Here is the accurate, formal English translation of the entire policy text, suitable for official/industry use:

From Polestar Energy Storage Network:

The Development and Reform Commission of Shandong Province and other relevant authorities jointly issued the Notice on Effectively Advancing the Provincial Power Market Construction in the Second Quarter of 2026.

The document clarifies that starting June 1, 2026, for distributed energy storage facilities not participating in the power market, their on-grid electricity shall be temporarily settled at the arithmetic average real‑time market price at the generation‑side node of the municipal administrative region where the entity is located (16 prefecture‑level cities in the province). Such facilities shall bear relevant market costs in accordance with power market rules.

Distributed energy storage is encouraged to participate in the power market by bidding volume and price either independently or in an aggregated manner. Equal charging volume in the same month when electricity is fed into the grid shall be exempt from transmission and distribution tariffs.

The mechanism for new-type business entities such as new energy storage and pumped storage to participate in the frequency regulation ancillary service market will be improved. The system will adjust frequency regulation capacity and rate requirements on an hourly basis and conduct time‑sharing clearing to further enhance flexibility in system operation.

Coal‑fired power enterprises that have completed flexibility retrofitting and installed electric boilers and molten salt thermal storage facilities may choose matching generating units on a daily basis to participate in the market jointly. During the operating day, their output forms a combined output with the selected matching units to receive and respond to power commands from the grid’s AGC system.

Regarding capacity compensation fees:

Capacity compensation fees corresponding to new energy regulated electricity shall be deducted from generation‑side market-oriented electricity and allocated according to the proportion of monthly market‑available capacity on the generation side. Capacity compensation fees collected for new energy regulated electricity shall be refunded to all industrial and commercial users through a new profit and loss account for cross‑subsidies in electricity prices.

Deviation costs from preferred generation exceeding the preferred purchase curve matching shall be shared by on‑grid electricity not participating in the energy market and all industrial and commercial users.

In addition, the document stipulates that the upper limit of bilateral negotiated transaction electricity signed by market entities is adjusted from no more than 40% to 50% of the lower limit of the medium‑ and long‑term contract ratio for the current month.

Retail price cap clauses will be improved. Non‑grid power supply entities such as commercial complexes, properties, and office buildings are supported to participate in power market transactions, and may check the “price cap clause” to protect the legitimate rights and interests of end‑users.

Retail users are encouraged to sign price‑linked packages. Retail packages linked to reference prices or spot market prices shall not be subject to deviation assessment clauses.

(Excerpted from Polestar Smart Grid)