In 2025, the energy storage industry is undergoing a significant transformation, described as a “seismic” change. Following the introduction of the “Document No. 136,” which opened the market to renewable energy and eliminated mandatory storage requirements, a new directive was issued on April 2 by the General Office of the Central Committee of the Communist Party and the State Council. This document aims to improve the pricing governance mechanism for energy, establishing a pricing mechanism for natural gas power generation and energy storage to support the development of a new power system. Additionally, it proposes optimizing pricing policies for nearby transactions of renewable energy. This represents another major policy shift that will further drive energy storage into a trading era, marking the transition of storage from being a mere infrastructure to a frequently utilized resource.
Recent cases from overseas demonstrate that frequent usage is key to ensuring project profitability and reconstructing the energy storage ecosystem. Over the past decade, China’s energy supply and demand dynamics have shifted from a relatively loose state to a balanced one. The proportion of thermal power installations has decreased from approximately 66% in 2015 to around 43% in 2024, with installed renewable energy capacity nearly equaling that of thermal power.
As the industry focuses on larger and more efficient capacities, reports from leading companies such as CATL, Huawei, and BYD reveal that while they are expanding their share of the energy storage market, they are also initiating a transformation centered on technological paradigm shifts. This could lead to a revolution in energy storage applications and business models.
In 2024, CATL’s revenue from energy storage batteries reached 57.29 billion RMB, accounting for 15.8% of its total revenue. Although BYD did not separately disclose its energy storage performance, it still reported substantial figures, with revenues from its automotive and related products reaching approximately 617.38 billion RMB, or 79.45% of its total revenue. The energy storage segment, including solar and storage as part of its rechargeable battery business, is significant. Following CATL and BYD, Huawei also reported strong performance in the energy storage sector, achieving global sales of 862.1 billion RMB in 2024.
As for the evolution of energy storage, it is shifting from merely storing energy to using it more intelligently. The commercial landscape and application scenarios for energy storage are expected to undergo substantial changes.
1. Annual Reports: A Common Focus on Energy Storage
In the annual reports of CATL, BYD, and Huawei, there is a clear trend of increasing investment in energy storage. CATL anticipates that the growth rate of the energy storage market will surpass that of the power battery market, estimating it to be within the 25%-30% range over the next 3-5 years. Beyond energy cells, CATL is ambitious about system integration, introducing products like the world’s first energy storage system with zero degradation in power and capacity over five years, capable of storing up to 6.25 MWh. BYD aims to capture the largest market share in energy storage by developing a new generation of energy storage systems with ultra-high capacity density, safety, longevity, and low costs, leveraging its blade battery and CTS patented technologies.
2. Transformations in Energy Storage
From a technical standpoint, lithium battery storage is continuously making breakthroughs in long-duration and safety aspects. The National Development and Reform Commission has identified long-duration energy storage as a “key supporting technology” in its action plan for building a new power system from 2024 to 2027. It is expected that the bidding share for storage projects exceeding four hours will significantly increase by 2025, pushing lithium batteries to expand their capabilities.
For instance, in March 2023, Quinbrook Infrastructure Partners announced a collaboration with CATL to develop an eight-hour long-duration energy storage system called EnerQB, claimed to be the world’s first true eight-hour battery storage system. This system will be deployed across multiple sites in Australia, serving both existing and new commercial and industrial clients.
3. Safety Innovations in Energy Storage
The Moss Landing energy storage facility accident in California in March 2025 raised critical safety concerns in the energy storage industry, especially as single-site capacities exceeded GWh levels. This incident, with direct economic losses exceeding $1 billion, highlighted the dangers associated with traditional liquid lithium batteries. Companies are now focusing on reforming industry safety standards through real machine combustion tests and improving safety benchmarks.
4. Network-based Energy Storage Breakthroughs
Huawei’s digital energy division is working on intelligent, network-based energy storage solutions, moving from “supporting the grid” to “enhancing the grid.” As renewable energy installations surpass 40%, issues such as grid inertia and voltage fluctuations are becoming more pronounced. In this context, network-based energy storage has evolved from a “frontier technology” to a “strategic necessity.”
5. The AI Era and Energy Storage Value Chains
AI is a wave that no company can afford to miss. Huawei is leveraging initiatives to capture opportunities in the computing power era, particularly targeting data centers, parks, and households. The demand for computing power has led to increased energy consumption in data centers, prompting Huawei to propose a “computing power and electricity synergy” model.
In the coming years, the integration of battery swapping models, energy storage, and renewable energy will form more efficient energy networks. CATL’s ambitious plan for a “zero-carbon grid” aims to establish an independent energy system capable of powering large data centers or even a city.
As the industry navigates through discussions on safety, AI-driven operational revolutions, and the deep coupling of long-duration storage with new power systems, 2025 may mark a pivotal point where energy storage transitions from “scale expansion” to “value creation.” This technological transformation could define the industry landscape for the next decade.
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