Legal Risks and Prevention of Generation-Grid-Load-Storage Integration in Mining Enterprises [New Energy Summit]

At the 2025 (10th) New Energy Industry Expo - New Energy PV ESS Forum hosted by SMM Information & Technology Co., Ltd. (SMM), Ma Yuqi, Senior Partner and Head of the Mining Energy M&A and Restructuring Department at Beijing Yuren Law Firm, shared insights on the topic "Legal Risks and Prevention of the Application of Generation-Grid-Load-Storage Integration in Mining Enterprises." She stated that the integration of generation-grid-load-storage is an essential path for the green transformation of mines, as it can optimize energy utilization, reduce energy consumption, minimize environmental impact, and drive mining enterprises toward sustainable development. During the implementation of generation-grid-load-storage integration projects, the principle of compliance-first must always be upheld. It is crucial to fully recognize the existence of legal risks, take effective preventive measures, and ensure the legal and compliant operation of the projects. Risk prevention and compliance operations will help achieve a win-win situation for both new energy enterprises and mining enterprises.

The Significance of Generation-Grid-Load-Storage Integration in Miner Applications

The Significance for New Energy Enterprises

Business Expansion: The competition in the new energy industry is intensifying, and companies need to continuously expand their business areas to seek new development opportunities. The application of generation-grid-load-storage integration in mining enterprises provides new business directions for new energy companies, helping them to expand market share and enhance competitiveness.

Cost Reduction: Some new energy enterprises need to procure raw materials from mining companies. By applying the integrated generation-grid-load-storage system, new energy enterprises can establish closer cooperation with mining companies, optimize resource allocation, and thereby reduce raw material procurement costs.

The Significance for Mining Enterprises

Green Transformation: Mining enterprises are typically characterized by remote locations, high energy consumption, and environmental sensitivity, facing significant environmental protection pressures. The application of generation-grid-load-storage integration can help mining enterprises optimize energy utilization, reduce energy consumption, minimize environmental impact, and drive the transition towards green transformation.

Compliant Development: The mining industry is subject to stringent regulations, and compliance, environmental protection, and safety are crucial prerequisites for enterprise development. The integrated generation-grid-load-storage project aligns with the industry's regulatory direction, aiding mining enterprises in meeting relevant legal requirements and achieving compliant development.

Legal Risk Prevention and Control: Mutual Assistance in a Two-Way Journey

Core Value: The core value of applying the integrated generation-grid-load-storage system in mining enterprises lies in achieving energy optimization, cost reduction, efficiency improvement, and low-carbon development. By rationally allocating energy resources, enhancing energy utilization efficiency, reducing enterprise operating costs, and simultaneously decreasing carbon emissions, it aligns with the requirements of sustainable development.

Compliance Support: Analyzing the legal risks of applying the generation-grid-load-storage integrated project in mining enterprises and proposing corresponding preventive strategies can provide compliance support for the project's implementation, ensuring the smooth cooperation between new energy enterprises and mining enterprises.

Case Studies of Generation-Grid-Load-Storage Integration in Miners

Overview of the Tibet Mining Project

Project Composition: The integrated generation-grid-load-storage comprehensive energy station project, supporting the Zhabuye Salt Lake lithium mine by Tibet Mining, is a comprehensive thermoelectric energy system consisting of power supply (solar thermal + PV), load (electricity, steam), ESS (thermal storage + electrochemical energy storage), power transformation and distribution, and control systems.

System Capacity: The project includes a 40MW solar thermal system, a 35MW PV system (AC side), and a 20MW / 40MWh electrochemical energy storage system, providing strong energy supply and storage capabilities.

Progress of the Tibet Mining Project

Construction commenced in 2023: The project started construction in March 2023;

Power generation began in 2025: In March 2025, the project began generating electricity;

Energy supply: Upon completion, the project will supply 258 million kWh of electricity annually to the second-phase lithium carbonate processing plant of Tibet Mining, and provide 264,000 mt of steam annually, ensuring stable energy supply for the company's production.

Legal Risk Analysis in Miner Applications

Project Compliance and Implementation Risks

1. Project Approval/Filing

The implementation of generation-grid-load-storage integrated projects in mining enterprises requires strict project approval or filing procedures. If the project fails to obtain approval or filing from relevant departments during the project initiation stage, the project cannot proceed.

2. Environmental Impact Assessment

Obtaining environmental impact assessment (EIA) procedures for mining enterprises is inherently challenging. Generation-grid-load-storage integrated projects may have certain impacts on the surrounding environment of the mine. Ensuring smooth passage through the EIA is also a crucial part of project implementation.

3. Project Land Pre-approval

Project site selection and land pre-approval are among the prerequisites for project implementation. Mining enterprises themselves face tight land use quotas, and generation-grid-load-storage projects require a large amount of land. Ensuring that the project land complies with relevant planning and requirements, passing land pre-approval, and obtaining legal land use rights all involve uncertainties.

Contract Performance Risk

Mining and Beneficiation Project Asynchrony: The progress of mining and beneficiation projects by miners may not align with the integrated generation-grid-load-storage projects. If the mining and beneficiation projects lag behind, it could lead to reduced energy demand, affecting the economic benefits of the projects. Conversely, if the mining and beneficiation projects progress too quickly, it may result in insufficient energy supply, impacting the normal production of the enterprise.

