Behind the Prosperity of the Energy Storage Industry: Double Test of Policy Benefits and Market Challenges
On April 10, the 13th International Energy Storage Summit and Exhibition (ESIE2025) opened in Beijing. Numerous participating companies showcased their latest achievements and innovative applications in the field of energy storage technology. From advanced battery products to efficient flywheel energy storage technology, from intelligent energy management systems to diverse energy storage application scenarios, the vitality and potential of the energy storage industry were clearly on display.
“At ESIE2025, we released the ‘BM2T Battery Management Technology White Paper,’ which offers a new perspective aimed at breaking away from traditional, inefficient battery management methods,” stated Zhou Jianjie, Chief Technical Expert of the Energy Storage Division at Sunshine Power Co., Ltd., in an interview with China Securities Daily. He emphasized that batteries should not be equated with energy storage systems; understanding, managing, and using batteries effectively is essential for making energy storage safer, more efficient, and longer-lasting.
Guided by the “dual carbon” goals, China’s energy storage industry is experiencing rapid growth. Energy storage technology is contributing significantly to the steady advancement of new power systems, playing a crucial role in the country’s energy transition and green development.
Intensive Policy Introduction Strengthens Industry Self-Regulation and Overall Planning
Currently, the construction of new power systems is progressing vigorously. With a large-scale integration of renewable energy sources such as solar and wind power into the grid, along with a continuous increase in electricity demand, the stability and reliability of traditional power systems face unprecedented challenges. At this critical juncture, energy storage technology, with its inherent advantages and rapid development, is becoming a key support for solving various issues within the power system.
“During periods of excess electricity, energy storage technology can efficiently store surplus energy, much like diligent bees collecting nectar. Conversely, during shortages, it can quickly release energy to supplement the power system, effectively balancing supply and demand and significantly enhancing the stability and reliability of the power system,” explained Chen Zhiyuan, Head of Solutions at Xi’an Weiguang Energy Technology Co., Ltd., during the ESIE2025 “Storage +” Solutions Pavilion.
In recent years, energy storage technology has made significant advancements, and its commercial applications are gradually maturing. This year has also seen a flurry of policy introductions. In February, the Ministry of Industry and Information Technology, along with seven other departments, jointly issued the “Action Plan for the High-Quality Development of the New Energy Storage Manufacturing Industry,” providing a clear direction for the future development of this sector.
In January, the National Development and Reform Commission and the National Energy Administration released a notice clarifying that energy storage configuration should not be a prerequisite for the approval, grid connection, or online access of new energy projects. This announcement marked the end of the controversial “mandatory storage for new energy” policy.
At the exhibition, Han Jingtao, Vice President of Products at Guoneng Rixin Technology Co., Ltd., mentioned, “The end of mandatory energy storage has uncoupled the relationship between energy storage configuration and renewable energy project approvals, providing greater flexibility for the development of renewable projects.” This policy adjustment allows renewable projects to more autonomously decide whether to incorporate energy storage facilities based on their needs and circumstances, thereby reducing investment costs and enhancing economic benefits.
With policy guidance, the new energy storage manufacturing industry will accelerate technological innovation and industrial upgrading, improving product performance and reliability, reducing production costs, and enhancing market competitiveness. According to incomplete statistics from the Energy Storage Application Branch of the China Chemical and Physical Power Industry Association (CESA), a total of 58 energy storage-related policies were released in February 2025, covering various areas such as finance, electricity market participation, renewable energy storage, and charging infrastructure.
The surge in policy releases reflects the significant growth in new energy storage installations in recent years, showcasing a thriving industry landscape. However, beneath this prosperity lie concerns, such as rapid capacity expansion, intense price wars, and difficulties in achieving profitability faced by energy storage companies.
As the industry navigates the path of technological innovation and commercialization, it requires further self-regulation and comprehensive planning. Si Peiyuan, Director of the Membership Department at the China Electric Power Equipment Management Association, remarked that companies must enhance internal management, reasonably control the speed of capacity expansion, and avoid vicious competition. While China has made some progress in energy storage technology research and development, there is still room for improvement in key performance metrics such as energy density, cycle life, and safety of energy storage batteries.
In terms of commercialization, the demand in the energy storage market has not been fully released, necessitating further exploration and innovation.
Intensifying Market Competition: Companies Seek Transformation and Breakthroughs
In recent years, China’s energy supply and demand dynamics have undergone significant changes, with profound adjustments in the power generation structure. The once-dominant thermal power installations have gradually decreased in proportion to total power generation capacity, while the total installed capacity of renewable energy has rapidly increased, creating a parallel situation with thermal power.
Within this context of energy transition, the energy storage industry faces unprecedented opportunities and challenges. Insights from financial reports of leading energy storage and battery companies, along with related research reports, reveal ongoing industry developments. Leading companies are actively investing in energy storage technology, increasing research and development efforts to achieve significant breakthroughs in key indicators such as battery energy density, charge and discharge efficiency, and cycle life.
Moreover, the market share in the energy storage sector is gradually expanding, attracting numerous companies to enter the field. It is noteworthy that although energy storage installations are reaching new highs, many energy storage stations are not being fully utilized. According to the “2024 Annual Statistical Data on Electrochemical Energy Storage Stations” released by the China Electric Power Enterprise Union, the average utilization index for renewable energy storage systems improved to 32% in 2024, yet it still falls far short of the 52% utilization rate of grid-side energy storage. This highlights the need to improve the utilization rate of renewable energy storage stations.
Additionally, competition within the energy storage industry is becoming increasingly fierce. With the continuous decline in lithium carbonate prices, the prices of energy storage cells have also decreased significantly. To capture market share, some leading companies have begun to push for extreme cost reductions in lithium battery production processes and further price reductions by enhancing management of non-production materials to cope with intense market competition.
Amidst this backdrop, participants at ESIE2025 presented their solutions, aiming to break through in this competitive landscape. Zhou Jianjie indicated that the energy storage industry needs to quickly shift away from disordered, low-price competition and focus on value-driven competition centered around safety, efficiency, and user-friendliness. He stressed the importance of strengthening standardized construction in energy storage.
Sunshine Power is collaborating with relevant industry organizations to promote the standardization of processes such as product standards, testing specifications, project implementation, and grid connection acceptance. Furthermore, energy storage companies must embrace market reforms; following the cancellation of mandatory energy storage, the demand for energy storage is transitioning from policy-driven to value-driven. Companies should focus on optimizing trading strategies in the electricity spot market to enhance their software capabilities.
Liu Zhi, Deputy Chief Engineer of Harbin Electric Technology Group Co., Ltd. and General Manager of Rui Electric Technology Co., Ltd., mentioned, “The energy storage industry should actively respond to policy changes and fully support the entry of renewable energy into the electricity market. We leverage our years of product and operational experience in the renewable energy sector to explore in-depth technical developments and product innovations in wind-storage integration, optimizing joint scheduling to enhance trading benefits.”
Lu Li, Senior Director of Strategic Marketing at Shenzhen Yingfeiyuan Technology Co., Ltd., shared that the company invests over 10% of its annual revenue in research and development, continuously studying core technologies and application-layer technologies in digital energy, and solidifying its technological “moat.”
During the series of exhibitions and forums at ESIE2025, many professionals in the energy storage sector expressed the need to deepen the marketization process of energy storage, implementing strategies such as collaborative integration of software and hardware, increasing research and development investments, and widening price fluctuation ranges in the spot market to explore profit margins in energy storage projects, thereby strengthening the core competitive advantages of companies in the era of autonomous energy storage configuration.
