China could shift an additional 23 TWh of clean electricity annually by improving the utilisation of its utility-scale battery energy storage systems (BESS), according to a new analysis by Ember.
The report found that while China now operates the world’s largest battery energy storage fleet, significant untapped potential remains. If the country’s battery systems were utilised more efficiently, they could transfer substantially more renewable electricity to periods of peak demand, strengthening grid flexibility and supporting the country’s energy transition.
China continued its rapid battery storage expansion throughout 2025. In December 2025 alone, the country added 18.76 GW/65.46 GWh of new energy storage capacity, exceeding the total annual battery storage additions in the United States, the world’s second-largest market.
By the end of 2025, China accounted for more than half of global battery energy storage capacity, while installed lithium-ion BESS capacity reached nearly 150 GW by the first quarter of 2026. In June 2026, the Chinese government increased its 2030 “new energy storage” target to 300 GW, further reinforcing its long-term storage ambitions.
According to Ember, the rapid deployment of battery storage has largely been driven by policies requiring new wind and solar projects to install co-located battery systems to reduce renewable energy curtailment and improve grid integration.
However, the report noted that policy reforms are now shifting the market toward greater operational flexibility. China ended mandatory renewable battery co-location requirements in February 2025 under Document 136, while Document 114, introduced in January 2026, extended national capacity remuneration to standalone battery storage projects, creating additional revenue opportunities.
Ember found that battery utilisation rates have more than doubled between 2022 and 2025. Despite this improvement, renewable co-located battery systems continue to lag standalone storage projects by approximately 100 operating cycles per year.
Unlike co-located batteries, which primarily support individual renewable projects and have limited participation in electricity markets, standalone battery systems are dispatched directly by grid operators to respond to system-wide demand and benefit from more diversified revenue streams.
The report estimates that increasing annual utilisation of renewable co-located battery systems by 100 additional cycles could enable the transfer of approximately 9.5 TWh of electricity each year, equivalent to Thailand’s annual solar power generation in 2025.
Under a more optimized scenario, where both standalone and co-located battery systems operate at around 350 cycles annually, China’s battery fleet could shift an additional 23 TWh of clean electricity each year—enough to meet Singapore’s electricity demand for approximately five months.
Ember also highlighted a structural shift within China’s battery storage market. Between January and April 2026, standalone battery projects accounted for 84.7% of newly installed utility-scale BESS capacity, while renewable co-located systems represented just 8.4%, reflecting the sector’s transition toward market-driven deployment.
The report noted that battery energy storage systems play multiple roles in modern electricity grids, including balancing supply and demand, reducing renewable energy curtailment, improving dispatchability, supporting grid stability, and providing emergency backup services.
Ember said continued growth of China’s battery storage sector will depend on further electricity market reforms, including stronger capacity pricing mechanisms, expanded participation in ancillary service markets, and tariff structures that better recognize the operational value of battery storage. According to the report, enabling battery projects to access multiple revenue streams will be critical to sustaining long-term investment beyond capacity expansion alone.
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