context: Earlier this year, a reform to market-based pricing of renewable power prohibited making energy storage an explicit prerequisite for project approval, grid connection or market entry. This effectively ended the mandatory pairing of renewables and storage, allowing storage to enter the market on a commercial basis. The effect of this reform is still yet to be seen. New energy storage in the form of lithium-ion batteries has been growing rapidly since 2021. By 2030, cumulative installed capacity could reach 291 GW in an optimistic scenario, according to the Zhongguancun Energy Storage Industry Technology Alliance.
The National Development and Reform Commission and NEA (National Energy Administration) released Special action plan for large-scale new energy storage development (2025–27) on 12 September, mapping out specific development pathways for new energy storage over the next three years
- by 2027, total installed capacity of new energy storage will reach 180 GW nationwide, driving around C¥250 bn in direct investment
- installed capacity of new energy storage has reached 73.76 GW as of 2024, meaning an additional 106.24 GW needs to be built between 2025–27
- lithium-ion battery storage remains the main technical pathway
- nearly 60 percent of the PRCs storage came from lithium-ion as of mid-2025, while pumped hydro accounted for around 37 percent
- molten salt thermal storage and flow batteries made up around 1 percent, compressed air, lead acid batteries and flywheels together accounted for under 0.5 percent
The target is largely in line with expectations, industry analysts told Caixin. At a press conference an NEA official explained the policy background, highlighting the rapid development of renewables while system load balancing and supply security pressures are intensifying. As a key flexible regulation source, new energy storage has become a necessary component of building a new power system. Clear measures are needed for expansion, tech integration and market mechanisms, they added.
Installing storage adds costs to generation projects, and many storage facilities have been underutilised, leading to complaints from producers under earlier mandatory storage policies. To address such issues, the plan encourages full participation in power markets, with 'renewables + storage' allowed to bid jointly as integrated entities in power trading.
New pricing mechanisms will be accelerated
- local authorities are directed to advance long-term spot market construction and develop rational charge-discharge pricing structures
- capacity pricing, already applied in pumped hydro and coal power, will be encouraged for other forms of energy storage
- energy storage will be allowed to participate in medium and long-term markets