On March 18, Guangzhou Zhiguang Electric Co., Ltd. (Stock Code: 002169, hereinafter “Zhiguang Electric”) held its “15th Five-Year” Strategy Launch & National New Energy Storage Policy Forum at the Zhiguang Integrated Energy Industrial Park in Guangzhou.
At the forum, Fu Jinjian, General Manager of Guangzhou Zhiguang Energy Storage Technology Co., Ltd., delivered a keynote presentation titled “Guangdong Frequency Regulation Market: Policies and Practices—Zhiguang’s Exploration and Typical Cases.” Focusing on the current operating dynamics of Guangdong’s power ancillary services market, he provided an in-depth analysis of how cascaded high-voltage energy storage technology can unlock profitability for standalone energy storage power stations. Backed by advanced technology and real-world project cases, the presentation demonstrated the feasibility of the company’s energy storage strategy.
Fu noted that 2025 marks a critical phase in the deepening reform of Guangdong’s ancillary services market. As the core segment of power system regulation, the frequency regulation market has moved beyond the era of broad, inclusive incentives and entered a new phase defined by strict performance-based evaluation. Competition has shifted from simple deployment scale to comprehensive capabilities, including technical solutions, product performance, and operational excellence. As a result, a power station’s technical strength now directly determines its profitability and market viability.
Public data from full-year operations show that while standalone energy storage stations generated RMB 811 million in total revenue—making them the biggest winners in the frequency regulation market—returns have become highly polarized. The revenue gap between top-performing and underperforming stations has reached a 100x difference, forming a “top-tier profits, bottom-tier losses” structure. Many stations with subpar technical performance earn minimal returns or even incur losses, with some unable to participate in the market at all.
This divergence is fundamentally driven by market rules centered on the performance coefficient K, which includes three key indicators: Regulation speed (K1), Response time (K2) and Regulation accuracy (K3). These metrics directly determine a station’s competitiveness and serve as its lifeline in the market. Against this backdrop, cascaded high-voltage direct grid-connected energy storage technology has emerged as a “game changer” for improving K values and overcoming profitability challenges. Fu elaborated on its core value from three dimensions: technical principles, market alignment, and proven economic returns.
1. Technical Principles: Breakthroughs in High-Voltage Direct Connection and Precision Control
This technology replaces the traditional “l(fā)ow-voltage parallel + step-up transformer” architecture with a cascaded H-bridge topology. By stacking power units in series, it enables low-voltage battery systems to connect directly to the high-voltage grid without the need for transformers.
Combined with a “one-cluster-one-control” modular design, it eliminates circulating current losses between battery clusters at the source. Integrated with grid-forming control and virtual synchronous generator (VSG) technology, it delivers precise power control and rapid grid response.
As of the end of 2025, Zhiguang Energy Storage—an industry pioneer in cascaded high-voltage large-capacity storage—has achieved over 12 GWh of installed capacity in this segment, with a market share exceeding 70%. The company has delivered more than 20 projects at the 100 MW level, maintaining a leading position in technological maturity.
2. Market Alignment: Key Advantages in Guangdong’s Frequency Regulation Market
With tightened market rules in 2025, the revenue formula for frequency regulation is clearly defined as: Revenue = Declared Capacity × Regulation Mileage × Unit Price × Performance Coefficient (K). Under this framework, cascaded high-voltage technology demonstrates clear advantages: 1. Millisecond-level response, significantly outperforming conventional systems and securing top-tier K rankings. 2. High round-trip efficiency (>92%), enabled by transformer-free architecture, improving efficiency by 3%–10% and reducing energy losses and O&M costs 3. Ultra-precise power control (±0.01%), avoiding penalties and ensuring full revenue realization. 4. Enhanced safety and reliability, with DC-side decoupling design to mitigate battery degradation and enable precise fault isolation. For example, the Qingyuan Qingcheng energy storage station achieved over RMB 1 million in additional annual revenue from efficiency improvements alone.
3. Technical Adaptability: Enabling Diversified Revenue Streams
As Guangdong’s first GWh-scale standalone energy storage project, the Qingyuan Qingcheng station serves as a benchmark case. Leveraging this technology, it has consistently ranked among the top performers in market profitability, validating the direct link between technical performance and economic returns.
Fu emphasized that this technology is not limited to frequency regulation. It can also support peak shaving, spot market trading, and grid support services, enabling “one technology, multiple revenue streams.” This diversification effectively hedges against market price volatility and aligns with the development of a unified national power market.
4. Technology as the Moat: A New Era of Performance-Driven Competition
Fu concluded that Guangdong’s 2025 market dynamics clearly signal a new era in ancillary services: “technology determines survival, and performance determines returns.” The era of relying solely on scale expansion is over, and core technological competitiveness has become the key moat for standalone energy storage plants.
As China accelerates the development of a unified power market, ancillary service rules will continue to evolve, and technical thresholds will rise. With its mature system architecture, large-scale deployment track record, and superior performance, cascaded high-voltage energy storage is set to become the preferred solution for grid-side standalone and shared energy storage projects.
For standalone energy storage plants in Guangdong and across China, early adoption of this technology is essential to overcoming profitability disparities, capturing frequency regulation market opportunities, and adapting to the evolving power system—driving the industry’s transition from scale-driven expansion to high-quality, efficiency-oriented, technology-led growth.
