China is accelerating the development of energy storage.
The Chinese energy sector is currently undergoing the largest transformation in its history. The Special Action Plan for Large-Scale Construction of New Energy Storage (2025–2027), presented in September 2025, is a document defining a new development trajectory for energy storage. The plan assumes that by 2027 the country will increase its new energy storage capacity (primarily battery-based, excluding pumped hydro storage) to 180 GW, nearly double the current level.
Current pace of development
China has already exceeded its own targets. The 30 GW goal for 2025 was achieved two years early, and in 2024 alone, 37 GW / 91 GWh of new energy storage was added. By mid-2025, the total capacity of new storage systems in China exceeded 100 GW, surpassing the growth of pumped hydro capacity for the first time.
The plan, prepared by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA), aligns with China’s “dual carbon peak” goals. The increasing share of renewable energy requires flexible resources capable of balancing supply and demand fluctuations. In this environment, energy storage is no longer an optional addition but becomes a fundamental element of power system security.
End of rigid mandates, beginning of market mechanisms
Until recently, energy storage development in China was mainly supported by central mandates, requiring storage to be connected to renewable energy projects (often 10–20% of installed capacity). In 2025, this obligation was removed, and the government shifted focus to market-based incentives: tariffs, payments for system services, and participation in capacity and balancing markets.
The Action Plan identifies three main development areas:
- Generation side: large energy storage bases at wind and solar farms, supporting coal plants in regulatory mode.
- Grid side: deployment of storage at key transmission points and in distribution networks.
- End-use applications: industrial parks, data centers, distributed PV installations, and telecom base stations.
Standardization, innovation, and efficiency
The plan emphasizes improving storage utilization efficiency, project standardization, and implementing innovative business models. This is intended to facilitate technology scaling and increase operational safety.
The NEA also plans to accelerate the creation of an integrated national energy market, including spot, medium- and long-term, and system services markets. Key mechanisms include:
- joint auctions and settlements for “renewables + storage” projects as a single market entity,
- remuneration for flexibility services, including spinning reserves, frequency regulation, and inertia support,
- development of transparent pricing mechanisms for charging and discharging energy.
According to Chinese authorities, implementing the plan will generate investments of around 250 billion yuan (approximately 35 billion USD) over three years. This initiative could dominate the global energy storage technology market. China is already the world’s largest producer of lithium-ion batteries and a leader in the supply chain for raw materials and components.
Source: OilPrice