Industrial and Commercial Energy Storage Reaches a Significant Turning Point!

Recently, the Sichuan Provincial Development and Reform Commission released a notice titled “Notice on Further Improving the Price Mechanism for New Energy Storage” (Chuan Fa Gai Price [2025] No. 14), which clarifies that for user-side energy storage projects that are operational by the end of 2026, the newly added demand capacity electricity charges will be coordinated at the provincial level within two years. This opens new opportunities for industrial and commercial energy storage.

The demand capacity electricity charge refers to the fixed fee that users pay based on transformer capacity or maximum demand, accounting for 15%-30% of the electricity costs for industrial and commercial users. For investors and project owners, the issue of insufficient transformer capacity has long hindered the realization of energy storage projects. Additionally, the cost structure of user-side energy storage has made it challenging for enterprises to bear the demand capacity electricity fees associated with equipment upgrades.

The new regulations in Sichuan specifically target industrial and commercial energy storage. According to the new rules, for user-side energy storage projects that start operations by December 31, 2026, the demand capacity electricity fees incurred in the two years following operation will be exempted across the province. This makes Sichuan the first province to clearly state a reduction in user-side energy storage capacity fees, with unprecedented support (full exemption for two years). During this period, companies will not need to pay extra for capacity increases in energy storage devices, effectively providing them with a two-year “electricity fee holiday.” For instance, a 1MW/2MWh user-side energy storage station could save approximately 600,000 to 1 million yuan by being exempt from demand capacity electricity fees for two years, reducing project costs by at least 20%.

The specific rules of the new regulations include:

• Capacity Electricity Pricing: Determined based on the newly added capacity of dedicated transformers for energy storage devices;
• Demand Electricity Pricing: Based on the maximum demand load during the month of energy storage charging, with average values taken from adjacent periods if no data is available;
• Charging Side: When charging independently, the energy storage system acts as a power user participating in market transactions without incurring transmission and distribution charges and additional fees, thereby further lowering electricity costs;
• Discharging Side: Before the operation of the spot market, discharge prices will refer to the coal power contract price and be linked with time-of-use electricity prices, significantly increasing earnings during peak periods.

In fact, the policy introduced by Sichuan is not an isolated innovation. As early as 2024, Sichuan issued the “Notice on Promoting the Active and Healthy Development of New Energy Storage”, which simplified the grid connection process for energy storage projects. At the beginning of 2025, the city of Zigong in Sichuan implemented a policy exempting capacity electricity fees for commercial centralized charging facilities until the end of 2030, successfully promoting the establishment of multiple demonstration projects by businesses such as China Petroleum Sichuan Zigong Sales Company.

This pricing mechanism innovation provides full-chain support for energy storage projects from “construction to grid connection to revenue.” Notably, the Sichuan regulations emphasize “user-side energy storage,” targeting high-energy consumption scenarios such as data centers and commercial parks. This focus stems from Sichuan being a major clean energy province, where hydropower accounts for over 80% of energy production but faces seasonal challenges of water waste during wet seasons and electricity shortages during dry seasons.

As the collaborative projects between Sichuan and Chongqing accelerate and renewable energy installations surge, grid peak shaving pressures have increased sharply. Thus, Sichuan’s new regulations are not just a standalone measure but are aligned with the province’s energy structure and existing policies.

The essence of Sichuan’s new regulations is to reconstruct the economic model of industrial and commercial energy storage through a dual-drive mode of “lowering initial investment + expanding profit channels.” This approach aims to invigorate social capital’s participation in energy storage. If this policy achieves notable success in Sichuan, it could accelerate the implementation of local energy storage projects and inspire similar actions in other provinces, potentially offering a “Sichuan solution” to the nationwide challenge of scaling industrial and commercial energy storage.

It is important to note that while the Sichuan regulations clearly stipulate a two-year exemption period, how the demand capacity electricity fees will be distributed after that remains unspecified. Industry insiders point out that if users are required to bear these costs after two years, it could lead to a “policy cliff effect.” In response, officials from the Sichuan Provincial Development and Reform Commission have indicated that they will explore a “dynamic adjustment + market-based distribution” mechanism to ensure a smooth transition.

Adjustments in Time-of-Use Electricity Prices Across Multiple Provinces

According to the CESA Energy Storage Application Branch’s industry database, in 2024, the national user-side energy storage capacity added 2.67GW/6.35GWh, with a capacity share of 5.79%, mainly concentrated in provinces such as Jiangsu, Zhejiang, and Guangdong. The East China region accounted for 1.45GW/3.47GWh of newly added user-side capacity, exceeding half of the national total.