Delayed Electricity Bill Settlement: Untimely payment of electricity bills is one of the common risks during contract performance. Miners may fail to pay electricity bills on time due to difficulties in capital turnover, which will affect the energy suppliers' capital recovery and may even lead to the breakdown of the cooperative relationship between the two parties.

Production Cuts and Shutdowns by Miners: Production cuts or shutdowns by miners may lead to a significant drop in energy demand, putting the operation of integrated generation-grid-load-storage projects in a difficult position. At the same time, production cuts and shutdowns by miners may also trigger a series of contract disputes, such as the assumption of liability for breach of contract.

Policy and Its Change Risks

Inconsistent Policies: The standards for energy storage configuration ratios and consumption requirements vary across regions, introducing significant uncertainty to the implementation of generation-grid-load-storage integrated projects. For instance, Henan requires distributed new energy to engage in "behind-the-meter electricity sales," but the pricing mechanism for grid access fees remains unclear, which will impact the project's economic viability and feasibility.

Unclear Responsibilities: Many regions stipulate that the power supply, power grid, load, and energy storage must be controlled by the same investment entity. However, some projects face unclear responsibilities due to multi-party cooperation, leading to failure in project acceptance. This will result in the inability to operate the project normally and increase the legal risks of the project.

Security Review: Projects involving sensitive industries (such as energy service stations) require additional security reviews for foreign equity participation, which may delay project implementation, increase time costs, and introduce uncertainty.

Policy Changes: Policy changes are one of the significant risks faced by generation-grid-load-storage integrated projects. The government may adjust relevant policies based on macroeconomic conditions and energy policies, which could adversely affect the operation and revenue of the projects.

Balancing Stakeholder Risks

1. Local Government Departments: Local government departments play a crucial regulatory and guiding role in generation-grid-load-storage integration projects. Projects must comply with relevant local government policies and requirements, or they may face risks such as approval difficulties and penalties. Additionally, poor communication and coordination with local government departments can hinder project progress.

2. Local Collective Economic Organizations: Local collective economic organizations may have certain interests in the construction and operation of projects, such as employment opportunities and local donations. If the project fails to meet the reasonable demands of these organizations, it may lead to opposition and resistance, affecting the smooth implementation of the project.

3. Villager Demands: Villagers in the project area may be concerned about the impact of the project on their living environment and land rights. If the villagers' demands are not reasonably addressed, it could trigger mass incidents, posing serious legal risks and social impacts to the project.

Legal Risk Prevention Strategies

Comprehensive Due Diligence in the Early Stage

Mining Company Verification: Conduct a comprehensive verification of mining companies, focusing on the compliance of mining rights and mining and beneficiation projects, as well as the asset and liability status of the miners. Understanding the legal and financial status of mining companies helps assess the risk level of the project and provides a basis for subsequent cooperation.

Project Implementation Conditions Verification: Verify the implementation conditions of generation-grid-load-storage projects, focusing on local integrated generation-grid-load-storage policies, project land use, environmental impact assessment, and safety supervision. Ensure that the project complies with local policy requirements and legal regulations, avoiding legal risks due to insufficient early-stage preparation.

Risk Sharing in Transaction Contract Design

Clear Terms: Clearly define technical standards and responsibility sharing in the transaction contract to ensure that the rights and obligations of both parties are clear and unambiguous. This can avoid disputes during the contract performance process and reduce legal risks.

Revenue Compensation: Considering the occurrence of special circumstances such as miner shutdowns, include a revenue compensation mechanism in the contract. When special circumstances affect project revenue, the legitimate rights and interests of investors can be protected, reducing investment risk.

Investment Exit Arrangement: Clearly define the investment exit arrangement during the operation period in the contract, providing investors with a flexible exit mechanism. When unforeseen risks arise or investors have other needs, they can exit the project smoothly, minimizing losses.

Dynamic Compliance Supervision in Later Stage Operation

Compliance Supervision System: Establish a compliance supervision system, conduct regular compliance reviews of the project, and develop emergency plans. Identify and resolve compliance issues in the project operation process in a timely manner, ensuring the legal and compliant operation of the project.

Policy Dynamics Tracking: Closely monitor policy dynamics, promptly understand the impact of policy changes on the project, and take flexible response measures. Adjust the project's operation strategy according to policy changes to reduce policy risk.

Balancing Interest Demands: During the project operation process, balance the interest demands of relevant parties, actively communicate and coordinate with local government departments, local economic organizations, and villagers. Strive for the support and cooperation of all parties, creating a favorable external environment for the smooth operation of the project.

Conclusion

Summary and Outlook

The Inevitable Path: The integration of generation-grid-load-storage is the inevitable path for the green transformation of mines. It can optimize energy utilization, reduce energy consumption, minimize environmental impact, and drive mining enterprises toward sustainable development.

Compliance First: During the implementation of generation-grid-load-storage integration projects, the principle of compliance first must always be upheld. Fully recognize the existence of legal risks, take effective preventive measures, and ensure the legal and compliant operation of the projects.

Win-Win Goal: Risk prevention and control, along with compliant operation, will help achieve a win-win situation for new energy enterprises and mining enterprises.