Development of Different Energy Storage Systems in the Xinjiang Uygur Autonomous Region: Problems and Solutions

China has begun a green revolution inside its power system to keep the net-zero commitment made to the world. To make a smooth transition, many provinces or autonomous regions in China are paving the ground for growing the economy of energy storage. The Xinjiang Uygur Autonomous Region (XUAR), the largest power producer in northwestern China, has witnessed a drastic shift in the source of power. The local government has made many efforts to accelerate the development of energy storage in the region and counteract the impact of high renewable penetration, but some of the existing policies are not robust enough to encourage the installation of energy storage facilities. The energy storage sector generally lacks incentives to participate in the electricity market due to unreasonable returns from the market trade. In this paper, the investment recovery time of a few energy storage projects with different technology and project size are compared. Long capital recovery time and inadequate profits jointly cause low incentives for investing in energy storage projects. We recommend revisions of current policies with a specific goal to enhance the profitability of energy storage projects, through either lifting the price restraint or granting access to frequency regulation services.