2025 White Paper on the Development of China’s New Energy Storage Industry: Opportunities and Challenges
As the world undergoes a significant energy transition, the energy storage sector has emerged as a crucial player, significantly contributing to the advancement of renewable energy and ensuring energy security. In 2024, China’s energy storage industry demonstrated remarkable resilience amidst a complex environment. With the acceleration of global carbon neutrality efforts, energy storage has become a vital support for energy transformation, leading to continuous market expansion. The influence of China’s energy storage industry extends beyond its own energy structure optimization, impacting the global renewable energy landscape profoundly. During this year, while the industry faced challenges such as “overcapacity” and “price competition,” it also made substantial progress in technological innovation and application scenario expansion.
This report compiles insights based on the “Energy Storage Leader Alliance: 2025 White Paper on the Development of China’s New Energy Storage Industry: Opportunities and Challenges” and data from over 308 energy storage industry research reports. The report collection has been shared in a discussion group, allowing readers to engage with over 500 industry professionals for exchange and growth. This report delves deep into the market landscape, application scenarios, technological development trends, digital integration, as well as the opportunities and challenges faced by the Chinese new energy storage industry. Through data-driven professional analysis, it aims to provide readers with in-depth market insights and practical recommendations, helping industry participants better understand market dynamics, meet challenges, and seize opportunities.
1. Overview of the Market Landscape of China’s New Energy Storage Industry
In 2024, China’s new energy storage market exhibited vigorous growth, with both bidding and awarded projects reaching new heights and installed capacities continuously increasing. The bidding information tracked by the EESA database revealed a total of 2,465 new energy storage bidding instances in 2024, amounting to 126.1 GW/368.2 GWh. The scale of centralized procurement and project bidding saw significant increases, along with greater diversity in bidding technologies. While lithium iron phosphate battery storage remains dominant, other technological routes are also evolving.
The number of awarded projects also reached a new record, with 1,353 awarded instances totaling 90.7 GW/234.5 GWh, marking substantial year-on-year growth in both EPC and energy storage system projects. The prices for energy storage systems per watt-hour and EPC contracts decreased, reflecting a reduction in industry costs. As of December 31, 2024, the cumulative installed capacity of China’s new energy storage reached 78.5 GW/185.7 GWh, with an additional 42.5 GW/107.1 GWh installed in 2024, representing a year-on-year growth of 109.5%. The last month of the year saw a record high in newly installed capacity.
In terms of regional distribution, Xinjiang, Inner Mongolia, and Jiangsu led in new energy storage installations. Xinjiang, with its large-scale new energy installations but limited local consumption capacity, has a strong demand for energy storage. Inner Mongolia benefits from the demand for energy storage to support ultra-high voltage transmission lines and policy funding. As a load center, Jiangsu’s increased penetration of renewable energy has led to a surge in peak shaving and frequency regulation demand. Hebei also experienced rapid growth in energy storage installations driven by policy support.
| Region | Advantages of New Installations | Reasons |
|---|---|---|
| Xinjiang | Large new energy installation scale, long-term demand for energy storage due to local consumption and transmission challenges. | Leading in new energy installations but facing issues with local consumption capacity and transmission difficulties. |
| Inner Mongolia | Strong demand for energy storage supporting ultra-high voltage transmission, driven by policies and funding. | Policies and funding promote large-scale energy storage construction near ultra-high voltage nodes. |
| Jiangsu | Load center with increased demand for peak shaving and frequency regulation from renewable energy penetration. | The “715 Supply Guarantee Project” has driven many independent energy storage installations, contributing to incremental capacity. |
| Hebei | Rapid growth in new energy installations, with policies accelerating energy storage installation. | The gap in energy storage installations from the “14th Five-Year Plan” was significant, but 2024 saw rapid growth due to policy support. |
In the context of the global energy market, the lithium battery market has also drawn considerable attention. The global lithium battery market is projected to expand rapidly, with an annual growth rate of 25%, and is expected to exceed 4 terawatt-hours by 2030. The rise of electric vehicles and the demand for long-range capabilities are driving a sharp increase in demand for power batteries, which are expected to dominate 80% of the market share. As electric vehicles continue to develop, the demand for charging infrastructure is set to surge, with an estimated need for approximately 151 million light-duty electric vehicle charging stations and about 1.2 million medium- and heavy-duty electric vehicle charging stations. This growth trend is heavily influenced by the convenience of charging, as the ease of access directly affects the construction and layout of charging stations.