Single-configured industrial and commercial energy storage projects accounted for about 80% of user-side capacity, while projects incorporating energy storage with photovoltaic systems, distributed photovoltaic systems, and microgrids made up around 20%.

For user-side energy storage stations, time-of-use electricity prices are a primary determinant of revenue. In 2024, provinces including Zhejiang, Anhui, Hubei, Jiangsu, Henan, Gansu, Heilongjiang, Shandong, and Yunnan adjusted their time-of-use electricity pricing policies, with average peak-valley price differences exceeding 0.7 yuan/kWh in over 40% of provinces nationwide. Currently, 28 provinces can implement two charges and two releases.

With various regions setting low valley/deep valley periods and establishing seasonal electricity prices, most areas have implemented peak/deep valley pricing in winter and summer. Compared to 2023, while overall peak-valley price differences have decreased in 2024, the rapid decline in energy storage system costs has positively impacted user-side industrial and commercial energy storage revenues.

In the Guangdong Pearl River Delta region, the peak-valley price difference has long ranked first in China (reaching 1.2843 yuan/kWh in March 2025), and time-of-use electricity pricing features double peaks (10 AM to 12 PM and 2 PM to 7 PM), supporting the “valley charge – peak discharge – flat charge – peak discharge” strategy. For a 1MWh project, the internal rate of return (IRR) can reach 15%, with a payback period of about 5.4 years. Although Zhejiang’s peak pricing cancellation has led to a more than 20% reduction in price differences, optimizing charging and discharging strategies (such as charging during low photovoltaic prices) can still maintain profitability.

In Shanghai, the high load density and pricing mechanisms have made it a hotspot for energy storage investments in East China. In southwestern and central provinces, places like Guizhou and Hunan are seeing their peak-valley price differences exceed 1 yuan/kWh due to growing industrial electricity demand and supportive policies, attracting energy storage projects. However, the stability of local industrial loads will significantly impact actual revenues.

In addition, Hainan, as a pilot for island microgrids, sees energy storage demand stemming from the need for stable electricity supply; while Tibet relies on photovoltaic-supported energy storage to address curtailment issues, where price arbitrage is not the core revenue source.

Data Center Energy Storage to Explode

Since 2024, the rapid development of artificial intelligence has surpassed most people’s expectations, with AI assistants increasingly infiltrating daily life and AI models penetrating various industries including autonomous driving, intelligent manufacturing, healthcare, finance, and energy. This rapid evolution has driven significant growth in global computing power demand and data center projects.

According to the China Academy of Information and Communications Technology, it is predicted that under three different scenarios, by 2030, electricity consumption by data centers will exceed 700 billion, 400 billion, and 300 billion kWh. From 2023 to 2030, the share of data centers in total social electricity consumption is expected to rise from 1.6% to around 5%.

On February 10, 2025, the Ministry of Industry and Information Technology and eight other departments issued the “Action Plan for the High-Quality Development of New Energy Storage Manufacturing”, which mentions expanding the diverse applications of user-side energy storage targeting data centers, intelligent computing centers, communication bases, industrial parks, commercial enterprises, and highway service areas—users that demand high reliability and quality of power supply.

As the demand for AI computing power escalates, more and more data center energy storage orders and bidding projects are emerging. According to the CESA Energy Storage Application Branch’s industry database, since 2024, over 1.8GWh of data center/intelligent computing center energy storage projects have updated their dynamics, including registrations, grid connections, bidding, and winning projects, with total investments exceeding 7 billion yuan (some projects include data center and photovoltaic investments), spread across 14 provinces and regions including Henan, Guangdong, Guangxi, Hubei, Qinghai, and Inner Mongolia.

In April 2024, Cloud Storage New Energy Technology Co., Ltd. won a bid for the “National Integrated Computing Network” and the Linhe Data Center Cluster’s green energy supply demonstration project, which involves a 64.8MW/259.2MWh lithium iron phosphate battery system procurement (including UPS uninterruptible power supply, cooling systems, environmental monitoring, distribution, fire protection, security, lighting, materials, etc.) at a price of 0.695 yuan/Wh. This project is based in Hohhot and Linhe New Area, leveraging Inner Mongolia’s hub to carry out research and application demonstrations of critical technologies for coordinated computing and energy.

