Navigating the Booming Energy Storage Industry: Balancing Policy Benefits and Market Challenges

The energy storage industry is experiencing significant growth, driven by both policy incentives and market challenges. On April 10th, the 13th International Energy Storage Summit and Exhibition (ESIE2025) opened in Beijing. At this exhibition, numerous participating companies showcased their latest achievements and innovations in energy storage technology. From advanced battery products to efficient flywheel energy storage technologies, and from intelligent energy management systems to diverse energy storage application scenarios, the vitality and potential of the energy storage industry were clearly on display.

“At ESIE2025, we released the <b>BM2T Battery Management Technology White Paper</b>, introducing new ideas aimed at breaking the traditional extensive battery management approach,” said <b>Zhou Jianjie</b>, Chief Technical Expert from <b>Sunwatt Power Co., Ltd.</b>. He emphasized that batteries are not synonymous with energy storage systems; understanding, managing, and utilizing batteries effectively is essential for safer, more efficient, and longer-lasting energy storage.

Under the guidance of the <b>"dual carbon"</b> goals, China’s energy storage industry is witnessing rapid growth. The unique advantages of energy storage technology are playing a critical role in advancing the new power system, contributing significantly to the country’s energy transition and green development.

As the construction of new power systems progresses vigorously, the integration of renewable energy sources like solar and wind power into the grid, along with increasing electricity demand, poses unprecedented challenges to the stability and reliability of traditional power systems. At this pivotal moment, energy storage technology is emerging as a key support force to resolve many issues facing the power system. “During periods of excess electricity, energy storage technology can efficiently store surplus energy. Conversely, during shortages, it can rapidly release energy to balance supply and demand, significantly enhancing the stability and reliability of the power system,” explained <b>Chen Zhiyuan</b>, Head of the Solutions Department at <b>Xi'an Weiguang Energy Technology Co., Ltd.</b>.

Recent years have seen remarkable advancements in energy storage technology, with its commercial applications maturing. In February of this year, the <b>Ministry of Industry and Information Technology</b> and seven other departments jointly issued the <b>Action Plan for High-Quality Development of New Energy Storage Manufacturing</b>, providing a clear direction for the future of China's new energy storage manufacturing industry. Furthermore, a notification released in January by the <b>National Development and Reform Commission</b> and the <b>National Energy Administration</b> clarified that energy storage configuration should not be a prerequisite for the approval, grid connection, or online operation of new energy projects. This marks the conclusion of the controversial “mandatory energy storage for new energy” policy.

During the exhibition, <b>Han Jingtao</b>, Vice President of Products at <b>Guoneng Rixin Technology Co., Ltd.</b>, stated that the end of the mandatory energy storage policy has removed the previous linkage between energy storage configurations and new energy project approvals, offering more flexibility for the development of new energy projects. This policy adjustment allows projects to autonomously choose whether to incorporate energy storage facilities based on their specific needs and situations, ultimately lowering investment costs and enhancing economic benefits.

Guided by these policies, the new energy storage manufacturing industry is expected to accelerate technological innovation and industrial upgrades, improving product performance and reliability, reducing production costs, and enhancing market competitiveness. According to the <b>Energy Storage Application Branch of the China Chemical and Physical Power Industry Association</b> (CESA), a total of 58 policies related to energy storage were issued in February 2025, covering various areas such as finance, electricity market participation, renewable energy storage, and charging facilities.

However, beneath this thriving surface, there are still concerns. Energy storage companies face challenges such as rapid capacity expansion, intense price competition, and profitability difficulties. The industry requires further self-discipline and overall planning on the path of energy storage technology innovation and commercialization. <b>Si Peiyuan</b>, Director of the Membership Department of the <b>China Electric Power Equipment Management Association</b>, noted that companies must enhance their management, reasonably control capacity expansion, and avoid harmful competition. While China has made some achievements in energy storage technology research and development, further improvements are necessary in critical performance indicators like energy density, cycle life, and safety of storage batteries.

Amidst these changes, the energy supply-demand landscape in China has dramatically transformed, leading to profound adjustments in the power generation structure. The share of thermal power, once dominant, has steadily declined, while the total installed capacity of renewable energy has surged, increasingly matching thermal power capacity. This energy transition presents unprecedented opportunities and challenges for the energy storage industry.

Financial reports from leading energy storage and power battery companies reveal the industry's development dynamics. Major companies are actively investing in energy storage technologies and increasing R&D efforts to achieve breakthroughs in key metrics such as battery energy density, charge-discharge efficiency, and cycle life. As the market share of energy storage expands, numerous companies are entering the field. Notably, despite record high energy storage installation capacities, many energy storage stations remain underutilized. According to statistics from the <b>China Electricity Council</b>, the overall average utilization index of renewable energy storage reached 32% in 2024, yet this is still significantly lower than the 52% utilization rate of grid-side energy storage, indicating room for improvement in the utilization of renewable energy storage stations.

Furthermore, competition within the energy storage sector has intensified. As lithium carbonate prices continue to drop, the prices of energy storage cells have also decreased. To capture market share, some leading companies have begun pushing for drastic cost reductions in lithium battery production and further price cuts through enhanced management of non-productive materials. Participating companies at ESIE2025 presented their solutions in the competitive landscape, seeking to differentiate themselves.

According to Zhou Jianjie, it is crucial for the energy storage industry to quickly rectify the current chaotic and low-price competition. He emphasized the need to focus on safety, efficiency, and user-friendly solutions. <b>Sunwatt Power</b> is collaborating with relevant industry organizations to promote the standardization of product specifications, testing norms, project implementation, and grid acceptance processes. Additionally, energy storage companies should embrace market-oriented reforms. With the removal of mandatory energy storage, the demand for energy storage is shifting from policy-driven to value-driven. Companies need to optimize trading strategies in the electricity spot market and enhance their software capabilities.

<b>Liu Zhi</b>, Deputy Chief Engineer of <b>Huarui Wind Power Technology Group Co., Ltd.</b>, expressed that the energy storage industry should actively respond to policy changes and fully support the comprehensive entry of renewable energy into the electricity market. Leveraging years of experience in product and operations within the renewable energy sector, the company is exploring deep technical developments and product innovations in wind-storage integration to optimize joint dispatch and increase trading profits. After entering the era of autonomous energy storage configuration, they are actively exploring new types of energy storage batteries to better align with grid demands and reduce energy storage costs.

<b>Lu Li</b>, Senior Director of Strategic Marketing at <b>Shenzhen Yingfeiyuan Technology Co., Ltd.</b>, stated that the company's annual R&D investment exceeds 10% of its sales revenue, focusing on core technologies and applications in digital energy, continuously delving into the core technology system for electric energy conversion and establishing a robust technological “moat.”

At the ESIE2025 exhibition and forums, many industry experts echoed the sentiment that it is essential to deepen the marketization process of energy storage. Strategies such as leveraging hardware and software integration, increasing R&D investments, and broadening the price fluctuation range in the spot market can help uncover profitability in energy storage projects, thereby enhancing companies' core competitive advantages in this new era of autonomous energy storage.