In Europe and China, the penetration rate of electric vehicles is continuously increasing, further driving the demand for charging infrastructure. For light-duty electric vehicles, by 2035, it is expected that Europe will have approximately 76 million charging stations, while China will have around 75 million. Notably, private (slow) charging stations will comprise a significant portion of the installation base, reflecting consumer preferences for charging at home or work. For heavy-duty electric vehicles (HDVs), it is anticipated that by 2035, Europe will have about 588,000 charging stations, while China will reach around 638,000. Given that heavy-duty vehicles often charge at self-built dedicated stations overnight, their reliance on public charging infrastructure is gradually decreasing. However, as the entire HDV fleet transitions to electric power, the demand for public charging will increase, leading to a growing share in the composition of charging facilities.
2. Application Analysis of New Energy Storage in Various Scenarios
China’s new energy storage primarily applies to three major scenarios: power source side, grid side, and user side, each with its distinct characteristics and development trends. Grid-side energy storage is the primary contributor to new installations, accounting for 60.0% (in terms of installed energy capacity), with independent storage comprising 57.6%. As policies promoting independent energy storage over traditional forms gain traction, it is expected that the proportion of new independent storage installations will continue to rise by 2025. The power source side represents 32.3% of installations, primarily serving to stabilize the volatility of generation from renewable sources like wind and solar. User-side storage accounts for 7.7%, mainly in commercial and industrial sectors, utilizing time-of-use pricing mechanisms to achieve peak-valley arbitrage, thereby reducing electricity costs for enterprises.
Driven by the expansion of new energy installations, the market for grid-side energy storage experienced a simultaneous increase in new installations, reaching 38.8 GW/98.9 GWh in 2024, a 113% year-on-year growth. In terms of policies, 696 related regulations were issued in 2024 covering various aspects including the electricity market, energy storage integration, planning, and subsidies. The integration policy shows notable regional differentiation, stricter requirements, and more flexible formats. In terms of business models, diverse profit models have emerged, including capacity leasing, capacity compensation, energy trading, and ancillary services, with slight variations in profitability models across different regions. Market forecasts indicate that the EESA predicts new installed capacity for grid-side energy storage to reach 160.2 GWh in optimistic scenarios by 2025, representing a year-on-year increase of 62%.
On the user side, commercial and industrial storage dominates the market, with significant growth in operational scales of projects in 2024, reaching a total of 3.74 GW/8.2 GWh, reflecting a 72% year-on-year increase. However, this segment is also affected by stricter policy constraints. In 2024, 742 relevant policies supporting the sector were issued, with unprecedented support, and adjustments in electricity pricing have made investment conditions favorable in some regions. The business models are diverse, encompassing peak-valley arbitrage, photovoltaic consumption, and demand management, with the potential for spot market arbitrage to become a major profit source in the future. Market predictions suggest that by 2025, commercial and industrial energy storage installations are expected to reach 12.5 GWh, with Jiangsu, Zhejiang, and Guangdong remaining the primary battlegrounds, while Anhui and Sichuan could emerge as secondary leaders.
| Application Scenario | 2024 Installation Share (Energy Capacity) | Main Functions | Future Development Trends |
|---|---|---|---|
| Grid Side | 60.0% (Independent Storage: 57.6%) | Peak shaving and frequency regulation services, enhancing grid resilience. | Increasing share of new independent storage installations. |
| Power Source Side | 32.3% (Solar and Wind Integration: 30.9%) | Stabilizing generation volatility associated with renewable energy. | Continued growth in installations driven by the scale of new energy installations. |
| User Side | 7.7% (Mainly Factory Integration) | Utilizing time-of-use pricing for peak-valley arbitrage to reduce enterprise electricity costs. | Diverse scenarios emerging, with self-investment and pure leasing models gaining importance. |
In the photovoltaic market, the new centralized photovoltaic installations in 2023 saw significant growth, surpassing distributed installations for the first time, with total installations exceeding 110 GW, accounting for over half of the market share. To promote the rapid development of centralized photovoltaics, relevant authorities have mandated that the first batch of base projects achieve grid connection by the end of 2023. The second batch of base projects has a completion rate exceeding 50%, and nearly a quarter of the preliminary work for the third batch has been completed. These projects lay a solid foundation for the future development of centralized photovoltaics. Meanwhile, distributed photovoltaics are also experiencing new characteristics of growth. The newly installed capacity approached 100 GW, with commercial and industrial distributed photovoltaics growing particularly fast, exceeding 50 GW. Residential distributed photovoltaics also demonstrated strong growth, surpassing 40 GW. Additionally, the growth rate of commercial and industrial distributed photovoltaics is accelerating, while the focus of the residential market is shifting southward with new changes in registration requirements in some provinces. Overall, the photovoltaic market in 2023 exhibited a balanced growth between centralized and distributed systems, each showcasing unique advantages and potential. With ongoing technological advancements and market maturation, the photovoltaic industry is expected to maintain a robust growth trajectory in the future.
