Market update · Asia-Pacific
China’s Energy Storage Capacity Reaches 167 GW with Improved Utilization
China's new-type energy storage capacity has grown significantly, reaching 167 GW/435 GWh by September 2026, marking a 63% year-on-year increase. This growth is accompanied by longer storage durations and improved utilization rates, supported by government policies and technological advancements. The market structure is evolving with increased independent storage facilities and larger projects, while lithium-ion batteries remain dominant. Storage plays a critical role in balancing renewable-rich grids, exemplified
SolTraCo market update · · 3 min readRapid Growth in Energy Storage Capacity
China’s operational new-type energy storage capacity reached 167 GW/435 GWh at the end of September 2026, representing a 63% increase compared to the previous year. This growth corresponds to a net capacity increase of approximately 31 GW/84 GWh during the first nine months of 2026.
The category of new-type energy storage includes electrochemical, compressed-air, and other emerging systems, excluding conventional pumped hydro storage.
Improved Utilization and Market Dynamics
Average storage duration has increased, with equivalent utilization hours reaching around 915 hours during the first nine months of 2026, an increase of about 10 hours compared to the same period in 2025. These improvements indicate that expansion is driven by enhanced system configuration and utilization, not just capacity growth.
Independent energy storage facilities accounted for 51.2% of cumulative installations in 2025, with projects rated 100 MW or above representing 72% of installed capacity. Lithium-ion batteries dominate the market, comprising approximately 96% of new-type storage capacity, while other technologies like compressed-air and flow batteries are gradually gaining presence.
Policy Support and Grid Integration
The rapid development of new-type storage is supported by government policies, technological innovation, industrial supply chains, and increasing demand for power system flexibility. Market reforms are enabling independent storage operators to generate revenue from electricity trading, ancillary services, and capacity remuneration.
In renewable-rich grids such as western Inner Mongolia, storage capacity of 20.47 GWh supplied up to 12.25 GW during emergency dispatch, meeting 33% of the grid’s electricity demand at that time. This demonstrates storage’s critical role in balancing electricity systems with high renewable penetration.
Sources
This update is an original SolTraCo synthesis of the linked industry sources. Reported facts and commercial interpretation are kept separate. It does not contain confidential deal information and is not investment, legal or technical advice.