Recently, China’s National Development and Reform Commission (NDRC) and National Energy Administration (NEA) jointly released the guiding document “Action Plan for Accelerating the Construction of a New Power System (2024–2027).”

The document proposes the further development of an energy storage market primarily based on lithium batteries, whilst embracing multiple technological pathways. Against the backdrop of China’s “dual-carbon” goals and the approaching 2030 CO2 emissions peak deadline, the installed capacity of renewable energy continues to grow, increasing pressure on peak shaving and power supply assurance.

As a critical flexible resource for renewable integration, energy storage has become essential for building China’s new power system. In this context, the Chinese government has introduced this document. This can be seen as both a follow-up to the removal of mandatory storage allocation policies and a bridge to the 15th Five-Year Plan, which is a comprehensive blueprint that has been formulated by the Chinese government since 1953, outlining the country’s key economic and social development goals and initiatives for each five-year period.

The document outlines a clear and comprehensive development plan for the energy storage market across five dimensions: application scenarios, dispatchability, technological innovation, standard setting, and market mechanisms. Energy storage development is positioned as an integral part of the new power system and must serve its overarching needs. Application scenarios are categorised into generation-side, grid-side, and other uses—including industrial parks, computing facilities, distributed photovoltaics, and communication base stations—with companies encouraged to innovate in business models to improve comprehensive energy utilisation efficiency.

Regarding market mechanisms, the document proposes, for the first time, the promotion of “new energy and storage” as integrated bidding entities participating in the electricity market. This approach draws from the mature models of solar and wind power, where project developers handle early-stage development and full-process management, whilst investors provide funding and compliance support. This measure is expected to weed out speculators in the storage market, leaving only players with compliant development capabilities.

In summary, China’s NEA has set a clear target to achieve 180GW of national energy storage installation capacity by 2027. However, as of H1 2025, the cumulative installed capacity of new energy storage in China had reached only 95GW, while the country’s total installed photovoltaic generation capacity had surpassed 1TW. Therefore, the next two years present a significant growth opportunity for both energy storage system integrators and battery manufacturers.