China’s Power Market Reforms Ignite Global Boom in Energy Storage Exports
China’s overhaul of its electricity market is transforming the economics of power storage, fuelling a rapid rise in exports from the country’s dominant energy storage manufacturers. As global demand for reliable power surges, especially from renewable projects and data centres, Chinese firms are seizing the moment.
According to industry estimates, Chinese manufacturers are set to record a 75% increase in global shipments of lithium-ion battery cells for energy storage this year. Combined exports of energy storage and electric vehicle (EV) batteries have already surpassed $65 billion, reinforcing China’s leadership in a sector crucial for supporting wind, solar, and artificial intelligence (AI) infrastructure.
Rising Demand at Home and Abroad
The current boom stems from a combination of domestic policy support and international market demand. Within China, new electricity reforms and government subsidies have made energy storage more profitable. Abroad, the rapid growth of AI-driven data centres and the need to stabilise ageing power grids in Europe are accelerating purchases of storage systems.
“Leading energy storage cell makers are fully booked, with many factories working double shifts to meet demand,” said Cosimo Ries, an analyst at Trivium China. “It’s one of the biggest surprises of the year in China’s energy space.”
UBS recently raised its 2026 forecast for global battery energy storage installations by 25%, while the International Energy Agency expects global investment in battery storage to climb 16% this year to $66 billion. Chinese companies are likely to capture much of that growth, as they dominate cell production even though Tesla leads in complete energy storage systems.
Chinese Firms Cement Global Lead
All six of the world’s top energy storage cell suppliers — CATL, HiTHIUM, EVE Energy, BYD, CALB, and REPT BATTERO — are Chinese, according to consultancy Infolink. Of the top 10, only Japan’s AESC is not based in China. EVE Energy’s storage sales volumes jumped over 35% in the first nine months of the year, while REPT BATTERO posted record-high quarterly shipments.
“Pairing solar with storage has effectively become the only solution for meeting U.S. AI data-centre power needs,” said UBS analyst Yishu Yan. However, he warned that Chinese producers face risks from U.S. restrictions tied to investment tax credits for projects involving “foreign entities of concern,” which include China.
Market Reforms Reshape China’s Energy Sector
China’s battery exports hit a record $66.76 billion in the first ten months of the year, making batteries its most valuable clean-tech export since 2022. Consultancy Infolink predicts global energy storage cell shipments could reach 800 gigawatt-hours next year — a jump of up to 43%.
China already operates the world’s largest battery energy storage fleet, accounting for around 40% of the global total. This expansion has been driven by provincial mandates requiring storage for new wind and solar projects. Until recently, however, much of this capacity was underused due to low profitability.
That changed after June’s reforms, which replaced fixed-rate pricing with market-based auctions. The shift allows operators to earn by buying electricity when prices are low and selling when prices rise. As a result, energy storage plants operated longer in the third quarter, averaging 3.08 hours per day — up nearly 0.8 hours from a year earlier, according to the China Electricity Council.
A Decisive Policy Shift
The government has since launched a $35 billion plan to nearly double national battery storage capacity by 2027. Ten provinces have introduced new tariffs and subsidies, including capacity payments for standby power.
Jefferies analyst Johnson Wan described the reforms as “the most decisive policy shift for energy storage in over a decade,” signalling a new phase of sustained growth for China’s battery industry.
with inputs from Reuters
