Accelerating energy storage deployment in China: incentive alignment and regional policy incentives

Multi-timescale energy storage is recognized as a crucial technology to facilitate large-scale renewable energy integration in low-carbon transitions. However, in deregulated electricity markets, a significant gap persists between the system value and the monetized value of energy storage systems, hindering economic viability, optimal resource allocation, and widespread deployment. To address this challenge, we propose a spatial-temporal framework that quantifies the system and monetized values of short-duration (SDES) and long-duration energy storage (LDES) across China's 31 provinces, identifying region-specific policy incentives. Our findings show significant regional heterogeneity: in eastern and southern China, short-duration storage achieves high monetization efficiency, capturing over 80 % of its system value, thus requiring minimal policy incentives. Conversely, northwestern regions (e.g., Xinjiang, Gansu) experience pronounced seasonal imbalances, resulting in a substantial monetization gap for LDES, exceeding 40 % of its system value in 2023. Although technological improvements and market evolution reduce this gap by 2030, targeted regional incentives and differentiated market mechanisms remain essential to bridge remaining gaps. These results underline the necessity of differentiated regional policies to effectively bridge monetization gaps, optimize storage deployment, and enhance the economic feasibility of energy storage, providing critical guidance for China's ongoing low-carbon energy transition.