On October 17, 2025, Yunnan Energy Investment Group's main controlling listed subsidiary, Yunnan Energy Investment Co., Ltd. (Yunnan Energy Investment, 002053. SZ), announced that in order to actively implement the national and Yunnan Province's energy development strategy, meet the needs of power grid peak regulation and large-scale integration and consumption of new energy, promote the comprehensive development and utilization of retired salt cavern resources in Kunming salt mines, and improve the development ecology of the company's new energy industry, it is agreed that its wholly-owned subsidiary, Anning Cloud Energy Investment Energy Storage Technology Co., Ltd., will invest in the construction of the Kunming Anning 350MW/175MWh compressed air energy storage demonstration project. The total investment of the project is 1.87167 billion yuan, and the initial investment unit price is about 1.069 yuan/Wh.

Yunnan Energy Investment announced that the construction scale of the Kunming Anning 350MW compressed air energy storage demonstration project is 350MW/1750MWh. The main construction contents include air compression system, turbine power generation system, heat storage and exchange system, water supply system, booster station and other systems and equipment. A 350MW compression and power generation system is planned to be installed on the ground system, which will store 1750MWh of electrical energy in the salt cavern chambers of Well An1-4. The stability and reliability of the An1 An4 salt caverns selected for the project have been demonstrated to be feasible by the Wuhan Institute of Rock and Soil Mechanics, Chinese Academy of Sciences. The project plans to construct a 220kV substation, which will be connected to the Kunming 220kV Phuket substation via a single 220kV line. The final system connection plan will be subject to the grid approval plan. The project plans to adopt a non supplementary combustion compressed air energy storage process system, which belongs to the grid side energy storage facility. The charging time is 8 hours, the rated power generation time is 5 hours, and the annual utilization hours are not less than 1300 hours. The total construction period for the project and its supporting facilities is 18 months.  

The Yunnan Provincial Development and Reform Commission and the Provincial Energy Bureau released the "Implementation Plan for the Development of New Energy Storage in Yunnan Province (2024-2025)" in May 2024. This project is included in the first batch of new energy storage demonstration projects in the province and is the new energy storage project with the largest capacity and longest power generation hours on the list.  

The total investment of the project is 1871.67 million yuan, with capital calculated at 20% of the total investment, and the remaining funds raised through debt financing methods such as bank loans. The initial investment unit price is approximately 1.0695/Wh.

Compressed air energy storage, as a currently preferred new energy storage method, is used for synchronous rotating equipment to generate electricity. It is not a power electronic device, and its function can be similar to that of large thermal power plants. It can provide rotational inertia for the power grid, undertake power grid peak regulation and backup, primary frequency regulation, voltage regulation, system backup, black start and long-term peak shaving and valley filling, output tracking and other functions, improving the safe and stable operation of the power grid.  

As of now, in accordance with the principle of "first come, first try", many provinces in China have successively issued support documents for the development of new energy storage industries such as compressed air energy storage. However, except for the 60MW compressed air energy storage project in Jintan, Jiangsu, which has obtained the national "two-part" electricity pricing policy, the country and Yunnan Province have not yet issued relevant electricity pricing policies for compressed air energy storage power stations.  

The Development and Reform Commission and Energy Bureau of Yunnan Province have clearly stated that for new energy storage projects with compressed air energy storage technology, leasing services will be provided at three times their installed capacity, and will be implemented in accordance with national electricity pricing policies after they are introduced. Based on the time of use electricity pricing policy in Yunnan Province and the investment control objectives of this project, the internal rate of return on capital for this project is 5.5% (after tax), and the investment payback period is 17.91 years (after tax).  

Yunnan Energy Investment stated that this project plans to utilize the retired salt cavern of Kunming Salt Mine as a gas storage facility, realizing the reuse of idle resources without the need for new large-scale gas storage facilities. This will help protect the ecological environment, save land resources, and reduce construction costs; We can fully leverage the advantages of the company's "salt storage integration" and rely on the rigid demand for raw brine required for the annual production of approximately 1.5 million tons of salt in Kunming Salt Mine. The saturated brine discharged during the gas injection and brine discharge process of the project does not require finding other brine consumption units, maximizing the reduction of gas injection and brine discharge time and ensuring the project reaches production and power generation on schedule.  

By June 2025, the total installed capacity of Yunnan Province is 161.8377 million kilowatts, including 11.5 million kilowatts of coal power, 76.4132 million kilowatts of hydropower, 17.0642 million kilowatts of wind power, 50.0426 million kilowatts of solar energy, 4.7501 million kilowatts of energy storage, and 2067.7 million kilowatts of others.Editor/Bian Wenjun