Global Restructuring of Energy Storage by 2025: Policy Changes, Upgrades, and International Strategies

2025 Storage Industry Transformation: Deregulation, Upgrades, and Global Expansion

On February 2025, two national ministries in China issued Document No. 136, which eliminated mandatory energy storage requirements, signaling the end of a crude growth model characterized by heavy installations with minimal effectiveness. Prior to this change, regions such as Shandong and Sichuan saw less than 7% utilization of new energy storage projects, coupled with a flood of low-cost, low-quality equipment. With this deregulation, more companies are expected to focus on high-quality energy storage assets that are both functional and effective. This shift is pushing the industry back towards its market fundamentals. Following this, several provinces issued additional policies to reinforce the independent status of energy storage market entities. Initiatives such as pilot programs for energy storage capacity market trading and the establishment of multi-faceted value recovery mechanisms—including capacity leasing, spot trading, and ancillary services—are enabling the storage sector to showcase its economic value directly to the market.

On April 29, 2025, the same ministries released Document No. 394, which mandates the comprehensive acceleration of electricity spot market construction by 2025. By the end of 2025, it aims to achieve basic coverage of the electricity spot market and initiate continuous settlement operations. The issuance of Document No. 394 further underscores the significance of market-oriented mechanisms, guiding the optimal allocation of energy storage resources and transforming energy storage from a traditional “peak shaving and valley filling” tool into a “dynamic balancer” for the power system.

In May 2025, the National Energy Administration published a notice on enhancing the safety management of electrochemical energy storage. This notice emphasizes improving the inherent safety levels of batteries and refining the standard system, requiring the inclusion of battery cell traceability information in bidding evaluations. Previously, the East China region issued the strictest safety regulations, outlining a plan for enhancing the safety of electrochemical energy storage stations. By the end of 2025, hazardous production processes and related systems posing severe risks must be eliminated. Additionally, all existing electrochemical energy storage stations must complete safety upgrades by the end of 2026. Specific measures include stringent access requirements for energy storage stations, barring units with safety incidents from participating in construction for one year, enforcing product quality supervision, and enhancing design and fire safety reviews. These safety regulations are pushing the industry towards continuous technological innovation, allowing energy storage companies to move beyond price competition and focus on technological advancements.

Leading companies in the sector are capitalizing on this trend. For instance, Huawei has introduced a “three-layer protection” energy storage system, while Sungrow has developed “millisecond-level fault isolation” technology, facilitating a shift in the industry from “passive defense” to “active immunity.”

In a related development, on May 12, 2025, a joint statement from the China-U.S. Geneva Economic and Trade Talks was released, announcing the cancellation of 91% of tariffs. This marks the first substantial concession from both sides since the escalation of the trade war in April 2025. The previous high tariffs had severely hindered normal trade relations and disrupted international economic order. This joint statement signifies a crucial step towards resolving differences through equal dialogue, laying the groundwork for further cooperation. Reports indicate that in 2024, 57% of China’s energy storage battery exports were directed to the U.S., indicating a continued dependency on the Chinese supply chain in the short term. For the energy storage industry, this could herald a temporary boost, as exports from Chinese storage companies to the U.S. may see a short-term increase. While some U.S. stationary storage developers are eager to complete projects by 2025 to avoid an impending 17.5% increase in tariffs, many ongoing projects are in a holding pattern due to these uncertainties. Additionally, the U.S. lacks large-scale production capabilities for lithium iron phosphate, relying on China for 70% of its lithium battery imports. In 2024, exports of energy storage batteries from China to the U.S. will account for 24% of China’s total lithium battery exports, approximately $3.6 billion, with major purchasers including Tesla, Google, and Amazon. In the short term, the cessation of tariffs offers Chinese storage companies a more level playing field and preparation time for global market expansion.

With burgeoning overseas demand, many storage enterprises are now turning their focus to international markets to seek higher profit margins. Companies are showcasing their technological advantages in their global strategies. For example, Yiwei Lithium Energy has established a factory in Malaysia, while Sunwoda has invested in Thailand to circumvent tariff barriers. Sungrow is providing energy storage systems for photovoltaic projects in Japan, adopting a model of “Chinese technology + local manufacturing.” CATL has launched a 9MWh super-large capacity system, weighing only 36 tons per cabinet, compatible with global transport standards, and has maintained its position as the leading supplier in North America by partnering with Tesla. BYD has achieved over 25% market share in Europe’s home storage market, while Envision Energy has secured a £240 million contract in the UK, entering the grid-side frequency modulation sector. The energy storage industry is entering a new phase of multipolar competition, where companies must find the optimal balance between cost control and technological upgrades to secure their place in future contests.

As the domestic market evolves with stricter standards and faces uncertain competition, the energy storage sector is transforming from a “greenhouse flower” reliant on subsidies into a “towering tree” capable of weathering storms. While short-term inventory pressures and price fluctuations are unavoidable, reforms in the electricity market, breakthroughs in grid technology, and deepened global expansion will continuously drive sustainable development in the industry. The competition in energy storage is not a sprint but a long march. Future competition will clearly shift from price dumping to a comprehensive contest of technological barriers, ecological collaboration, and global operations.