China could have shifted an additional 23 TWh of clean electricity in 2025 if its utility-scale battery energy storage systems (BESS) had been used more efficiently, according to a new analysis by energy think tank Ember. The report argues that the country's next challenge is no longer expanding battery capacity, but improving how it is deployed to support an electricity system increasingly powered by wind and solar.

China currently operates the world's largest battery energy storage fleet after adding capacity at an unprecedented pace. In December 2025 alone, the country installed 18.76 GW/65.46 GWh of new energy storage—more than the United States added during the entire year. By the end of 2025, China accounted for more than half of global BESS capacity, while installed lithium-ion battery storage approached 150 GW in the first quarter of 2026. In June, the government also raised its 2030 target for new energy storage to 300 GW.

According to Ember, the rapid expansion of battery storage has largely been driven by requirements for new wind and solar projects to include co-located storage. While this policy helped reduce renewable energy curtailment and improve grid integration, the think tank says the model is now reaching its limits as the market matures.

The report highlights that utility-scale battery utilisation more than doubled between 2022 and 2025, but significant differences remain between battery types. By 2025, co-located batteries completed around 100 fewer annual charge-discharge cycles than standalone systems because they are operated mainly to support individual renewable projects and cannot yet participate independently in electricity markets. Standalone batteries, by contrast, are dispatched directly by grid operators and benefit from more diversified revenue streams.

Closing this utilisation gap could deliver substantial benefits. Ember estimates that operating renewable co-located batteries for an additional 100 cycles per year would have shifted 9.5 TWh more electricity in 2025—roughly equivalent to Thailand's total solar generation that year. Under a more optimised scenario, where both co-located and standalone batteries reached 350 cycles annually, China's battery fleet could have shifted an additional 23 TWh of clean electricity, enough to power Singapore for around five months.

The report also finds that China's battery storage market is shifting away from co-located systems. Between January and April 2026, standalone storage accounted for 84.7% of newly installed utility-scale battery capacity, compared with 8.4% for co-located projects, reflecting changes introduced after China ended its renewable storage co-location mandate in February 2025. A subsequent policy adopted in January 2026 extended national capacity remuneration to standalone battery storage, opening new revenue opportunities for the sector.

According to Ember, sustaining the next phase of China's battery storage market will require further electricity market reforms, including stronger capacity pricing mechanisms, broader integration of spot and ancillary service markets, and grid tariff rules that better reflect the dual charging and discharging role of batteries. The think tank argues that these measures will be essential to maximise the value of battery storage as China continues integrating growing volumes of wind and solar generation into its power system.