Analysis: China’s Global Energy Storage Push Accelerates Into Headwinds
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On March 31, Chinese energy storage company e-STORAGE secured an order for 420 megawatt-hours of battery systems for two projects in England and Scotland. Lee Dawes, chief operations officer of the projects’ owner Drax Group, explained that as the U.K. grid’s share of renewables rises, it needs storage to ensure power when wind and sunlight fade.
This deal marked a scorching first quarter for Chinese firms and a boom in overseas demand that industry players have described as explosive. In the first three months alone, Chinese energy storage companies secured 124 orders, totaling roughly 104.6 gigawatt-hours (GWh).
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- Chinese firms secured 104.6 GWh in 124 overseas energy storage orders in Q1 2026, up 27% YoY; China holds 90% global cell, 70% system market share.
- Surge driven by VAT rebate cut, renewables, AI data centers (15 GWh in 2025 to 69 GWh in 2027); BYD's 12.5 GWh Saudi deal.
- Challenges: EU regs, trade curbs, Mideast conflict; local plants in Spain, Egypt, Poland announced.
1. On March 31, e-STORAGE secured 420 MWh battery order for projects in England and Scotland; Drax Group's COO Lee Dawes noted rising UK renewables require storage for reliable power. [para. 1]
2. The deal highlights strong Q1 for Chinese firms, with 124 overseas orders totaling 104.6 GWh amid explosive demand. [para. 2]
3. Overseas orders reached 366 GWh in 2025 (+144% YoY), Q1 2026 up 27%, spanning over 60 countries including Europe, North America, Oceania, Middle East. [para. 3]
4. CNESA's Yu Zhenhua: Chinese firms key in global transition via full-chain advantages; China holds 90% global energy storage cell market, 70% systems. [para. 4]
5. Growth faces EU/US trade curbs like tariffs, local content rules; lacking localization risks hurdles, smaller firms may dump prices, causing shakeout. [para. 5]
6. Header: Driving the surge. [para. 6]
7. Q1 rush triggered by April 1 VAT export rebate cut for lithium batteries from 9% to 6%, prompting overseas rush orders and shipments. [para. 7]
8. Examples: BYD's 12.5 GWh Saudi grid project (world's largest, deliveries April 2025); Sungrow's 7.8 GWh grid-forming project in Saudi (also world's largest). [para. 8]
9. Core driver: energy security amid geopolitics, high oil/gas prices; renewables + storage enable independence, stabilize prices, boosting global demand. [para. 9]
10. Yang Bo (Hoymiles): Solar + storage drive new energy; essential for grid impacted by solar expansion across residential/C&I/large-scale. [para. 10]
11. Overseas energy storage market growth exceeded expectations. [para. 11]
12. AI data centers boost demand for fast-response storage for millisecond backup. [para. 12]
13. AI data center lithium shipments: 15 GWh last year, 69 GWh in 2027, >300 GWh by 2030 (GGII). [para. 13]
14. North America: AI power demand drives storage to ease grid constraints. [para. 14]
15. Southeast Asia: Fragmented demand; Malaysia's semiconductor factories spike electricity needs. [para. 15]
16. Indonesia/Philippines: Off-grid projects mix solar/storage/diesel; falling Chinese costs improve viability. [para. 16]
17. Header: Market disruption. [para. 17]
18. US-Iran conflict disrupts plans, e.g., Xinjiang Yumang's Li Yihuan canceled Dubai trip; Middle East key 2026 target. [para. 18]
19. Mysteel: Hormuz blockade fears raise shipping costs, 2-3 month delays; 2026 ME demand down ~15 GWh. [para. 19]
20. ME demand temporarily deferred, rebound post-conflict; firms pivot to Central Asia, Russia, Caucasus. [para. 20]
21. Xithium: 400M euro ($470M) Spain battery plant, ops 2027; Spain targets 22 GW storage by 2030. [para. 21]
