An ‘overhaul in China’s electricity market is helping to make energy storage even more economically attractive at a time when demand worldwide is going through the roof,’ says a report in the South China Morning Post, ‘boosting China’s leading energy storage manufacturers to boom town’ status.
Chinese companies are projected to see a 75% rise this year in their export shipments for lithium-ion battery cells used for energy storage. They have supplied more than $65 billion worth of storage and EV batteries to date in the current year, solidifying their position in the market, which is crucial for wind and solar, and the electricity supply of data centres for artificial intelligence.
Sales Driven by Data Centres & Renewables
The rise in sales revenue is led by data centres and renewables in the home market, as well as Chinese reforms and subsidies that are driving the overall demand for energy storage. Global sales are also increasing with the increasing growth in data centres, a requirement to support the ageing European grid and China’s growing renewable energy sector in the Middle East. UBS last month boosted its projections for battery energy storage system installations in 2026 by 25 per cent.
The International Energy Agency predicts that investment in battery storage will increase by 16% in the year to come, reaching $66 billion. This will largely be tapped by companies in China, as although Tesla leads in the energy storage solutions industry, China paces the world in manufacturing the miniature batteries in these energy solutions.
All six of the top global providers of cells are from China, according to a list of the top providers from January to September compiled by the consultancy Infolink. Of the top 10 providers, the only one from outside of China is Japan’s AESC.
Chinese Companies Record Highest Ever Sales
EVE’s energy storage sales volume has registered an increase of 35.51% during the first three quarters compared with the same period of last year. Rept Battero has achieved a record-high third-quarter delivery volume for all batteries combined. The dominant EV companies, CATL, and BYD, have not disclosed the energy storage sales volume for the third quarter. However, energy storage constitutes a smaller portion of their sales compared with automotive batteries and EVs, though this trend is increasing.
However, according to Yan, Chinese companies are vulnerable to U.S. regulations on projects eligible for investment tax credits involving “foreign entities of concern,” which list China as one such entity.
China’s battery exports, including batteries for EVs, reached a record of 66.761 billion dollars in the first 10 months of the year, as indicated by Ember, an energy think tank. China’s batteries have been its most profitable clean tech exports since 2022, outperforming only solar photovoltaics.
Reforms Make Storage More Profitable
This is also expected to increase the following year as the consulting firm Infolink predicts the shipment of energy storage cells in the global market to reach as much as 800 gigawatt-hours, marking a sharp jump of between 33% and 43% over the expected figures of the current year.
China’s export of energy storage batteries and other batteries, excluding autos, was up 51.4% in the first 11 months compared to the same period a year ago, quicker than the 40.6% increase in EV batteries exported to the global market, the China Electric Vehicle Industry Technology Innovation Strategic Alliance said.
The world’s largest battery-based energy storage network already exists in China. It comprises approximately 40% of the world’s total. The requirement from local Chinese governments that the development of wind and solar power facilities must include battery storage has encouraged the development of battery storage in China.
Still, this large capacity for battery storage has remained idle since it has not proven economical. This structure is being transformed by changes in June to sell the generated power from newly developed projects in auctions based on market rates rather than a preset rate per unit. Because of this, the profitable option became to manage the storage station that makes money by charging when prices are low and discharging when prices are high.
Energy storage power plant operating times extended into the third quarter after the passage of the reforms and averaged 3.08 hours a day, up 0.78 hours from a year earlier and an increase of 0.23 hours from the last quarter. This information was from the China Electricity Council.
That is occurring under the circumstances of the latest government policy for an increase of almost all battery storage by 2027 for a total of $35 billion, in addition to the latest provincial-level subsidies. Since the end of 2024, China has introduced “capacity tariffs” for the first time among 10 Chinese provinces, besides other subsidies, according to Jefferies. It is “the most decisive policy shift on energy storage in over a decade,” wrote Jefferies analyst Johnson Wan in a note.
Stay updated with the recent business news from global markets by visiting Inspirepreneur Magazine.
