How to Read China's Electricity Market Ancillary Service Fees: the Four Named Products and Their Fee Elements (Peak Regulation From Clearing Price With Awarded and Actual Output or Start-Stop Count; Frequency Regulation From Clearing Price × Mileage × Performance Coefficient, With the Coefficient in Principle Capped at 2 and the Mileage Price at 0.015 Yuan/kW; Reserve and Ramping From Awarded Capacity, Time and Price), Who Pays (In Principle No Pass-Through to Users Without a Continuously Running Spot Market; With One, Qualifying Frequency-Regulation and Reserve Fees Shared Between User Consumption and Non-Market Grid-Fed Energy in a Provincially Set Ratio; Independent Storage and VPPs Allocated on Grid-Fed or Grid-Drawn Energy), the Peak-Regulation Price Cap (In Principle the Local Grid-Parity New-Energy Tariff) and the Bill Rules (Balanced Budget, Each Product Listed Separately, Never Bundled; 'Daily Clearing, Monthly Settlement' Where Spot Runs Continuously) — With the Southern Region's 2025 Storage Rules as a Worked Regional Example

Short answer. An ancillary service fee line on a Chinese settlement statement comes from one of the products the 2025 basic rules name — 'peak regulation, frequency regulation, reserve, ramping and so on' (the list is open-ended) — procured centrally by the dispatch organisation, computed from the elements the rules fix per product, with national ceilings that apply 'in principle': for frequency regulation a performance coefficient of at most 2 and a mileage clearing price of at most 0.015 yuan per kW, for peak regulation the local grid-parity new-energy tariff. Who pays depends on whether the province's spot market runs continuously: if not, in principle nothing is passed to users; if so, qualifying frequency-regulation and reserve fees are shared between user consumption and grid-fed energy that stayed out of the energy market, in a ratio the provincial price authority sets. Independent storage and virtual power plants are allocated on the energy they fed to or drew from the grid in the settlement period. The statement must balance, list each product separately and never bundle it with other charges. This guide reads those rules in order, then shows how one regional rule — the Southern region's 2025 storage rules — sets concrete payments and assessments for independent storage.

1. What is being charged for

The 2021 management measures, which the 2025 rules sit beside rather than replace, draw the older distinction: basic ancillary services are an uncompensated obligation of every grid-connected entity, while compensated services are paid either by fixed compensation or through market means (centralised bidding, tender/listing/auction, bilateral negotiation). Their active-power list is longer than the 2025 market list — frequency regulation, peak regulation, reserve, rotational inertia and ramping.

CNWattHub reading: a fee line therefore has two possible legal bases. If it comes from a market product (the 2025 rules name four 'mainly', with '等' leaving the list open), the 2025 fee elements and in-principle caps apply; if it comes from a fixed-compensation product still governed by a regional implementing rule (the 2021 measures' "两个细则" track), the 'compensate cost, reasonable return' standard applies instead. The measures also forbid assessing twice: a service fully realised through the market may not be assessed again in the implementing rules. Which track a given line belongs to is the first thing to establish.

2. The fee elements per product

The 2025 basic rules name the elements from which each fee is computed — they do not write out an equation:

Products that do not yet have market conditions have their price mechanism set separately.

The 2024 price-mechanism notice supplies the in-principle caps and the price structure these elements run under:

• Frequency regulation. In principle a single-part, mileage-based price. Units bid time-of-day regulation capacity and price; the fee is clearing price × mileage × performance coefficient. The coefficient is the product or weighted average of three sub-parameters — regulation rate, regulation accuracy and response time — each scaled against the design parameters of the best-performing local coal unit (thermal–storage hybrids excluded). In principle the coefficient may not exceed 2 and the mileage clearing price may not exceed 0.015 yuan per kW.
• Peak regulation. Localities set the cap so that a new-energy project's integration cost does not exceed its generation value; 'in principle' it is not higher than the local grid-parity new-energy on-grid tariff.
• Where spot runs continuously, peak-regulation-like markets (peak regulation, peaking, peak-regulation capacity) are not to operate at all — the function moves into the spot market by relaxing its price limits; where spot does not run continuously, wind and PV are in principle not peak-regulation providers; regional peak-regulation and energy-exchanging regional reserve trades must be converted into energy trades.
• Capacity-paid units must bid in the ancillary market.

CNWattHub arithmetic (on the tagged caps): the frequency-regulation fee for a unit is bounded above by 2 × 0.015 = 0.03 yuan per kW of mileage; a 100 MW storage station clearing 1,000 MW of mileage in a day at both caps would earn 1,000,000 kW × 0.03 = 30,000 yuan for that day. That is an upper bound from the national in-principle caps, not a market outcome — real coefficients and clearing prices are regional parameters, and the notice says 'in principle'.