3. Analysis of Trends in New Energy Storage Technology Development
New energy storage technologies are diverse, including lithium-based and non-lithium storage, with various technologies continuously evolving and innovating to meet the needs of different application scenarios. The lithium battery storage industry chain is mature, accounting for over 85% of bidding and operational projects. System integration technologies need to address consistency issues between battery cells and power electronic devices, with diverse application scenarios and product forms. Mainstream integration technologies for grid-side storage include centralized and string-based systems, with future developments focusing on enhancing energy density, high integration, improving penetration rates of grid-type storage, and accelerating the adoption of high-voltage cascading technologies. Commercial and industrial storage integration technologies will also continue to optimize, such as the application of long-cycle battery cells and upgrades in safety.
In the field of energy storage batteries, lithium-ion batteries remain the mainstream storage form, with safety, cost, and performance as key indicators. Future energy storage cells are expected to focus on increasing energy density, achieving extreme safety, and incorporating smart technologies. In the field of storage inverters, high-power PCS are rapidly iterating, while the market penetration of string-type PCS is steadily increasing, and liquid-cooled PCS are emerging as a new technology, with grid-type PCS also gaining traction. In BMS technology, active balancing techniques and EIS-based detection technologies are developing rapidly, which will enhance battery consistency and safety. As the core of the storage system, EMS is expected to evolve towards smart, integrated, multi-energy fusion, and cloud platform and distributed architecture. Temperature control technologies are crucial for the safe operation of storage systems, with rapid market development in 2024 and diverse technological routes, although challenges such as leakage, noise, efficiency, and lack of standards remain. Future trends may include natural cooling, liquid cooling, and modular temperature control units.
Fire protection systems for lithium battery storage have established standardized protection schemes, including fire detection and alarm, gas extinguishing, explosion-proof ventilation, and water extinguishing systems to ensure the safety of storage systems. Non-lithium storage technologies are seizing development opportunities against the backdrop of high proportions of new energy integration. Concentrated solar power, with its long-term storage capabilities and flexible adjustment characteristics, is becoming a key support for building new power systems, though it faces challenges such as high initial investments and insufficient levelized cost of electricity competitiveness. Flow batteries offer high safety and long cycle life but require high initial investment costs. With technological advancements and cost optimizations, they are expected to play a larger role in long-duration energy storage scenarios. Compressed air energy storage is a large-scale long-duration storage solution that continues to break through technological barriers, but efficiency improvements and geographic limitations still need to be addressed. Flywheel storage provides rapid response capabilities suitable for grid frequency regulation needs, but it currently faces developmental challenges. In the future, it is expected to play a significant role in hybrid storage and grid applications. Hydrogen energy, as a clean energy source, is included as a new energy storage method, with broad applications anticipated in power systems and green chemicals.
