Is there any subsidy for investment in energy storage power stations

Will China keep implementing policy incentives for energy storage?

To effectively guarantee its grid stability of renewable energy sources, the Chinese government is expected to keep implementing its policy incentives for energy storage in the near future. This particular dataset provides us with the technical specifications of an energy storage system and allows us to calculate the model parameters.

Will state aid be available for large-scale electricity storage systems?

In autumn 2024 two draft regulations were published regarding state aid for large-scale electricity storage systems (BESS), one from the Modernisation Fund (“MF ”) 1 - and the second under the National Recovery and Resilience Plan (“RRP ”) 2.

How does a subsidy removal policy affect firms' willingness to invest?

The threshold decreases as the expectation of the subsidy removal policy increases during the implementation stage for a given policy intensity. This indicates that under current favorable policy situation, the firms' willingness to invest now increases as the expectation of subsidy removal policy increases. Fig. 2.

Do firms invest immediately if there is no subsidy?

Recall that if there is no subsidy, firms would invest immediately if κ> κ 0 ∗, and hold the option if κ <κ 0 ∗. Fig. 1 shows that the threshold value rises when the probability of a subsidy in the future is higher. Firms tend to adopt a wait-and-see approach when there is no subsidy policy in place.

What if there is no government subsidy?

Without government subsidies, the uncertainty that firms face when making investment decisions is mainly due to the fluctuation in the peak-valley spreads. The fluctuation, however, is capped by a maximum set by the government to keep the stability of the electricity market.

Can a subsidy policy be activated or terminated at an uncertain time?

The subsidy policy, however, can be activated or terminated at an uncertain time and therefore, the firms face additional policy uncertainty when making the decision. We derive the investment thresholds of the market spread that the firms use to make a decision on investing immediately or holding an option.