Electrochemical Energy Storage in China: 2025 in Review

New-type energy storage has become a pillar of China’s power system as the share of solar and wind keeps rising. Since 2024 it has been mentioned in the Government Work Report three years in a row, and in 2026 it was officially named one of six new pillar industries. The China Electricity Council report sums up 2025: growth, prices, utilization, revenues and safety.

Scale: 40-fold growth in five years

By the end of 2025, China’s operating new-type storage capacity reached 136 GW/351 GWh. That is more than 40 times the level at the end of the 13th Five-Year Plan and 84% more than a year earlier. China is firmly the world leader by installed capacity.

The backbone is electrochemical storage. According to the CEC, there are 1,998 stations with a total of 109.29 GW/276.22 GWh, equal to 2.81% of the country’s total generating capacity and 5.73% of its renewable capacity. In 2025 alone, 525 stations with 47.16 GW/134.85 GWh went into operation, up 27% year over year.

• Geography. Ten regions led by Inner Mongolia and Xinjiang accounted for 87% of 2025 additions. Each of these two regions now has 15 GW or more.
• Where storage sits. 62.10% of capacity is on the grid side, 35.58% on the generation side and 2.32% on the customer side.
• Standalone stations became the main growth engine: 66.92 GW in total, 32.33 GW added in the year (+39%), or 69% of all additions.
• Storage co-located with solar and wind (36.83 GW) added 12.60 GW, 4% less than a year earlier, after mandatory pairing was abolished.
• Larger projects. Stations of 100 MW and above made up 81% of additions; their share of total capacity grew from 25% in 2021 to 72%. The industry has entered the “GWh era”.
• Discharge duration averaged 2.53 hours (+0.25 h). Systems of 4 hours or more reached 28.42% of capacity, up 12 percentage points in a year.

Policy: from mandates to the market

2025 marked the shift from policy-driven to market-led development. Key decisions:

• in February 2025, the requirement to pair new solar and wind projects with storage was abolished;
• in August, a large-scale buildout plan for 2025-2027 set a target of at least 180 GW of new-type storage by 2027;
• in January 2026, standalone grid-side storage was included for the first time in the national capacity payment system, pegged to capacity payments for coal-fired plants.

Regions calculate capacity payments differently. Most pay per kilowatt per year: Gansu 330 yuan, Zhejiang 170, Hubei and Ningxia 165, Hebei and Guangdong 100. Inner Mongolia (0.28 yuan) and Xinjiang (0.128 yuan) pay per kilowatt-hour discharged, while Shandong built compensation into its spot market.

By the end of 2025, spot markets operated in 25 regions covering 30 provinces, six of them in formal operation. At the same time, the familiar business of peak-valley arbitrage is shrinking: the national average maximum peak-valley spread fell 9.4% to 0.616 yuan/kWh. From March 2026, time-of-use tariffs are no longer set administratively for direct market participants, ending a policy in place for more than 40 years. Revenues of commercial and industrial storage will depend on real supply and demand.

Technologies and prices

Lithium-ion batteries account for 97.75% of the energy capacity in operation, and almost all of it (99.96%) is lithium iron phosphate. Flow batteries hold 1.10%, lead-acid and lead-carbon 0.90%, and sodium-ion 0.10%.

• Third-generation cells reach 500 and even 600 Ah, an energy density above 430 Wh/L and a cycle life of up to 15,000 cycles.
• Cells have cost 0.3-0.4 yuan/Wh since 2024. Average winning bids for lithium iron phosphate systems in 2025 were 0.715 yuan/Wh for 1-hour systems, 0.554 for 2-hour and 0.479 for 4-hour systems.
• Sodium-ion systems got cheaper but remain more expensive than lithium: 0.81 yuan/Wh on average.
• Vanadium flow systems fell below 2 yuan/Wh for the first time (2.28 on average), and a 1-yuan threshold is expected by 2030. In September 2025, the world’s first GWh-scale flow battery system started operating in Aksu, Xinjiang.

How the stations operate

Utilization rose markedly. In 2025, an average electrochemical station operated 1,940 hours (+291 h versus 2024), completed 248 equivalent cycles, or one full cycle about every day and a half, and its utilization index rose to 49% (+8 percentage points).

• standalone stations: 299 cycles, utilization index 60%;
• storage at solar and wind farms: 199 cycles, 40%, as many were built just to meet requirements;
• storage at thermal plants: 918 cycles, about 2.5 per day, providing joint frequency regulation;
• commercial and industrial: 341 cycles, about one per day, index 63%.

The average conversion efficiency was 89.23%, and the overall efficiency of grid-side storage was 82.21%. Newer stations are more efficient than older ones.

What a 100 MW/200 MWh station earns

The profitability of standalone storage depends above all on local policy and market maturity. The report gives 2025 revenues of a typical station in seven provinces:

• Guangdong: about 60.78 million yuan, including about 53.32 million from frequency regulation;
• Western Inner Mongolia: about 44.68 million, split almost evenly between capacity compensation and the price spread;
• Gansu: 37.55 million, including 22.13 million from capacity leasing;
• Jiangsu: 27.25 million;
• Shandong: 24.88 million, about half from capacity leasing;
• Hebei: 23.13 million;
• Ningxia: 19.14 million, mostly from peak-load regulation.

The standard package is becoming a mix of capacity payments, market trading, ancillary services and support measures.

Safety

There were no major accidents at Chinese stations in 2025, and the availability factor reached 0.98. There were 1,922 unplanned outages lasting 34.62 hours on average. More than 75% of them were caused by the quality of key equipment, systems, integration and installation. Stations older than two years stop more often: 2.25 times on average versus 1.75 for newer ones.

Globally, 2025 was a period of high accident rates, with about 20 fires at storage facilities, including the Moss Landing station in California and a Tesla Megapack site in Boulder City, Nevada. According to the U.S. Electric Power Research Institute (EPRI), the three main drivers of thermal runaway are battery management system failure, cell-to-cell variation and incorrect operating parameters.

The industry is responding with standards: by the end of 2025 there were about 50 national and more than 70 industry standards, including 9 national and more than 20 industry standards adopted during the year.

What to expect in 2026

• China’s electrochemical storage capacity will exceed 165 GW.
• Average discharge duration will exceed 2.8 hours, and the share of 4-hour-plus systems will keep growing.
• Grid-forming storage is scaling up: in December 2025, a 1 GW/4 GWh project in Aronqi, Inner Mongolia, set a world record, and two national standards for grid-forming converters are expected in the second half of 2026.
• Hybrid stations are spreading: lithium plus sodium, electrochemical storage plus flywheels.
• Artificial intelligence, big data and digital twins will enter planning, dispatch and early fault warning.

The report’s conclusion: the industry has entered a stage where policy provides baseline support, the market is the driving force and reliability comes first.