In December 2024, China Railway 14th Bureau Group Co., Ltd. and Liuzhou Power Survey and Design Co., Ltd. jointly won the EPC general contracting for a 400MW/800MWh independent energy storage station in the Xingshi District of Laibin City, Guangxi, totaling 3.63686 billion yuan. In February 2025, Yongtai Shuneng successfully delivered the “Digital Xichong: Urban Superbrain” energy storage project, marking the establishment of the local first data center energy storage project, ensuring stable operation of the Superbrain AI. This project, supported by iFlytek, aims to build a smart city governance center in Xichong County, Nanchong City, Sichuan Province, recognized as a provincial-level digital transformation promotion center. Yongtai Shuneng tailored an energy storage solution with a capacity of 200kW/430kWh, equipped with two Smart 215 L intelligent liquid-cooled industrial energy storage systems, designed as an all-in-one solution integrating lithium batteries, BMS, PCS, and EMS modules, providing peak shaving, grid frequency regulation, power expansion, and backup power functions.

In February 2025, Keda Guoxin Energy Technology Co., Ltd. was pre-qualified for the China Telecom (Anhui) Intelligent Computing Center energy storage project (Phase I), with a construction scale of 25MW/200MWh, a cooperation sharing period of 10 years, and a budget of 373.998 million yuan. These projects signify that energy storage is evolving from a “backup power supply” to a “core component of computing infrastructure.” In the coming years, collaborative development of “wind-solar large bases + data centers + energy storage” in the west and “data centers + source-network-load-storage” models in the east will emerge, positioning data center energy storage as the next explosive growth point.

Global Trends in Energy Storage

In the overseas market, the capital market’s reaction has been more straightforward. The UPS industry is experiencing a 17% compound annual growth rate and is expected to reach a market size of $87 billion by 2027. Goldman Sachs analysts have described data center energy storage as a “digital-age oilfield equipment supplier.” The development of data center energy storage in the United States is already leading the world, with Tesla’s Megapack battery storage system being utilized in several large data centers, including those of Google, Amazon, and Microsoft, all of which have committed to using 100% renewable energy and are exploring intelligent coupling between data centers and energy storage systems to optimize energy utilization.

The Trump administration recently announced a collaboration with SoftBank, OpenAI, and Oracle to develop a $100 billion AI data center, with plans to expand investments to “at least” $500 billion. Part of this project is expected to be powered by solar and energy storage systems developed by SB Energy (a subsidiary of SoftBank). According to estimates from the International Energy Agency, U.S. data centers consumed approximately 200 billion kWh of electricity in 2022, accounting for about 4.5% of total U.S. electricity consumption, and this is projected to rise to 260 billion kWh by 2026, increasing its share to around 6%, with an average annual growth rate of 6.8% from 2023 to 2026.

The Electric Power Research Institute indicates that as major tech companies invest in expanding computing centers, the electricity consumption of U.S. data centers may double by the end of 2030, potentially accounting for 9% of total electricity generation. Clean energy sources such as solar, wind, and nuclear power are viewed as key solutions to mitigate the energy demands of AI.

By 2025, overseas industrial and commercial energy storage is expected to grow by over 100%. Compared to domestic industrial and commercial energy storage, which primarily relies on time-of-use price arbitrage, overseas applications of microgrids, solar storage, and various energy storage scenarios are more diverse and less standardized, presenting numerous opportunities for Chinese energy storage companies to expand internationally. In 2024, numerous companies, including BYD, Sungrow, Singularity Energy, Jingkong Energy, Daqin Shuneng, and Tielongmei Storage, are accelerating their international outreach, with some companies reporting that overseas revenue accounts for over 50% of their total income. Many industrial and commercial energy storage companies anticipate a growth rate of over 100% in overseas markets by 2025, with Europe and North America being key targets for expansion.

Unlike the past focus on household energy storage, in 2024, the installation capacity of large-scale storage projects in Europe surpassed that of residential energy storage for the first time, becoming a major driver of market growth. According to the EU’s “Fit for 55” and “RepowerEU” plans, the goal is to achieve over 40% renewable energy generation by 2030 and further increase it to 45%.

Amid energy shortages caused by geopolitical tensions and extreme weather, electricity prices in Europe have skyrocketed, severely impacting the manufacturing sector. Data indicates that electricity costs for industrial use in Germany rose by 42% year-on-year in 2024, significantly squeezing profit margins for businesses, with energy-intensive industries facing unprecedented cost pressures.

