China’s energy storage industry has experienced explosive growth in recent years, driven by rapid developments in technology and increased demand, solidifying its position as a leader in terms of both capacity and innovation, said industry experts. China now holds a commanding 38% share of the global energy storage market, fueled by a surge in new capacity and groundbreaking technological progress, said the China Energy Storage Alliance (CNESA). This growth, driven by China’s swift expansion in battery storage and other energy solutions, cements its role as a leader in the sector, said Li Chenfei, Senior Manager of CNESA. China’s energy storage sector has seen unprecedented growth, with the operational capacity of new energy storage systems surging to 34.5 gigawatt (GW), marking an annual growth rate of 166% year-on-year. China has added 21.5 GW of storage capacity so far this year, which is three times the amount added during the same period in 2022, accounting for 47% of the global increase. China’s momentum in energy storage reflects a blend of strategic policy support, technological innovation and strong industry partnerships, said Li.
“The government has made clear commitments to renewable energy and carbon neutrality, setting ambitious targets that accelerate demand for advanced storage solutions. These policies are supported by substantial incentives, allowing companies to scale their operations rapidly. With established supply chains and a focus on cost-cutting, Chinese companies are able to produce energy storage technologies – especially lithium-ion batteries – at a scale and price point that’s tough to match globally,” Li said. Advancements in compressed air energy storage have enabled domestic production of essential equipment, bringing system costs down, while other emerging storage technologies remain in the early stages of industrialization and are not yet economically competitive, he said. Li added that China’s dominance in energy storage technology, particularly in battery cell production, places it in a leading position to shape global storage standards.
At the end of the first half, power storage capacity in China surpassed 100 GW, reaching 103.3 GW, a 47% year-on-year increase. New energy storage systems now account for nearly 50% of the total, with lithium battery storage maintaining a dominant position in this sector, said Li. According to the New Energy Department of the State Grid Energy Research Institute, while lithium-ion batteries are currently dominating, accounting for 98.2% of electrochemical storage capacity, China is gradually incorporating various long-duration technologies into its energy landscape. The country’s storage sector is diversifying beyond lithium-dominant technologies, with recent deployments including projects utilizing flywheel and supercapacitor technologies, a compressed-air facility with a capacity of 300 megawatt, and advanced lithium-ion and lead-carbon hybrid setups.
The global new energy storage market has also been expanding rapidly in recent years, with a 99.6% year-on-year growth and 91.3 GW in cumulative installed capacity in 2023, according to the Alliance. This surge of new energy storage capacity is largely attributable to China’s aggressive expansion in renewable energy infrastructure, particularly large-scale wind and photovoltaic power bases, said Hu Jing, Director of the Distributed Energy and Energy Storage Research Office of the State Grid Energy Research Institute, commenting on the recently released Analysis Report on the Development of New Energy Storage 2024.
Looking forward, industry experts expect China’s cumulative new energy storage capacity could reach between 221 GW and 300 GW by 2030, driven by sustained demand for integrated storage solutions and China’s expanding renewable energy portfolio. According to the report, China’s energy storage sector has maintained a rapid growth momentum from 2023, with new energy storage capacity expanding from 8.7 million kilowatts in 2022 to 31.39 million kW last year. On the other hand, new energy storage plants in China are increasingly shifting toward centralized, large-scale installations, it said.
State Grid Corp of China currently has 36.80 million kW or 77.56 million kilowatt-hours of new energy storage, with 95% of this capacity becoming operational over the past three years. In the first half, new energy storage systems achieved an average usage of 459 hours and approximately 109 equivalent charge-discharge cycles, marking increases of about 44% and 37%, respectively, compared to the same period in 2023. The role of new energy storage in grid regulation has also strengthened significantly. The maximum short-term peak capacity exceeded 30 million kW, underscoring the importance of new energy storage in ensuring power supply and supporting renewable energy integration, the China Daily reports.
