take responsibility for the consumption of renewable energy on their own, and guarantee grid-connected, emergency backup, and coordination with power grid companies. The construction of peak generating units shall be effectively connected to avoid double counting of projects.

(2) Power grid companies earnestly exert their responsibilities for supervision and grid connection. The State Grid Corporation of China and China Southern Power Grid should organize grid companies from all over the country and cooperate with local government authorities to strengthen effective supervision of power generation companies’ self-built, co-built and purchased peak-shaving energy storage projects to ensure the smooth progress and real availability of various projects. For companies that have completed peak shaving and energy storage capacity building as required, they must conscientiously do a good job of grid-connected new energy with a corresponding scale.

(3) Improve the reward, punishment and evaluation mechanism. The National Development and Reform Commission and the National Energy Administration will improve the rewards, punishments, and evaluation mechanisms, commend the areas where renewable energy power generation companies build their own or purchase peak shaving capacity to increase the grid-connected scale, and make progress in areas where work is lagging behind. In the process of work advancement, third-party assessments will be adopted in due course to carry out a comprehensive assessment of the work of local renewable energy power generation companies to build or purchase peak shaving capacity to increase the scale of grid connection.

National Development and Reform Commission

National Energy Board

July 29, 2021