Due to the large-scale nature of industrial and commercial energy storage, it can better match the large-scale absorption of renewable energy, lower energy costs, and enhance operational flexibility. Therefore, the demand for such systems is becoming increasingly urgent in the context of Europe’s energy transition. According to incomplete statistics from the CESA Energy Storage Application Branch, the new installed capacity of industrial and commercial energy storage in Germany rose in 2024, reaching 240MWh, a year-on-year increase of 19.3%, with a market share of 4.21%. Although the scale is still small, the economic benefits and improved regulatory conditions for industrial and commercial energy storage are expected to lead to significant growth in installed capacity in the coming years.

At the same time, the EU has introduced the “Energy Storage Recommendations” policy to promote the large-scale deployment of energy storage technologies, supporting the integration of renewable energy and enhancing grid flexibility. This provides a favorable environment for the development of industrial and commercial energy storage systems. European governments are also implementing a series of incentive policies, such as tax reductions and subsidies, to promote the development and application of energy storage technologies.

Overall, the European market is transitioning from a household-dominated focus to large-scale, industrial commercialization, driven by policy guidance, electricity price fluctuations, and technological advancements. BloombergNEF predicts that by 2030, the cumulative capacity of industrial and commercial energy storage projects in Europe will increase from 0.7GW in 2020 to 8.8GW.

It is worth noting that Chinese energy storage companies still face numerous challenges when expanding internationally, encompassing technical, market, policy, and cultural dimensions. First, differences in technical standards and regulations require companies to adapt to the requirements of target markets, including voltage frequency and grid connection standards, which may necessitate redesigning or adjusting products. Second, market entry barriers and protectionist policies, such as high tariffs and quota restrictions, as well as time-consuming certification and compliance processes, pose significant obstacles. Third, the complexity of supply chain management and the strategies for brand marketing, along with compliance with environmental protection and social responsibility, are important considerations for companies venturing abroad.

Moreover, the application scenarios for industrial and commercial energy storage are highly diverse, including factories, shopping malls, and data centers, each with unique demands. In the future, companies that can provide customized solutions for various complex application scenarios will have a competitive advantage.

Introduction to the 2025 CIES Energy Storage Conference

The 2025 CIES Energy Storage Conference is jointly organized by the Energy Storage Application Branch of the China Chemical and Physical Power Industry Association, China Energy Storage Network, and Digital Energy Storage Network, with academic support from the expert committee of the Energy Storage Application Branch. The conference will feature:

• Opening ceremony and keynote reports from invited academicians and experts;
• Integration innovation between digitalized distribution networks and new energy storage;
• New power systems and grid dispatching;
• Collaborative development of new energy storage and large energy bases;
• International energy storage, power auxiliary services, spot trading, and capacity markets;
• Industrial green microgrids, national energy storage standards promotion, and solutions for intelligent energy storage systems;
• Safety, fire protection, and testing certification for energy storage, new capital and investment opportunities in energy storage, and more.

During the conference, a series of research outputs will be released, including the “2025 White Paper on the Development of China’s New Energy Storage Industry,” the “2025 White Paper on Industrial Green Microgrid Development,” and the “2025 Analysis Report on New Energy Storage Project Bidding and Pricing.” We expect over 60,000 guests from government agencies, research institutes, grid companies, power generation groups, EPC contractors, system integrators, energy storage device companies, energy service providers, project developers, investment and financing institutions, and international buyers, along with over 1,000 enterprises participating in the conference and exhibition.

As a barometer for promoting the high-quality development of the energy storage industry, the China International Energy Storage Conference and Exhibition (CIES) has adhered to high-end, quality, and international characteristics since its inception in 2011. The organizers have facilitated over 500 billion yuan in domestic and international supply chain and channel cooperation, assisted local governments in attracting investment projects exceeding 100 billion yuan, and supported various capital collaborations reaching 300 billion yuan.

This year’s exhibition will feature “4+1+1” exhibition areas, including: energy storage system integration, power generation groups, electrical equipment, temperature control equipment, control systems, energy storage batteries, testing and certification, fire protection and safety, and more.

The exhibition will focus on the forefront of global technology and practices in the energy storage sector, actively building communication channels between government and enterprises, exploring new paths for the high-quality development of the energy storage industry, promoting deep integration of high-end innovative factors such as specialized, refined, unique, and novel technologies, capital, and services, showcasing new products, technologies, equipment, and services from both domestic and international sources, helping exhibitors expand brand influence and recognition, actively opening up domestic and international market channels, enhancing the competitiveness and market share of self-controlled products, and accelerating the rapid growth of China’s energy storage brand enterprises, contributing “energy storage wisdom” and “energy storage solutions” to building a green, efficient, flexible, intelligent, and sustainable modern energy system.

We look forward to your participation in the 2025 15th China International Energy Storage Conference and Exhibition.