China's new-type energy storage sector has entered a phase of large-scale development, with cumulative installed capacity reaching 136 GW by the end of 2025, according to a report released by the National Energy Administration (NEA) on July 30.

The "China New-Type Energy Storage Development Report (2026)", compiled by the NEA, showed that installed capacity of new-type energy storage rose 84.3% year on year to 136 GW/351 GWh by end-2025, more than 40 times the level at the end of the 13th "Five-Year Plan" period. Globally, cumulative new-type energy storage capacity stood at approximately 280 GW, up about 67% year on year, with China accounting for roughly 50% of the world total.

In 2025, new-type energy storage installations surpassed the 100 GW mark for the first time, exceeding pumped-hydro storage capacity by more than twofold. Global new installations reached about 110 GW in 2025, up 52% year on year, of which China added approximately 62 GW, representing 56% of global additions.

Lithium-ion battery storage continued to dominate the technology mix, accounting for 96.1% of installed capacity. Equivalent utilization hours for new-type energy storage improved steadily, reaching 611 hours in 2023, 911 hours in 2024 and 1,195 hours in 2025.

The growth momentum has carried into 2026. As of end-June, China's cumulative installed new-type energy storage capacity reached 153 GW/396 GWh, up 61% year on year. Investment in the sector rose 74.3% in the first half of 2026 from a year earlier, becoming one of the main investment growth areas in the energy sector. Equivalent utilization hours in the first half of 2026 reached 573 hours in State Grid's service area, up 9 hours year on year, and 626 hours in China Southern Power Grid's service area, up 41 hours.

Despite rapid expansion, the industry faces significant challenges. Revenue for new-type energy storage stations remains heavily dependent on peak-valley price spreads in the electricity energy market, leaving operators exposed to spot price volatility without stable revenue mechanisms. Ancillary services markets offer limited products for storage, while capacity pricing mechanisms are still being rolled out. Some projects are poorly aligned with regional grid regulation needs, resulting in underutilization.

As of end-June 2026, total domestic power storage capacity reached 237.2 GW, with new-type storage accounting for 168.2 GW, or over 70% of the total. Industry analysts note the sector is transitioning from policy-driven to market-driven growth, with a combined revenue model of capacity pricing, energy arbitrage and ancillary services seen as the foundation for sustainable independent storage operations, though profitability pressures persist amid uneven market development across regions.

The 15th "Five-Year Plan" for new power system construction, jointly issued by the National Development and Reform Commission and the NEA, targets approximately 160 GW of new new-type storage installations during the 2026-2030 period, bringing total capacity to 300 GW by 2030. The plan also calls for about 80 GW of grid-side independent new-type storage capable of peak shaving, with equivalent peak-shaving duration targeted at four hours.

As the opening year of the 15th "Five-Year Plan" period, 2026 will focus on drafting a dedicated five-year plan for storage, advancing innovation demonstrations of core equipment and optimizing electricity market mechanisms.

China's new-type energy storage industry has moved from inception through expansion and now stands at a critical juncture of shifting from scale growth to value creation. Resolving deep-seated issues around profitability and market mechanisms while sustaining growth will determine whether the sector can achieve high-quality development.