| Type of Storage Technology | Technical Features | Development Trends | Challenges |
|---|---|---|---|
| Lithium Battery Storage | Flexible layout, short construction cycle, fast response, high energy density, long life, and high energy efficiency. | Integration system energy density enhancement, high integration, increased penetration of grid-type storage; cell energy density improvements, pursuit of extreme safety, smart features; inverter advancements in high power, string types, liquid cooling, and grid-type penetration. | Safety, cost control, and unification of technical standards. |
| Thermal Energy Storage | Integrated “light-heat-electricity” supply, continuous and stable power supply, prominent energy density and scale effects. | Scale development, becoming an important support for energy transition. | High initial investment, insufficient competitiveness of levelized cost of electricity. |
| Flow Battery Storage | Water-based electrolyte solution, no explosion risk, long cycle life. | Cost optimization and efficiency improvement, playing a larger role in long-duration energy storage scenarios. | High initial investment costs. |
| Compressed Air Energy Storage | Large capacity for long-duration storage, capable of balancing supply and demand in the grid. | Improving energy conversion efficiency, addressing geographic constraints. | Efficiency constrained by compressor and expander performance. |
| Flywheel Energy Storage | High power density, high cycle count, long lifespan, fast response, high safety. | Playing a significant role in hybrid storage and grid applications. | Lack of independent research and development capability, high costs. |
| Hydrogen Energy | Broad sources, clean and carbon-free, high calorific value, flexible and efficient, diverse application scenarios. | Significant applications in power systems and green chemicals. | High costs of green hydrogen, further technological development required. |
The development of the energy storage industry has also fostered the growth of related enterprises. The sector is experiencing a notable growth phase, with the number of related companies on the rise and the scale of global energy storage companies expanding rapidly. This trend is evident worldwide, particularly in countries such as the United States, Brazil, and India, which have become major hubs for energy storage companies. Simultaneously, Chinese energy storage enterprises are attracting substantial international attention due to their strong competitiveness and innovative capabilities. They actively utilize professional social platforms to build and enhance brand recognition. In this digital age, professional social platforms serve not only as communication channels for professionals but also as vital windows for companies to showcase their strengths and attract potential clients.
According to LinkedIn data, despite significant investment by Chinese energy storage companies on the platform, brand recognition currently stands at only 13%, indicating a need for greater efforts in brand communication and image building. Through this professional social platform, companies can publish industry news, success stories, and technical interpretations, enhancing brand image and expanding brand awareness. With up to 76% of budgets and resources allocated to user cultivation, Chinese energy storage companies recognize the importance of potential users. Companies can accurately target specific user groups, deliver customized content, establish interactive relationships, and enhance user loyalty. Additionally, they can gather user feedback to optimize products and services, further meeting user needs. The sales conversion rate is currently at 11%, which, although relatively low, indicates that companies are laying a solid foundation for future sales conversions given the high investment in user cultivation. By cultivating users, companies can identify high-intent potential clients and convert them into actual buyers through subsequent sales strategies, suggesting considerable room for improvement in sales conversion.
4. Opportunities and Challenges in the Development of the Energy Storage Industry
The global energy storage market presents vast opportunities, with continuous high growth since 2017. In 2024, approximately 188.5 GWh of new energy storage installations are expected globally, reflecting an 80% year-on-year increase. China, the United States, and Europe are the primary markets, with predictions for 2025 indicating global new installations reaching 265.1 GWh, with China remaining the largest energy storage market worldwide. The application scenarios and business models for energy storage are diversifying. Independent energy storage on the grid side is expected to develop significantly following the cancellation of mandatory integration, with user-side scenarios continuously emerging, such as storage for charging stations and industrial parks. Investment and operational models for commercial and industrial storage are shifting from contract energy management towards owner self-investment and pure leasing models. Trading models are set to improve, with the electricity spot market becoming fully open, and virtual power plants playing a vital role. Operational management will increasingly focus on AI-enhanced intelligent operations to improve the efficiency and safety of energy storage systems.
The restructuring of the energy storage industry chain is accelerating. The global supply chain is shifting towards a “safety first” approach, while Chinese energy storage companies face policy constraints and business environment challenges, prompting faster globalization efforts. The domestic market is experiencing structural overcapacity, with an imbalance between supply and demand leading to fierce price competition, further increasing market concentration. Price competition is intensifying, resulting in significant industry restructuring, with lower-quality capacities and companies being phased out, leading to increased concentration around leading enterprises.
