The purpose of this plant is in fact not grid-level storage, but secondary functions as you mentioned, and it’s also meant to be a proof-of-concept. Per an article from CNESA’s English site when the plant’s construction began in June 2023:

This project represents China’s first grid-level flywheel energy storage frequency regulation power station and is a key project in Shanxi Province, serving as one of the initial pilot demonstration projects for “new energy + energy storage.” The station consists of 12 flywheel energy storage arrays composed of 120 flywheel energy storage units, which will be connected to the Shanxi power grid. The project will receive dispatch instructions from the grid and perform high-frequency charge and discharge operations, providing power ancillary services such as grid active power balance.