China is rapidly advancing its battery-storage infrastructure to manage the increasing fluctuations in power from renewable sources such as wind and solar farms. The country’s new-energy storage capacity, predominantly using lithium-ion batteries, surged to 44 gigawatts by the end of June, marking a 40 percent rise since the beginning of the year. This growth surpasses the nation’s 2025 target and contributes to a global surge in energy storage, which has become the fastest-growing battery market, overtaking electric vehicles.
Despite the significant increase in storage capacity, much of it remains underutilized. In regions served by the State Grid of China, which covers over 80 percent of the country, energy storage systems averaged only 390 operational hours and 93 charge-and-discharge cycles in the first half of the year. These figures, though double those of the previous year, indicate that the systems are used only once every other day, leaving them idle 91 percent of the time.
The primary issue is a lack of incentives for frequent use. Most of China’s energy storage development is driven by provincial regulations that require large wind and solar projects to either build or lease storage capacity to gain approval. This approach motivates companies to install storage but doesn’t encourage frequent use.
To address this, China will need to implement additional power market reforms. Introducing variable electricity pricing, which many provinces are testing, could provide the necessary incentives for storage systems by enabling power trading opportunities based on fluctuating prices.
China’s clean energy sector is experiencing a boom, with new wind and solar installations matching last year’s record levels in 2024. Although the grid has managed to utilize most of this power so far, solar and wind curtailments increased slightly in the first half of the year but remain relatively low at 3 percent and 3.9 percent, respectively. As the generation of intermittent power increases, China will need to ensure that its battery storage systems are used more effectively to avoid potential grid challenges.
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