As the global energy transition reaches a critical juncture, the energy storage industry is emerging as a new frontier that attracts significant capital investment. A fierce competition for a trillion-dollar market has already begun. The industry is shifting from being policy-driven to market-driven, drawing substantial capital investments. At the national level, the “New Energy Storage Scale Construction Special Action Plan (2025-2027)” has been issued, which aims to achieve a nationwide installed capacity of over 180 million kilowatts by 2027, leading to direct project investments of approximately 250 billion yuan.
Against this backdrop, top investment firms such as Sequoia China, Hillhouse Capital, and Temasek are intensifying their involvement in the sector. Various forces, including industrial capital, state-owned funds, and cross-border capital, are rapidly entering the field. Consequently, the energy storage sector has become one of the most watched tracks in the secondary market. In 2025, China’s A-share energy storage index has been on the rise, with leading companies like CATL and BYD reaching record high market valuations. Specialized energy storage manufacturers, such as Kelon Electronics, have seen their stock prices rise by over 90% this year.
Indeed, cross-industry expansion has become a prominent feature of this wave of capital enthusiasm. Not only are established energy storage giants like CATL, BYD, and Sungrow making significant strides, but traditional energy companies, solar enterprises, and major tech firms are also venturing into the energy storage sector. Even tech giants like Tencent and Alibaba are making investments in the digitalization of energy storage through industrial funds.
It is noteworthy that, in the large-scale storage market, international markets have become the core growth engine, showing explosive growth in multiple regions. The performance of the U.S. market is particularly remarkable, with large-scale storage installations reaching 16.8 GWh in the first half of 2025, marking a 32% year-on-year increase. By the end of June, the cumulative registered capacity reached 65.1 GW, an 82% increase compared to the previous year. Additionally, the European large-scale storage market is also flourishing, with the installed capacity expected to be revised upward to 18 GWh in 2025, reflecting a year-on-year increase of over 120%. In the UK, the installed capacity of grid-connected energy storage systems grew by 14% in the first half of 2025, with a total of 6.324 GW/13.183 GWh of projects approved.
Technology mergers and acquisitions have also emerged as a vital strategy for capital to penetrate the energy storage market. Both CATL and Sungrow have utilized acquisitions to secure core technologies and overseas channels. Private equity funds are actively participating in this trend, integrating and building energy storage platform enterprises through mergers. Currently, the capital market’s financing channels remain open. In just the first half of 2025, over ten companies accelerated their capitalization processes, with the Sci-Tech Innovation Board, Growth Enterprise Market, and Hong Kong stock market becoming key destinations for listings. While these companies expand capacity through private placements, the bond market is also providing low-cost funding support for energy storage projects.
Despite the high enthusiasm for capital investment, the industry faces three significant challenges: First, excessive investment may lead to overcapacity, as the planned global storage battery production capacity for 2025 far exceeds market demand. Second, the technological pathways have yet to converge, posing route risks for capital investments. Third, trade barriers in overseas markets are intensifying, and geopolitical factors may impact investment returns.
While capital rushes in, it must remain vigilant against bubble risks and focus on value investment and long-term strategies. The influx of capital is accelerating the development and consolidation of the energy storage industry, and in this trillion-dollar “land grab,” only companies with core technologies, sound business models, and global capabilities will ultimately prevail in the market.
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Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/the-rise-of-energy-storage-a-new-investment-frontier-in-the-renewable-sector/
