INSIGHT: China new energy storage capacity to surge by 2030

SINGAPORE (ICIS)–New energy storage plays a crucial role in ensuring power balance in China, especially in effectively addressing the intermittent issues of new energy generation. It helps alleviate the dual pressures of power supply security and consumption.

• China new energy storage capacity more than double by 2030
• China new energy storage capacity at 73.76 million kW/168 million kWh by the end of 2024
• Policy support accelerates rapid development of new energy storage

By fully considering market and price factors, it can achieve a win-win situation of ensuring power balance and profitability. The new energy storage market in China has great development potential in the future.

The cumulative installed capacity of new energy storage in China is expected to exceed 100 gigawatts (GW) by 2025, according to the Energy Storage Industry Research White Paper 2025 released by the Institute of Engineering Thermophysics on 10 April.

The capacity is likely to surpass 200GW by 2030, more than double the 2024 level of 73.76GW.

NEW ENERGY GENERATION CAPACITY EXCEEDS COAL POWER FOR FIRST TIME
China’s “dual carbon” goals, announced in September 2020, aim to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.

As the “dual carbon” goals approach, China’s power structure is continuously evolving towards cleaner energy, with the proportion of non-fossil energy, especially new energy, steadily increasing.

The total wind and solar power generation in 2024 increased by 20% to 1,288.4 billion kilowatt hours (kWh), according to data from the National Bureau of Statistics (NBS).

As of February 2025, the installed capacity of wind and solar power totalled 1.45 billion kW, surpassing coal power for the first time to become the largest power source in China.

This achievement came nearly six years ahead of the 2030 target of 1.2 billion kW for wind and power generation installed capacity.

The national new energy utilization rate was 96.3% as of December 2024, according to data from the State Grid Energy Research Institute released at the 3rd China Energy Storage Conference and Exhibition in end-March.

NEW ENERGY GENERATION AND STORAGE AS KEY SUPPORT FOR POWER SUPPLY
Due to the randomness and volatility of new energy generation output, coupled with the integration of a large number of power electronic devices into the grid, the operation of power system faces challenges such as supply stability and consumption. New energy generation combined with new energy storage will provide key support for power supply.

In terms of ensuring supply, new energy generation has insufficient output capacity during peak power load periods. The balancing capacity of wind power is 5-15%, while the balancing capacity of solar power during the evening peak is almost 0, data from the State Grid Energy Research Institute showed. During consecutive days of no sunlight and no winds, the prolonged low output of new energy may lead to temporary power shortages.

On the consumption side, the growth of new energy installed capacity will continue to maintain a rapid growth momentum, surpassing the growth rate of system regulation capacity. Hence the utilization rate of new energy is expected to be on a downward trend in the future.

The total installed capacity of power generation nationwide will exceed 3.6 billion kW in 2025, with an additional new energy generation installed capacity of over 200 million kW, according to the National Energy Administration’s Energy Work Guidelines for 2025, released in February.

Additionally, changes due to technical characteristics present new challenges to the operational risks of the power system.

New energy storage features fast regulation speed and the ability to charge and discharge, providing regulation capabilities in both time and space scales. Through the innovative application of grid-forming energy storage, it is an important solution to the many challenges of large-scale integration of new energy.

POLICY SUPPORT ACCELERATES RAPID DEVELOPMENT OF NEW ENERGY STORAGE
Governments at national and local levels have introduced policies in areas such as ancillary services, demand response, and direct subsidies to encourage the strategic development of new energy storage.

The Energy Law of the People’s Republic of China, promulgated in November 2024, proposed the rational layout and active, orderly development and construction of pumped storage power stations. It also promotes the high-quality development of new energy storage and emphasizes the regulatory role of various types of energy storage in the power system.

The National Development and Reform Commission and the National Energy Administration (NEA) jointly issued the Notice on Deepening Market-oriented Reform of New Energy Grid-connected Electricity Prices and Promoting High-quality Development of New Energy on 27 January 2025, marking the formal establishment of a dual-driven mechanism of policy and market for the energy storage industry.

