Breaking News! Starting in 2026, European energy storage systems with a capacity of 1MW or more may be required to have grid connection capabilities!
In September 2025, the European Transmission System Operators Network (ENTSO-E) released its second-phase technical report on grid connection systems. The report indicates that new energy storage systems and renewable energy power plants with a rated capacity exceeding 1MW will be required to provide grid connection capabilities to stabilize the power grid, and provides specific technical definitions.
This "second-phase report" is a step in the EU grid regulation development process. While not legally binding, it represents a crucial revision to the upcoming Specification for Requirements for Generating Systems Networks (NC RfG 2.0).
Once the European Commission adopts this provision when finalizing NC RfG 2.0, ENTSO-E will issue subsequent implementation guidance documents (IGDs) for national regulators and grid operators to implement.
According to documents from the European Distribution System Operators Entity (EU DSO Entity), NC RfG 2.0 is expected to be finalized in 2026. After the requirements take effect in EU member states, member states can set a transition period based on their local power grid conditions, typically around three years.
This means that most energy storage projects are expected to fully implement grid-connectivity requirements starting in 2028-2029.
For energy storage developers, it is crucial to plan ahead and upgrade energy storage control systems, grid-connected PCS, and testing solutions to avoid being caught off guard!
What is "Grid Connection"?
To understand "grid connection," we need to first understand "grid synchronization."
Conceptually, in a power system, grid synchronization typically refers to generator sets or equipment operating as synchronous generators, whose speed and phase must be synchronized with the power grid. In other words, these devices need to "follow" the frequency and phase of the grid to ensure stable power supply.
Grid connection, on the other hand, refers to the ability of generating equipment or systems to operate independently without external grid support, maintaining stable voltage and frequency to provide power to loads. Grid connection capability generally refers to equipment capable of "building and forming a grid," which can continue operating during grid failures or establish independent microgrids in remote areas.
In simple terms, the differences between the two can be summarized as follows:
• Grid-connected: The power generation equipment operates synchronously with the existing power grid.
• Grid-connected: The power generation equipment can independently form a power grid to supply power to loads.
In recent years, with the acceleration of global energy transition, power systems in various countries are experiencing the "double high" challenge—a high proportion of new energy grid integration and a high proportion of power electronic equipment access. The voltage and frequency stability of the power system faces severe challenges, system inertia is decreasing, oscillation risk is increasing, and the safe and stable operation of the power grid is seriously threatened.
Against this backdrop, grid-connected energy storage technology has emerged.
As a revolutionary energy storage technology, the core of grid-connected energy storage lies in its equipped PCS, which, like a traditional generator, can autonomously set voltage and frequency parameters to form a stable voltage source. It not only has energy storage functions but can also actively adjust during grid fluctuations, providing inertia support, suppressing oscillations, and even independently constructing microgrids.
Global demand has exploded, and major manufacturers are rushing in.
Research estimates suggest that from 2024 to 2034, the world will need to add 1400GW of battery energy storage capacity using grid-based energy storage technology to maintain grid stability; within the next five years, the global penetration rate of grid-based energy storage technology is expected to reach 20%.
According to publicly available industry data, the current global average penetration rate of grid-based energy storage is approximately 10%. Regionally, Australia has the highest penetration rate at approximately 23%, a high percentage attributed to Australia's aggressive energy transition goals (achieving 82% renewable energy generation by 2030) and unique grid structure requirements.
Objectively speaking, Australia's power grid is primarily based on a single backbone network, and the high penetration of distributed energy sources poses stability challenges. Grid-based technology has become a key means to address frequency regulation and voltage support. It is understood that Australia has also included grid-based energy storage in its national electricity market priority actions for fiscal year 2026.
In Europe and the United States, the penetration rates of grid-based energy storage are 8.6% and 2.6% respectively, and are expected to increase significantly in the coming years.
In China, the penetration rate of grid-based energy storage is currently only 1.5%. However, in recent years, with the rapid growth of new energy installed capacity, grid-based energy storage technology has taken center stage in the national new energy strategy!
On June 4, 2025, the National Energy Administration launched the first batch of pilot projects for new power systems, listing grid-based technology as the top priority among the seven key areas. The new policy further requires that the penetration rate of grid-based energy storage exceed 30% by 2027! New projects in regions with difficult power grid absorption, such as Northwest China and Xinjiang, must be equipped with grid-based capacity.
Meanwhile, local policies are also stepping up support. Major renewable energy provinces like Xinjiang and Inner Mongolia are directly providing 30% investment subsidies, while Tibet and Xinjiang have launched 1.2GW demonstration projects. Grid-based energy storage has been upgraded from an "optional configuration" to a "mandatory standard."
Driven by both policy and market demand, the domestic grid-based energy storage market has experienced explosive growth: According to data from the CESA Energy Storage Application Branch's industry database, from January to September 2025, China's newly installed grid-based energy storage capacity reached 2.9GW/9GWh, accounting for over 10% of the market. In terms of capacity, the new installed capacity in the first nine months of this year has already surpassed the total new installed capacity of 8.9GWh for the entire year of 2024.
As of the end of September 2025, the cumulative operational capacity of grid-based energy storage in China has reached 6GW/19.1GWh! Of particular note is that, in terms of application scenarios, grid-connected energy storage in China is rapidly extending from the power supply side and grid side to the user side and microgrids: from January to September 2025, there were a total of 6 new user-side projects in grid-connected energy storage projects, surpassing the power supply side.
Of course, focusing on the present, the widespread adoption of grid-based energy storage technology still faces objective challenges:
On the one hand, because grid-based energy storage technology requires upgrades to inverters, control systems, and software systems, its system cost is 8%-12% higher than that of ordinary energy storage; on the other hand, industry standards are not yet unified.
It is worth noting that the second-phase technical report released by ENTSO-E clearly defines the core indicators that grid-based energy storage systems need to meet. If adopted, it may serve as a reference for establishing industry standards for grid-based energy storage.
Regarding costs, the global average price of battery energy storage has decreased by 10% to 40% over the past year, which can offset this additional cost to some extent. At the same time, we can also expect the development of AI scheduling technology, which may help further reduce the cost of grid-based energy storage systems in the future!