22. Sungrow: Jan agreement for 10 GWh Egypt factory (2027); Feb 230M euro Poland plant (20 GW inverters, 12.5 GWh storage annually). [para. 22]
23. Header: EU compliance hurdle. [para. 23]
24. EU Batteries Regulation: Carbon footprint declaration, Battery Passport, due diligence (per Great Power's Wang Bing). [para. 24]
25. EU carbon rules for industrial batteries since Feb; supplier verification time-intensive, EU cert expected pre-June. [para. 25]
26. Passport/due diligence (2027-28): Full raw material-to-product traceability via scannable code, risks exposing core tech info. [para. 26]
27. Dilemma: Non-compliance risks carbon tariffs; compliance reveals proprietary data. [para. 27]
28. Beijing April 9 meeting: Urged power/storage firms to curb excessive competition, prevent overseas spillover. [para. 28]
29. Yu: Strengthen compliance (certs, carbon, local content), localize sales/service, diversify markets, use long-term contracts/hedging. [para. 29]
30. Shift from scale to quality, efficiency, value to seize global storage boom. [para. 30]
- e-STORAGE
- On March 31, e-STORAGE secured a 420 MWh battery systems order for two projects in England and Scotland, owned by Drax Group, to support U.K. renewable grid stability.
- Drax Group
- Drax Group owns two energy storage projects in England and Scotland, which secured a 420 MWh battery system order from e-STORAGE on March 31. COO Lee Dawes noted that the U.K. grid needs storage as renewables rise to ensure power when wind and sunlight fade.
- Saudi Electricity Co.
- Saudi Electricity Co. signed a contract with BYD Co. Ltd. in 2025 for a 12.5-GWh grid-scale energy storage project—the world’s largest—with deliveries starting in April 2025.
- BYD Co. Ltd.
- BYD Co. Ltd. signed a 12.5 GWh grid-scale energy storage contract with Saudi Electricity Co. in 2025—the world’s largest—with deliveries beginning in April that year.
- Sungrow Power Supply Co. Ltd.
- Sungrow Power Supply Co. Ltd. (300274.SZ) completed a 7.8 GWh grid-forming energy storage project in Saudi Arabia, the world’s largest of its kind. It signed a deal for a 10 GWh factory in Egypt’s Suez Canal zone (April 2027) and announced a €230M plant in Poland for 20 GW inverters and 12.5 GWh storage annually.
- Hoymiles Power Electronics Inc.
- Yang Bo, director and GM of Hoymiles Power Electronics Inc. (688032.SH), said at the 14th Energy Storage Conference: "Solar and storage are dual engines driving the new energy sector." Solar expansion impacts grids, making storage essential for residential, C&I, and large-scale uses. Overseas energy storage market growth exceeded expectations. (52 words)
- Xinjiang Yumang Logistics Technology Co. Ltd.
- Li Yihuan, head of Xinjiang Yumang Logistics Technology Co. Ltd., planned a pre-Lunar New Year trip to Dubai to survey the Middle East energy storage market but canceled it due to the U.S.-Iran conflict, shifting focus to Central Asia, Russia, and the Caucasus.
- Xiamen Hithium Energy Storage Technology Co. Ltd.
- Xiamen Hithium Energy Storage Technology Co. Ltd. announced a 400 million euro ($470 million) battery plant in Spain in March, expected to begin operations next year. Spain plans 22 GW of storage by 2030 for renewables.
- Scatec ASA
- Norway’s Scatec ASA signed an agreement in January with Sungrow and the Egyptian government to build a 10-GWh factory in the Suez Canal Economic Zone, slated for April 2027.
- Guangzhou Great Power Energy and Technology Co. Ltd.
- Guangzhou Great Power Energy and Technology Co. Ltd. (300438.SZ) product director Wang Bing noted EU Batteries Regulation requires Chinese exporters to declare carbon footprints, obtain Battery Passports, and perform due diligence. This demands full traceability from raw materials, risking exposure of proprietary tech, with carbon rules effective Feb 2025. (58 words)
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