The configuration of energy storage should not be used as a prerequisite for the approval, grid connection, and grid access of new energy projects, which will fully leverage the decisive role of the market in resource allocation and facilitate the formation of a more mature and comprehensive business model for energy storage, the notice stated.

At the local level, governments of 18 provinces, municipalities and autonomous regions released 32 batches of energy storage demonstration project lists from 2021 to 2024.  Over 40 cities in eight provinces have introduced subsidies for user-side energy storage.

For example, the subsidy amount for initial investment in energy storage projects ranges from yuan (CNY)100 to CNY200 per kWh in Shenzhen and Dongguan of Guangdong province, and in Shanghai.

Subsidies for the charge and discharge volumes of energy storage projects range from CNY0.15 to CNY0.30 per kWh, with a subsidy period of two to three years in cities such as Wuhu in Anhui, Ningbo, and Wenzhou in Zhejiang.

The nationwide operational new energy storage capacity reached 73.76 million kW/168 million kWh by the end of 2024, about 20 times the level in 2020, at the end of the 13th Five-Year Plan period  and more than double compared with end-2023 levels, according to NEA data.

Data from the State Grid Corporation of China (SGCC) showed that the installed capacity of new energy storage in its operating area reached 58.61 million kW/137.86 million kWh by the end of 2024, more than double their 2025 levels.

During the 15th Five-Year Plan period (2026-2030), an additional 180 million kW of new energy storage is expected to be added, with an effective capacity of 160 million kW, covering 27.4% of the incremental demand for power generation.

ELECTROCHEMICAL ENERGY STORAGE DEVELOPMENT STANDS OUT
Currently, there are dozens of new energy storage technology routes in China, including advanced compressed air energy storage, flywheel energy storage, lithium iron phosphate batteries, vanadium redox flow batteries, and sodium-ion batteries, each suitable for different scenarios based on their characteristics.

Among them, electrochemical energy storage (such as lithium-ion batteries, lead-acid batteries, flow batteries, and sodium-sulfur batteries) has become the mainstream form of new energy storage due to its high efficiency, high power density, and high energy density.

The dominant role of lithium-ion battery storage has been further strengthened, with over 97% of the newly added new energy storage in 2024 coming from this type of storage.

There was a total of 1,473 operational electrochemical energy storage stations by the end of 2024, with a total installed capacity of 62.13GW/141.37GWh, according to data from the National Electrochemical Energy Storage Power Station Safety Monitoring Information Platform.

Among these, lithium-ion battery storage installed capacity was 135.76GWh, representing 96.03% of the total (with 99.91% of lithium-ion projects being lithium iron phosphate). However, lithium-ion batteries have relatively poor thermal stability and are prone to thermal runaway issues.

As the number of energy storage projects increases, higher requirements are placed on safety technology and management capabilities.

The platform data also showed that in 2024, China saw significant improvement in the operational performance of electrochemical energy storage compared to the previous year.

The average annual operation time was 1,649 hours, an increase of around 510 hours compared to 2023. The average annual utilization time was 911 hours, an increase of about 300 hours year on year.

The total charging electricity was 8,991GWh, and the discharging electricity was 7,980GWh, with an average conversion efficiency of 88.75%.

Energy storage is mainly used in three major application scenarios: the power generation side, the grid side, and the user side. Currently, energy storage stations on the user side are relatively profitable, while the profit margins for the power generation side and the grid side are limited.

Based on a typical 20-year lifespan and 350 charge-discharge cycles per year for batteries, the energy storage market needs to achieve a revenue of CNY0.42 per kWh, Zheng Yaodong, an expert from China Southern Power Grid said at the 3rd China Energy Storage Conference and Exhibition.

However, this is difficult to achieve under the current domestic market mechanism.

In the future, the development of new energy storage business models should follow a comprehensive market system approach, including the capacity market, energy market, and ancillary services market, to gradually improve and perfect the business models.

Insight article by Anita Yang

($1 = CNY7.30)