BEIJING, Aug. 5, 2026 — China has formally placed battery energy storage at the core of its renewable energy strategy for the next five years, signaling a structural shift in how the world's largest electricity market plans to balance a grid increasingly dominated by wind and solar.
The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly released the 15th Five-Year Plan (2026-30) for Renewable Energy Development on Monday. The document targets roughly 3.5 terawatts of total renewable generation capacity by 2030, including more than 2.8 terawatts of wind and solar. But the plan's most consequential change may be its treatment of storage: no longer an afterthought or a compliance box for renewable developers, but a central pillar of system reliability.
From compliance asset to reliability engine
China entered the new planning period with 136 gigawatts and 351 gigawatt-hours of operational new energy storage at the end of 2025, according to NEA data released in January. That represents an 84 percent increase in a single year and a 40-fold expansion from the end of 2020. Average storage duration reached 2.58 hours. New energy storage capacity now exceeds the country's 66 gigawatts of pumped hydro by more than two to one.
The growth has reshaped the market structure in ways that challenge conventional assumptions. Independent storage plants — facilities built to sell grid services rather than to satisfy a renewable project's interconnection requirement — accounted for 51.2 percent of cumulative capacity at the end of 2025. Projects with durations of four hours or longer made up 27.6 percent. Lithium-ion systems still dominate with a 96.1 percent share. National average equivalent utilization climbed to 1,195 hours, nearly 300 hours higher than in 2024.
"The plan measures storage through its contribution to system reliability, not through a standalone capacity target," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, in an interview Tuesday. "That is a meaningful shift. It says storage gets paid for what it delivers to the grid, not just for being built."
Independent storage's majority share reflects a maturation that few predicted even two years ago. In 2023, most new storage capacity was still source-side — batteries co-located with wind or solar farms to meet a minimum storage ratio mandated by provincial grid codes. Today, merchant storage operators such as China Huadian, China Datang, and specialized firms like Hithium and Narada are bidding into ancillary service markets across multiple provinces, earning revenue from frequency regulation, capacity payments, and energy arbitrage.
Firm capacity targets replace volume mandates
The renewable energy plan does not set a specific storage capacity goal for 2030. A separate national action plan calls for new energy storage to exceed 180 gigawatts by the end of 2027. The widely cited projection of more than 370 gigawatts by 2030 comes from an industry white paper published by the China Energy Storage Alliance, not from the five-year plan itself.
Instead, the plan introduces firm-capacity obligations that tie storage value directly to grid performance. By 2030, wind and solar projects — including source-side storage — should deliver average firm capacity equivalent to at least 8 percent of installed capacity. Their share of electricity supplied during summer and winter evening peaks should top 20 percent, roughly 10 percentage points above the 2025 level. China also aims to add more than 300 gigawatts of reliable renewable peak-generation capability during the five-year period.
New centralized wind and solar plants will generally be required to achieve firm capacity of at least 10 percent, with projects encouraged to exceed 20 percent where conditions permit. The plan calls for stronger coordination between generation and storage, wider deployment of grid-forming equipment, and more accurate multi-timescale power forecasting.
Revenue reform follows reliability
On the revenue side, authorities plan to improve capacity payment mechanisms for both pumped hydro and new energy storage and gradually introduce compensation for reliable capacity. The shift signals a move away from storage built primarily to satisfy renewable project interconnection requirements toward assets paid for measurable grid services.
Storage will also be integrated into distributed solar, green power direct connections, source-grid-load-storage projects, virtual power plants, and smart microgrids. Data centers are identified as flexible loads that could be coordinated with renewable generation — a notable inclusion given China's rapid data center expansion to support artificial intelligence workloads.
Provincial grid companies will be required to publish storage dispatch data quarterly, a transparency measure aimed at reducing curtailment and improving market efficiency. The plan also directs the NEA to develop standardized technical requirements for grid-forming inverters by the end of 2026, addressing a long-standing interoperability gap that has limited the ability of battery plants to provide voltage support and black-start capability.
"The grid-forming requirement is the single most important technical mandate in the plan," said a senior engineer at a State Grid subsidiary who spoke on condition of anonymity because the standards are still in draft. "Without grid-forming capability, a battery plant is just an energy bucket. With it, the plant becomes a voltage source that can stabilize the grid during faults. That is what the system needs as synchronous generators retire."
Technology diversification gains urgency
The plan's emphasis on longer-duration and non-lithium technologies reflects growing concern about supply-chain concentration and safety. Sodium-ion battery pilots totaling 500 megawatt-hours are under construction in Jiangsu and Zhejiang, backed by CATL and HiNa Battery Technologies. Flow battery demonstration projects exceeding 100 megawatts have been approved in Dalian and Zhangjiakou. Compressed air energy storage, a technology China has pursued since the 2010s, received explicit mention in the plan's technology roadmap for the first time. Thermal energy storage and gravity-based systems also appear in the document's long-term research agenda, though without near-term deployment targets.
"The lithium-ion share will not stay at 96 percent if the plan's diversification language is implemented," said Yao Yudong, a researcher at the Chinese Academy of Sciences' Institute of Physics. "Sodium-ion is ready for stationary storage at scale. Flow batteries suit long-duration needs. Compressed air fits geologically suitable regions. The plan creates policy space for all three."
Domestic supply chains are already responding. CATL's second-generation sodium-ion cell, unveiled in April, targets 200 watt-hours per kilogram and a cycle life exceeding 6,000 cycles — specifications that make it competitive with lithium iron phosphate for stationary applications. HiNa Battery has secured 2 gigawatt-hours of orders for its sodium-ion systems slated for delivery in 2026. Rongke Power, the Dalian-based flow battery developer, reports a project pipeline of 3 gigawatts across northern China.
Challenges remain beneath the headline numbers
The transition still faces obstacles. Storage revenues remain dependent on provincial market rules, which vary widely in design and maturity. Rapid construction may create underutilized projects if dispatch protocols and capacity payments lag behind. Safety, system integration, and the economics of longer-duration technologies will determine whether China's storage expansion delivers operational value rather than capacity alone.
Analysts also note that the 96 percent lithium-ion share leaves the fleet exposed to critical mineral supply chains and fire-safety scrutiny. The plan encourages diversification but does not mandate it. Sodium-ion, flow battery, and compressed air storage pilots are underway in several provinces, but commercial deployment at scale remains limited.
Shandong province, which hosts the largest concentration of independent storage in China, saw average utilization hours drop in the second half of 2025 as new capacity outpaced market mechanisms. The provincial energy regulator has since introduced a capacity subscription model that guarantees a minimum revenue floor for qualified storage assets — a policy experiment that other provinces are watching closely.
For the Battery Tech sector, the implication is direct: policy has moved from volume targets to performance requirements. Companies that can deliver grid-forming capability, longer duration, and verifiable reliability metrics will capture the next wave of procurement.
The full 15th Five-Year Plan for Renewable Energy Development is available on the NDRC website. ESS News reported the plan's release and key details on Aug. 4.
Read more on grid-scale storage deployments in our Cloud & Edge Computing and EV sections.