The new energy storage era is ushering in a golden age

“The Fifteenth Five-Year Plan” curtain has already been drawn open, and the golden age of the energy storage industry is surging forward.

“Ten years of wall-sitting, ten years of honing a sword. Now, China’s energy storage sector has achieved a key leap: the energy storage industry is moving step by step from policy-driven to market-driven, from mandatory capacity procurement to value creation. Energy storage has been deeply integrated into the new-energy revolution, becoming an important part of the new-type power system and moving to the very center stage of the energy system in the new era.” Zhongguancun Energy Storage Industry Technology Alliance Chairman Chen Haisheng said at the opening ceremony of the “14th Energy Storage International Summit” held recently that in 2026, the dimensions of competition in the energy storage industry will undergo new changes. From the past single-dimension contest centered on “hardware cost,” it will gradually shift to multi-dimensional competition around “full-lifecycle value-creation capability.”

“The Fifteenth Five-Year Plan” curtain has already been drawn open, and the golden age of the energy storage industry is surging forward. New-type energy storage has already entered the nation’s six major emerging pillar industries, serving as new productive forces for energy transition, and also a key support for the global artificial intelligence and large-model energy foundation. Looking ahead, the energy storage industry will comprehensively move into a new stage of high-quality development centered on “value reconfiguration, scenario innovation, and global win-win.”

From rapid scale-up to penetration across all scenarios

During the “Fourteenth Five-Year Plan” period, China’s energy storage development speed and scale far exceeded expectations. Liu Deshun, Chief Engineer of the National Energy Administration and Director of the Energy Conservation and Science & Technology Equipment Division, said that by the end of 2025, the installed capacity of newly built and operating new-type energy storage nationwide had reached 136 million kW, up sharply by 84% compared with the end of 2024. Compared with the end of the “Thirteenth Five-Year Plan,” it increased by more than 40 times, with installed capacity firmly ranking first in the world. At the same time, the average duration of energy storage rose to 2.58 hours. During the 2025 summer peak season, within the State Grid operating areas, the maximum dispatchable power of new-type energy storage exceeded 64 million kW, and the real-time maximum discharging power exceeded 44 million kW. The nationwide new-type energy storage equivalent utilization hours reached 1,195 hours, which is nearly 300 hours higher than in 2024. Energy storage has truly shifted from “demonstration running alongside” to “main force support.”

The energy storage technology roadmap has formed a “let a hundred flowers bloom” pattern, with multiple echelons advancing in parallel. Chen Haisheng said that according to 2025 industry data, the first echelon—pumped hydro storage and lithium batteries—has achieved large-scale applications; the second echelon—compressed air, flow batteries, lead-acid storage, and thermal and cold storage—is in the stage of being promoted and applied. For example, multiple 300,000 kW-class compressed air projects and 100,000 kW-class flow battery projects have already been put into operation. The third echelon—sodium-ion, flywheels, and supercapacitors—is transforming from demonstration to application. China’s energy storage technologies have shifted from “following” to “running in parallel,” and now have moved to “leading.”

Xiamen Kehua Digital Energy Technology Co., Ltd. President Cui Jian said that against the backdrop of wind-and-solar new energy gradually becoming the main component of the new-type power system, energy storage has changed from an optional “supporting role” to a “must-have” requirement for ensuring safe and stable operation of the grid. Energy storage is moving from being a supporting add-on for large bases toward full-scenario coverage combining centralized and distributed approaches, forming diverse integration models such as “solar-storage-charging,” “energy storage + hydrogen production,” “mining-area microgrids,” and “island microgrids,” thereby completely breaking down the internal boundaries within the power system.

Today, energy storage is accelerating into new business formats such as standalone energy storage power stations, distributed solar-storage carbon-neutral parks, intelligent computing centers, low-altitude economy supporting services, and port shore power. In the view of Xu Qingqing, Vice President of Sungrow Power Supply Co., Ltd. and President of its Energy Storage Business Division, energy storage has fully entered the “S+ energy storage” era, upgrading from a single energy storage energy-storage device to a system-level energy hub.

Entering the deep-water zone: core challenges must be tackled urgently

Despite remarkable achievements, for the energy storage industry to keep moving forward, it must directly face and resolve a series of industry pain points and challenges.

First, the market mechanisms and project management standards in the energy storage industry still need improvement. The latest data released by the Zhongguancun Energy Storage Industry Technology Alliance reflects hidden concerns in the industry. In 2025, the EPC construction cost of a 2-hour energy storage system dropped to 1043.82 yuan per kWh, a year-on-year decrease of 13%, and prices showed a volatile downward trend. Under “price-cutting involution,” if there is no mature market mechanism to support it, the economics of energy storage projects will face severe tests.

