China’s energy storage capacity using new technologies, such as lithium-ion batteries, tripled in the first quarter of 2024. Tech giants Tesla and Contemporary Amperex Technology (CATL) are investing in the sector, driven by China’s 2060 carbon-neutral goal and strong policy support.
The country’s total capacity in the “new type” energy storage sector surpassed 35 gigawatts (GW) by the end of March. This marks a 12% increase from the end of 2023 and a 210% increase from the same period last year, according to China’s National Energy Administration (NEA).
More than half of this capacity comes from large-scale energy storage projects, each with a capacity exceeding 0.1GW. Northwestern China, rich in wind and solar energy, accounts for nearly 30% of the nation’s operational energy storage capacity, the NEA reported.
These projects are essential to ensure a steady power supply when generation from sources like wind and solar decreases. The need for such storage is growing as China’s renewable energy capacity exceeded 1,450GW by the end of last year, which is more than half of the country’s total installed power generation capacity, according to the NEA.
China aims to have 80% of its total energy mix from non-fossil-fuel sources by 2060.
“New-type” energy storage includes batteries and other technologies like electrochemical, compressed air, flywheel, and thermal energy storage, excluding pumped hydro storage. Lithium-ion batteries made up 97% of China’s operational energy storage capacity by the end of 2023, with other emerging technologies accounting for the rest, the NEA said.
The National Development and Reform Commission released an action plan in 2022 to develop new-type energy storage by 2025, aiming for large-scale commercialization by then. Over 20 provinces and cities in China have introduced local energy storage plans, according to the NEA.
State-owned enterprises and industry leaders are investing in this growing sector. Last month, state-owned China Southern Power Grid launched the country’s first large-scale energy station using sodium-ion batteries in the Guangxi autonomous region. This project could significantly impact the clean-energy industry, as sodium-ion batteries are seen as a promising alternative to lithium batteries.
In Shanghai, Tesla is building a production plant for its Megapack, a large, stationary lithium-ion battery for power-storage stations. This factory will be Tesla’s first Megapack plant outside the United States, with mass production expected to begin in early next year. Tesla’s founder Elon Musk stated that the growth of their energy storage business will outpace its car business in 2024. Each Megapack can store enough energy to power 3,600 homes for one hour, and the Shanghai factory is expected to produce batteries with a total energy storage capacity of 40GWh annually.
CATL, Tesla’s battery supplier and the world’s largest EV battery manufacturer, is also a key player in China’s energy storage sector. In April, CATL launched the world’s first mass-producible energy storage system that promises zero capacity loss for five years.
By 2030, the global energy storage sector is projected to reach a total capacity of 137GW, with China expected to be the largest regional market, accounting for more than a third of global capacity, according to BloombergNEF.