China has set a target to install over 180 GW of energy storage capacity by 2027, up from 95 GW as of June this year. The capacity addition will involve an investment of approximately RMB250 billion (~$35 billion).

The country’s National Development and Reform Commission has released the “Special Action Plan for Large-Scale Construction of New Energy Storage (2025–2027),” which will help China’s clean energy transition, enhance grid flexibility, and accelerate the commercialization of new energy storage technologies.

According to the document, lithium-ion batteries will remain dominant, while alternative technologies such as compressed air, flow batteries, sodium-ion, and flywheels will progress toward commercialization.

Emerging solutions, including solid-state, gravity, thermal, and hydrogen storage, will see demonstration projects.

The action plan envisages a diversified storage ecosystem to take shape with applications across power generation, grid, distribution networks, microgrids, virtual power plants, and vehicle-to-grid interaction.

Market mechanisms, business models, and standards will mature, with new energy storage actively participating in spot, medium, and long-term power markets, and ancillary service markets.

The action plan seeks to improve pricing mechanisms, reliability compensation, and charging/discharging price discovery.

China will also establish and refine technical standards, operating guidelines, grid access standards, safety regulations, emergency measures, and performance evaluation criteria; and strengthen its participation in international standardization.

The plan also encourages projects in desert areas and retired coal-fired thermal power plant sites.

In July, China Energy Engineering Corporation’s auction for 25 GWh of lithium-iron-phosphate (LFP) battery systems resulted in a record-low quoted tariff of CNY0.37 (~$0.051)/Wh, a 30% year-over-year decrease from 2024.

Global energy storage capacity additions are expected to grow by 35% in 2025 to 94 GW or 247 GWh, according to a BloombergNEF report.

Mainland China continues to account for the bulk of global energy storage demand, supported by regulatory requirements that mandate storage with utility-scale solar and wind projects, the report said.