Xu Qingqing analyzed that how energy storage can profit is the core issue. Differences in the market size of electricity markets are significant across different regions. It is necessary to accelerate the transformation from a single energy storage energy-storage device to a system-level energy hub, and to build a diversified profit model of “capacity pricing as the floor, spot arbitrage as flexibility, and ancillary services as value-added.”

Second, the energy storage industry faces a dual test: a safety bottom line and technical maturity. The safety of energy storage systems is always the sword of Damocles hanging over the industry’s head. Chen Haisheng emphasized that safety remains a focal issue in the development process of energy storage, and domestic efforts place greater emphasis on end-to-end safety supervision.

In the view of industry insiders, how to ensure that energy storage does not cause safety incidents such as fires in large-scale, high-density integrated applications remains a threshold the industry must still cross.

Third, the energy storage industry also faces challenges of supply-chain reshaping and barriers to globalization. Shiyu Bo, Chairman of the China Energy Research Society, reminded that the global energy storage supply chain is currently shifting from pursuing globalization efficiency to pursuing regionalized safety. The acceleration of trends such as policy-driven enterprise localization and the multipolarization of supply chains raises higher requirements for Chinese energy storage companies’ ability to go global, their capability for localized operations overseas, and their ability to respond to international technology barriers.

Energy storage shows a reconfiguration of full-lifecycle value

Looking ahead over the next five to ten years, energy storage will no longer be merely a “component” of the power system, but will rise to become a core part of the national energy strategy and green development. Industry insiders believe that future energy storage development will show trends such as full-lifecycle value reconfiguration, AI empowerment reshaping system forms, and energy storage accelerating its ecosystem going global.

Chen Haisheng believes that energy storage will enter a new stage of value reconfiguration, making a strategic leap from “key support” to “core pillar.” This means that when assessing the value of energy storage in the future, it will no longer be only about its equipment construction cost, but about the multi-dimensional comprehensive contributions it makes to the system over the entire lifecycle of planning, construction, operation, and retirement—such as providing electrical energy, capacity, ancillary services, and value for the green electricity environment.

As the penetration rate of new energy approaches its limit, traditional “grid-following” energy storage will not be able to meet demand, and grid-forming and long-duration energy storage will rise. Cui Jian said that grid-forming technology gives energy storage the ability to autonomously construct the voltage and frequency and provide system support, which can solve balance problems lasting for multiple days or even across seasons. As a result, it evolves from a single-function device into a system-level asset integrating regulation, control, stability, and trading.

Chen Haisheng specifically mentioned that “AI + energy storage” is becoming a current hotspot in technical R&D. In the future, using AI to dispatch energy storage will maximize the value across the entire life cycle. In addition, with the rollout of capacity compensation mechanisms, the commercial early stage of long-duration energy storage such as flow batteries and compressed air is expected to arrive soon. It is expected that by 2030, the average cumulative installed duration will increase from the current 2.58 hours to 3.47 hours. It is especially important to note that the share of standalone energy storage has increased substantially to 61%; in the future, it will become an important main body, reconfiguring the core capability of the power system.

Even more worthy of high attention is that, with the explosion of AI computing demand, energy storage projects in artificial intelligence data center scenarios are accelerating their layout. Chen Haisheng judged: “Energy storage for artificial intelligence data centers will become the core support for computing infrastructure.” Demands for power that is energy-intensive and highly reliable will open up a trillion-level blue-ocean market for energy storage.

Chen Haisheng predicts that by 2030, China’s cumulative installed capacity of energy storage is expected to reach 370 million kW or more. This huge domestic base will provide the strongest backing for China’s energy storage technologies to move toward the world.

Liu Deshun said that the National Energy Administration will strengthen international exchanges in all directions and support Chinese enterprises to go global. Going forward, China’s energy storage enterprises going global will upgrade from simple “product exports” to “going global at an ecosystem level,” including “technology export, standards alignment, localized production, and services.”

From the “Fourteenth Five-Year Plan” period of building momentum and breaking the deadlock to the “Fifteenth Five-Year Plan” period of value reconfiguration, China’s energy storage industry is undergoing a great leap from quantitative change to qualitative change. 2026 will be a brand-new starting year for China’s energy storage to become mature and to head to the world.

Original headline: The energy storage industry shifts from single-dimension competition to multi-dimensional competition

By | This reporter, Su Nan

Produced by | China Energy News (cnenergy)

Edited by | Zhao Fangting