China’s Battery Storage Eyes Greater Efficiency

China now operates the world’s largest fleet of battery energy storage systems, and analysis indicates they could shift an additional 23 terawatt-hours of clean electricity in 2025 if utilized to their full potential. The country rapidly expanded its battery capacity, exceeding the full-year additions of the United States.

This growth was initially driven by mandates requiring co-located storage for wind and solar projects, reducing energy waste. However, China is now shifting focus from simply adding capacity to maximizing the use of existing batteries.

Standalone batteries, those connected directly to the grid, are utilized more effectively than those paired with renewable energy sources, showing a significant gap in usage cycles. Closing this gap and optimizing battery use could unlock substantial benefits for the power system.

Policy changes are underway to support this transition, including extending capacity remuneration to standalone batteries and piloting joint market clearing for spot and ancillary services. The success of these efforts will determine if China can fully leverage its battery fleet to support a grid increasingly reliant on renewable energy.