Gf Securities has released a research report stating that the economic viability of new energy storage is improving, the profit stability of thermal power is increasing, and pumped storage is being enhanced steadily. By 2026, demand for new energy storage in China is expected to maintain robust growth, which is likely to drive profitability improvements across the energy storage industry chain; the report recommends leading companies in energy storage batteries and materials. Leading system integrators with advantages in site selection and operations are expected to achieve higher returns on energy storage power stations and increase their market share. Trading capabilities in the electricity market are anticipated to become a core competitive barrier for energy storage station operations. The main views of Gf Securities are as follows.

Historical Context: Pumped Storage + Coal Power Lead, Gas Power + New Energy Storage Follow. At the national level, pumped storage was the first area to explore a national capacity pricing policy, followed by an expansion to coal-fired power generation driven by power shortages. At the local level, China's practical experience with capacity pricing mechanisms began with designs targeting natural gas units. For new energy storage, many provinces are actively exploring diverse capacity mechanisms; since 2023, some regions have introduced capacity compensation policies for independent energy storage, though specific implementation rules vary.

Development Trends: Unified Pricing, Market-Oriented Evolution. In recent years, China has continuously strengthened policy guidance for the development of capacity pricing mechanisms during its power market reform. On January 30, 2026, the National Development and Reform Commission and the National Energy Administration issued the "Notice on Improving the Capacity Price Mechanism for the Generation Side," emphasizing the need to refine capacity pricing mechanisms for coal power, natural gas power, pumped storage, and new energy storage by category, optimize the power market mechanism, and promote peak power supply and new energy integration through institutional "base salary" arrangements. The new capacity pricing policy also clarifies principles for determining reliable capacity compensation standards for the first time, potentially evolving from "categorical compensation" to "equal pay for equal work," fostering fair competition among various flexible power sources. Furthermore, multiple provinces have taken the lead in issuing implementation policies: Inner Mongolia and Xinjiang provide compensation based on discharged energy, which struggles to dynamically reflect capacity supply and demand; Hebei's compensation lacks a set standard and is essentially a fixed payment; Gansu, Qinghai, and Ningxia uniformly use the formula "Effective Capacity × Capacity Price × Capacity Supply-Demand Coefficient" for calculating capacity fees, but differ in the valuation and calculation of key parameters.

Impact Analysis: New Storage Economics Improve, Thermal Power Profits Stabilize, Pumped Storage Upgrades Steadily. New Energy Storage: Following the establishment of the national capacity pricing policy framework, provincial capacity pricing policies are expected to be rolled out gradually. As capacity revenue becomes a significant component of storage income, the certainty of storage returns will increase, and economic viability is expected to improve. The principle of reliability compensation is likely to boost demand for long-duration energy storage. Coal Power: The revenue model is shifting towards an asset-based approach, with thermal power's per-kilowatt-hour capacity revenue potentially increasing marginally by 1.3 fen. The rise in capacity prices may reduce the expected energy price for coal power, leading to lower clearing prices in the energy market. Pumped Storage: A grandfathering approach protects the returns of existing units, while the new mechanism pressures new units to control commissioning costs.

Risk Warnings: Spot market price spreads may decline more than expected; changes in capacity prices may exceed expectations; energy storage costs may rise more than anticipated.