| Aspect | Current Status | Future Trends |
|---|---|---|
| Global Market | Sustained high growth since 2017, with approximately 188.5 GWh of new installations expected in 2024, an 80% year-on-year increase. | New installations are anticipated to reach 265.1 GWh in 2025, with China continuing as the largest market. |
| Application Scenarios and Business Models | Independent energy storage on the grid side is expected to grow significantly, with increasing user-side scenarios; investment and operational models are transforming, and trading models are improving. | More refined scenarios, mature business models, and improved levels of intelligence. |
| Industry Chain Restructuring | The global supply chain is shifting towards “safety first”; Chinese companies are accelerating globalization efforts; domestic structural overcapacity leads to fierce price competition. | Optimized industry structure and enhanced competitiveness of enterprises. |
| Pricing and Competition | Intensifying competition, significant price wars, phasing out of lower-quality capacities, and increased industry concentration. | Competition among leading enterprises for innovation capabilities, fostering healthy industry development. |
| Industry Transformation | The release of Document No. 136 marks the entry of the energy storage industry into a fully market-oriented phase. | Short-term pain, but long-term market demand growth and competition for enterprise value. |
In the broader context of energy transition, the involvement of renewable energy and energy storage in electricity market transactions has garnered considerable attention. From 2019 to 2023, the volume of market-based transactions in China’s renewable energy sector continued to grow, reaching 684.5 billion kilowatt-hours in 2023, accounting for 47.3% of total renewable energy generation. In the same year, the volume of green electricity settlements by the State Grid Corporation surged to 57.6 billion kilowatt-hours, with green certificate trading increasing 15-fold to 23.64 million certificates. Additionally, in 2023, the Beijing Electricity Trading Center actively promoted the entry of new energy storage into the market, with 186 new energy storage entities registered, totaling over 10 million kilowatts in capacity. Provinces like Shandong and Shanxi have defined rules for independent energy storage participation in the spot market, with 28 provinces implementing policies for energy storage integration or leasing in renewable projects, while also standardizing prices and compensations for energy storage participation in ancillary services.
Currently, China’s electricity market has formed an organic whole composed of “mid-to-long-term trading + spot trading + auxiliary services,” with the mid-to-long-term market managing price risks and the spot market achieving a balance in electricity supply and demand. Simultaneously, the electricity market system is continuously improving through inter-provincial and intra-provincial dynamics, such as the expansion of “Jin Electricity Transmission” to 14 provinces, providing robust support for electricity supply across 23 provinces nationwide.
From the perspective of carbon emissions, the energy sector is the primary contributor to China’s carbon emissions, accounting for nearly 90%. The high proportion of coal-fired power plants has led to significant energy-related emissions, with coal accounting for 70% in 2020. The electricity sector leads in energy emissions, with its share increasing significantly compared to other sectors. The energy sector is undoubtedly a critical source in China’s carbon emission profile, with its share close to 90% of total emissions. According to data from the World Resources Institute (WRI), from 2016 to 2020, carbon emissions from the energy sector accounted for an average of approximately 88% of China’s total carbon emissions, starkly contrasting with other regions where the energy sector accounts for less than 60%. The primary reason for this disparity lies in the high proportion of traditional coal-fired power in China’s energy supply system.
As of 2020, among energy-related emissions in China, coal contributed approximately 70%, oil approximately 12%, natural gas about 6%, and roughly 11% stemmed from process emissions. The carbon emissions resulting from energy combustion are the core of emissions in the energy sector. Further exploration of carbon emissions in the energy field reveals that the power sector is a significant contributor, accounting for about half of the total emissions. China’s energy sector carbon emissions encompass both fuel combustion and fugitive emissions, with fuel combustion exceeding 90%. Fuel combustion emissions can be further categorized into supply-side and demand-side dimensions. According to data from the International Energy Agency (IEA), the power sector, as the main energy supply department, has become the largest “culprit” of carbon emissions in the energy sector, followed closely by industrial production, transportation, and construction sectors on the demand side. Over time, the power sector’s share of total carbon emissions in China has been on an upward trajectory, climbing from 48.32% in 2016 to 53.48% in 2020, significantly surpassing other industries and underscoring its critical role and influence in carbon emission issues.
The energy transition also presents more economic opportunities for users. Peak-valley pricing policies enable users to leverage electricity price differentials for greater profit margins, especially in regions where the price difference exceeds 0.7 yuan/kWh. By optimizing control systems and intelligent storage strategies, users can further enhance economic value. With the increasing load from charging stations and other demands, the need for capacity expansion is also rising. Traditional static expansion methods are costly and time-consuming, whereas integrating tuning control systems allows users to achieve dynamic expansion, effectively reducing costs and shortening timelines. The reforms in the electricity market and flexible pricing mechanisms provide users with more opportunities to aggregate energy assets, improve energy efficiency, and participate in demand response and market trading for profit. To better adapt to changes in the electricity market, users require reliable distributed energy management solutions. Flexible load regulation holds significant potential; through tuning control systems, users can further aggregate and tap into flexible load resources such as charging stations, storage systems, and building HVAC systems. This aids in increasing the local consumption rate of new energy and enhancing electricity use efficiency.
