by XIAO Yifan

Global energy storage is set for rapid expansion, with China strengthening its lead as battery-based systems overtake traditional pumped hydro.

According to a 2026 white paper by the China Energy Storage Alliance (CNESA), global installed capacity is expected to grow 8–17-fold, from 166 GW to 1,414–2,885 GW between 2024 and 2035.

China is expected to reach 371.2–450.7 GW by 2030.

By end-2025, total capacity reached 496.2 GW, up 33.4% year on year. Pumped hydro fell below 50% of the total for the first time, marking a structural shift toward newer storage technologies. Non-hydro storage—including batteries—reached 278.7 GW, up 68.5%, with annual additions surpassing 100 GW.

The market is dominated by China, the United States, and Europe, which together accounted for 88% of new installations. China has led global additions for four straight years, with total capacity at 213.3 GW. Non-hydro storage reached 144.7 GW, or 51.9% of the global total, while annual additions hit a record 66.43 GW—well ahead of other major markets.

In the United States, installations reached 18.4 GW, led by California, Texas, and Arizona, while Europe added 15.4 GW, up 38.7%, with Germany, Italy, and the United Kingdom still dominant, though growth is spreading to newer markets. Grid-scale projects accounted for 60% of new capacity, as power systems require more flexible, dispatchable supply.

Emerging markets are also accelerating. The Middle East and Latin America added 5.9 GW, up 96.9%, as storage becomes essential for integrating renewable energy.

Investment is rising alongside deployment. In 2025, the CNESA Energy Storage Index climbed 41.7%, while primary market financing totaled 13.4 billion yuan across 102 deals, focused on battery technologies, non-lithium storage, hydrogen and system integration. Major players such as BYD are raising funds to expand capacity and overseas operations.

In China, deployment is shifting toward standalone, grid-oriented projects, now accounting for 58% of installations, reflecting demand for more flexible power systems. Storage duration is also increasing, with average duration expected to reach 3.47 hours by 2030.

Demand is increasingly coming from zero-carbon industrial parks and AI data centers, where surging electricity consumption is driving the need for reliable, high-capacity power—particularly in China, the United States, and Europe, according to the white paper.