China is taking significant steps to boost its new energy storage industry. On February 17, the Ministry of Industry and Information Technology, along with 7 other government agencies, issued the “Action Plan for High-Quality Development of the New Energy Storage Manufacturing Industry.” The plan aims to encourage regional diversification, improve resource efficiency, and unlock the full potential of the market.

As a key enabler of renewable energy integration, the new energy storage sector includes technologies for energy storage, information processing, and safety control. By 2027, the plan envisions a globally competitive industry, with an expanded network of leading enterprises. Key goals include aligning industry growth with market demand, enhancing product performance and safety, and broadening application areas across power, industry, energy, transportation, construction, telecommunications, and agriculture.

According to Zhu Keli, Executive Director of the China Information Association and Head of the National Research Institute of New Economy, developing the new energy storage industry will stimulate economic growth while advancing materials, equipment manufacturing, and storage solutions across the value chain.

Innovation Driving Industry Advancement

New energy storage refers to technologies other than pumped hydro storage that primarily store and release electricity. Similar to a large-scale “power bank,” these systems store surplus energy from wind and solar power and release it during peak demand, ensuring a stable power supply.

China’s new energy storage sector is experiencing rapid growth. As of the end of 2024, the country had a total installed new energy storage capacity of 73.76 gigawatts (GW) or 168 gigawatt-hours (GWh), a 20-fold increase since 2020 and a 130% rise from 2023.

However, intense price competition has led to challenges in maintaining sustainable growth and product quality. Zhu Keli emphasizes the need for deeper investment in fundamental research and technology breakthroughs. The government’s action plan supports advancements in multiple storage technologies, including lithium batteries, supercapacitors, sodium-ion batteries, and compressed air storage. The plan also encourages the development of next-generation storage solutions, such as hydrogen storage and hybrid energy storage systems.

To enhance safety and efficiency, the initiative promotes the integration of energy storage with advanced digital technologies, including artificial intelligence and digital twin simulations. It also focuses on strengthening supply chains for key components like power semiconductors, smart sensors, and high-efficiency power converters.

Strategic Industry Development in Key Regions

A well-structured industrial layout is essential for sustainable growth. The action plan encourages companies to establish facilities in regions rich in renewable energy and mineral resources, with strong infrastructure and transportation links. Key areas of focus include the Yangtze River Delta, Beijing-Tianjin-Hebei, the Greater Bay Area, Chengdu-Chongqing, Inner Mongolia, and the Taiwan Straits Economic Zone.

Local governments are also actively shaping the industry’s future. Since early 2024, multiple provinces and cities have introduced policies to promote new energy storage. For example, Beijing’s Carbon Peak Implementation Plan highlights the importance of advancing storage technology, while provinces such as Liaoning, Shanghai, and Chongqing have rolled out similar strategies to foster industry growth.

The plan also emphasizes resource security. Measures include supporting domestic exploration of lithium, cobalt, and nickel resources, improving supply chain coordination, and encouraging responsible overseas resource investments. Additionally, manufacturers are encouraged to adopt sustainable production methods, prioritize green design, and enhance recyclability.

Expanding Market Applications for New Energy Storage

The government is actively promoting wider adoption of new energy storage solutions. The action plan supports integrating storage with coal power plants for grid balancing and deploying storage in regions with abundant renewable energy but limited local consumption capacity.

A key focus is allowing independent energy storage providers to participate in the electricity market. This will enhance grid stability, optimize power distribution in densely populated and remote areas, and improve supply reliability.

On the consumer side, energy storage is being encouraged for critical industries such as data centers, telecom networks, industrial parks, and commercial facilities. The plan also promotes integrating solar power with storage systems in urban lighting, traffic management, smart carports, and rural infrastructure.

Looking ahead, the sector is set for strong expansion. According to a forecast by the Zhongguancun Energy Storage Industry Technology Alliance, China’s new energy storage capacity could reach between 116.3 GW and 131.3 GW by 2025, reinforcing its role as a cornerstone of the country’s renewable energy transition.