In a context of increasing contradictions between global energy supply and demand, affected by multiple pressures from climate change, energy crises, and the COVID-19 pandemic, adjusting the energy structure has become crucial for low-carbon energy transition. In Europe and the United States, the price fluctuations of coal, oil, and natural gas have exacerbated issues due to political conflicts and trade barriers. To address this challenge, the European Union released the “RepowerEU” energy plan in May 2022, aiming to vigorously develop photovoltaic and wind energy to reduce reliance on fossil fuels. It is anticipated that the share of global new energy in the energy structure will continue to rise, playing an increasingly important role in the carbon neutrality process.
In China, under the dual carbon strategy, we are experiencing a historic transformation of the energy structure. In 2021, the State Council issued the “Action Plan for Carbon Peaking Before 2030,” proposing that by 2030, the proportion of non-fossil energy consumption will reach about 25%. The share of renewable energy sources such as solar and wind in China’s electricity structure is steadily increasing. By the end of 2021, China’s installed capacity for renewable energy generation reached approximately 700 million kilowatts, with wind and solar power capacities of 328 million and 306 million kilowatts, respectively, ranking first in the world. The annual electricity generation from wind and solar reached 978.5 billion kilowatt-hours, with its share in total social electricity consumption surpassing 10% for the first time, reaching 11.7%. Increasing the proportion of green electricity will significantly contribute to China’s energy security, sustainable development, and economic growth.
Future market demand is expected to continue expanding. According to predictions from the State Grid Energy Research Institute’s Economic and Energy Supply and Demand Research Institute, by 2024, the total electricity consumption across the country could reach 9.8 trillion kilowatt-hours, reflecting a 6.5% increase from the previous year. The total newly installed capacity for that year is anticipated to grow by 9.4% compared to the previous year, setting another historical record. By the end of 2024, the total installed capacity for electricity generation nationwide will reach 3.32 billion kilowatts, with renewable energy installations accounting for over 40%, and solar energy installations exceeding a quarter. It is expected that there will be a tense balance between electricity supply and demand nationwide, with certain regions potentially experiencing shortages during peak periods.
As Southeast Asia boasts unique natural resources and a rapidly developing economy, it is emerging as a new hotspot in the global renewable energy sector. The region displays enormous development potential across solar, wind, biomass, and other fields, providing vast market opportunities for Chinese renewable energy enterprises. In terms of international expansion, Chinese renewable energy companies have excelled in the Middle East and North Africa (MENA) region, with continuous increases in export values of major products. In investments in the MENA region, renewable energy accounts for nearly 20%. In recent years, the MENA region has become a new focal point for Chinese renewable energy companies’ overseas strategies, primarily through export trade and investment cooperation.
The Chinese new energy storage industry presents a complex and diverse landscape in terms of market, application, technology, and development environment. Industry participants must closely monitor market dynamics, grasp technological development trends, actively address challenges, seize development opportunities, and promote the continuous and healthy development of China’s new energy storage industry.
Reference Reports in This Topic (PDF Directory)
- 2025 White Paper on the Development of China’s New Energy Storage Industry: Opportunities and Challenges (Released on 2025-04-01)
- China Energy Storage Research Report 2025 (Released on 2025-03-16)
- Current Status and Trends of the New Energy Storage Industry – CNESA DataLink 2024 Storage Report (Released on 2025-03-04)
- 2024 Mechanical Energy Storage Industry ESG White Paper (Released on 2025-02-19)
- 2024 Global Off-Grid Power Storage Equipment Industry White Paper (Released on 2025-02-10)
- 2024 Current Status and Trends of the New Energy Storage Industry (Released on 2025-01-25)
- 2025 Portable Energy Storage Power Overseas Research Report (Released on 2025-01-22)
- 2024 Analysis of China’s Charging Piles and Storage Equipment Export and the Impact of Each Country’s Import Policies White Paper (Released on 2025-01-19)
