BUSINESS

China Energy Storage Buildout Slows as Market Adjusts to End of Policy Mandate

Published: Aug. 28, 2026 10:59 p.m. GMT+8

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Battery storage cabinets at the No. 1 energy storage power station in Shizuishan, Ningxia. Photo: VCG

China’s newly commissioned new-type energy storage power capacity fell 18% in the first half of 2026 from a year earlier, as the sector adjusted to the removal of a government mandate requiring renewable power projects to pair generation with storage.

The decline marks a pivotal moment for an industry shifting from policy-led expansion to a more efficiency-driven, market-oriented model.

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China added 21.8 GW/58.6 GWh of new-type storage in H1 2026; power capacity down 18%, energy down 16% year-on-year.
Decline follows February 2025 scrapping of mandate requiring renewables to pair with storage, shifting sector to market competition.
Standalone storage led at 69.3% of installations; revenue models evolving, but trading returns face pressure from narrower spreads.

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What Happened When

February 2025：: The National Development and Reform Commission and the National Energy Administration issued a directive scrapping the rule requiring renewable energy plants to build supporting storage capacity.

Earlier in 2026：: A national framework was introduced formally recognizing the capacity value of energy storage, followed by provincial compensation policies in Gansu, Jilin, Shaanxi, Xinjiang, Hubei, Ningxia, and Qinghai.

2026 H1：: China's newly commissioned new-type energy storage power capacity fell 18% year-on-year to 21.8 GW (58.6 GWh), with new project numbers halving and standalone storage dominating at 15.1 GW (69.3% of installations).

AI generated, for reference only