3. Who pays

Both the 2024 notice and the 2025 rules build the pass-through on the 'beneficiary pays' principle and hinge it on one fact: whether the provincial spot market is in continuous operation.

The 2021 measures' allocation logic, as NEA's press office explained it, is the older layer underneath: services for the whole system are shared by all grid-connected entities — generators and market users — with non-market users to be brought in gradually; services for a specific generator or user are paid by that generator or user.

CNWattHub reading: in a province whose spot market runs continuously, a wind or solar plant's share of the qualifying frequency-regulation and reserve fees is in principle allocated on the 'grid-fed energy that did not take part in the energy market' leg, so the output it sells through the energy market is not in that base — while an independent storage station's share is a function of how much it charged and discharged in each settlement period. That is a reading of the allocation rules for those fees only; the ratios are provincial and other fees need separate approval.

4. What the bill must look like

• Settlement is on a balanced-budget principle: what is collected equals what is paid out.
• Each product's fees are shown as a separate line on the electricity settlement statement and may not be bundled with other charges. The 2025 metering-and-settlement rules say the same for every settlement item — calculated and listed separately, in an item format set by the State Council price authority — and name ancillary service settlement among the settlement types, beside energy and capacity settlement ('等', so the list is not closed).
• User-borne fees are booked into system operation costs and settled with the electricity bill; where spot runs continuously the mode is 'daily clearing, monthly settlement'; compensation, allocation and assessment fees per product are each calculated and listed separately.
• The flow of numbers: the dispatch organisation records calls and performance and computes compensation and allocation; it pushes the result to the trading organisation, which combines it with other trading fees into the settlement basis, publishes it to participants and forwards it to the grid company; the grid company meters and collects or pays.

CNWattHub checklist for reading a statement: (1) each product on its own line, with compensation, allocation and assessment separated; (2) no energy produced while providing a service inside an ancillary line; (3) if the province has no continuously running spot market, in principle no user-side ancillary allocation; (4) an allocation base that matches the entity type — consumption, non-market grid-fed energy, or, for storage and VPPs, grid-fed or grid-drawn energy.

5. A regional example: the Southern region's 2025 storage rules

National rules set fee elements and in-principle caps; regional 'two rules' (两个细则) set parameters for the products still compensated under them. The Southern regulatory bureau's revised 2025 rules for independent electrochemical storage show one such set:

CNWattHub reading: the regional rules pay AGC in two lines — one for capacity held available in any AGC mode, one for energy actually moved in frequency-regulation mode — a structure of their own, not a rearrangement of the national mileage-based price, and one that applies only while the product is not traded in a market: once a station takes part in an ancillary-service market, the rules stop compensating that product. The R-values are regional parameters this guide does not reproduce. The explicit exclusion of independent storage from allocation 'at the current stage' is the regional counterpart of the national storage clause — a reader should expect that exclusion to be revisited rather than permanent, but the text says only '现阶段'. The assessments are denominated in hours of installed capacity, not yuan, so their monetary value depends on a price elsewhere in the regional rules; the AVC assessment has an explicit ceiling of installed capacity × 0.2 h.

6. A reading sequence

1. Which track? Market product under the 2025 rules, or fixed-compensation product under a 2021-track implementing rule.
2. Which product and formula? Match the line to 第三十七条 elements.
3. Within the in-principle caps? Frequency regulation: coefficient ≤2, mileage price ≤0.015 yuan/kW; peak regulation: not higher than the local grid-parity new-energy tariff; no peak-regulation-type market where spot runs continuously.
4. Who is allocated and on what base? Spot status, provincial ratio, entity type.
5. Is the statement formally correct? Separate lines, no bundling, balanced budget, energy excluded.
6. Regional parameters. Read the applicable 'two rules' for R-values, assessment hours, storage exclusions and the hand-over to market products.

Scope limits

This guide reads the 2025 national basic rules and NEA's press Q&A, the 2024 price-mechanism notice, the 2021 management measures and NEA's 2021 press Q&A, the 2025 metering-and-settlement basic rules and the Southern region's 2025 revised storage rules. It quotes no provincial ancillary-market implementing rule with its clearing data or price caps, no actual settlement statement, no national total of ancillary fees or their share of the bill, and no spot-market joint-clearing example; the Southern region's R1/R2/R3 values are not reproduced. Not legal, trading or investment advice.