What does China's 180GW energy storage target for 2027 mean?
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Recently, China's National Development and Reform Commission and the National Energy Administration issued the "Special Action Plan for Large-scale Construction of New Energy Storage (2025–2027)." This plan clearly states that by 2027, the total installed capacity of new energy storage nationwide is planned to reach 180 million kilowatts (i.e., 180 GW) or more, driving direct project investment of about 250 billion yuan. The technical route for new energy storage will still be mainly based on lithium-ion battery storage.
According to Zuifeng Trading Desk, JPMorgan Chase noted in its latest report that the significance of this event does not lie in the numerical target itself, but in the policy determination behind it.
In its view, "The 180 GW target is not high," and China often "overachieves" such related goals. More importantly, this dispels market concerns about the previous "cancellation of mandatory storage allocation policy", strengthens the bank’s conviction that China's energy storage industry will soon see a V-shaped recovery, or may even recover ahead of schedule.
The target is not remarkable, perhaps just a 'lower limit'
According to the report, the 180 GW target may not be "very exciting" compared to market expectations. For example, in July 2024, China achieved its target to exceed 1.2 billion kilowatts of total installed wind and solar power capacity six years ahead of schedule, with total wind and solar capacity reaching 1.206 billion kilowatts.
The report points out that as of the 2024 fiscal year, China had installed about 75 GW (about 170 GWh) of energy storage systems cumulatively. Even considering a temporary slowdown in 2025 due to the “cancellation of mandatory storage allocation policy”, China’s cumulative installed capacity will reach about 215 GW (about 550 GWh) by 2027, far above the official target.
The report reminds investors of this key fact: China has a tradition of "overachieving" in meeting renewable energy targets. Therefore, the 180 GW target is not high.
Dispelling doubts: an injection of confidence for a 'V-shaped recovery' in energy storage
JPMorgan believes that the most important impact of this policy is to "dispel market concerns." Since the beginning of this year, following the "cancellation of mandatory storage allocation policy", there has been persistent market uncertainty, with concerns about whether this means wavering support for the development of energy storage.
At the beginning of this year, the National Development and Reform Commission and the National Energy Administration jointly issued a "Notice on Deepening the Market-oriented Reform of New Energy Feed-in Tariffs and Promoting High-quality Development of New Energy." It stated that energy storage configuration must not be used as a precondition for approving, connecting to the grid, or transmitting power from new energy projects. It uses June 1, 2025, as a cut-off, distinguishing existing and incremental projects, and incorporates them into the mechanism tariff.
The report clearly points out that this current top-down action plan completely dispels these doubts. It shows that China’s determination to promote energy storage development has not wavered; rather, it has shifted to more market-oriented incentive mechanisms, such as peak-valley price arbitration and capacity price compensation.
The bank states that this top-level design, combined with the recent introduction of capacity pricing policies in regions such as Inner Mongolia and the strong momentum of monthly energy storage EPC bidding, makes it more confident that the energy storage industry will experience a "V-shaped recovery," perhaps with the inflection point arriving sooner than expected.
Multi-scenario applications: Energy storage becomes core to energy transition
The report states that the current energy storage plan details the key directions for promotion and application of energy storage:
- Power generation side: Mainly focusing on deployment of energy storage in large renewable energy bases (such as deserts), to assist in the dispatch and absorption of renewable energy.
- Grid side: Promote deployment of independent energy storage projects in grid bottleneck areas. Revenue models for such projects include peak-valley price arbitrage in the spot market and/or capacity compensation fees.
- Innovative applications: Encourage innovative uses of energy storage in industrial parks, integrated solar-storage-charging EV charging stations, data centers, and distributed photovoltaic projects.
These measures are aimed at improving grid flexibility and stability, ensuring efficient grid connection and utilization of renewable energy.
Industry recovery expected
According to the report’s analysis, structurally, China’s power system currently lacks sufficient storage capacity. If measured by the ratio of storage to renewable energy installed capacity in the US, China’s energy storage capacity in 2024 should have reached 300 GWh, but actually stands at about 170 GWh.
This shows there is huge growth potential in China's energy storage market. This policy introduced by the National Development and Reform Commission is meant to fill this gap and activate industry vitality through market mechanisms.
It can be expected that, with increased policy support and improvement of market mechanisms, China’s energy storage industry is expected to achieve significant growth in the coming years, possibly once again overachieving the national targets.
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