by GAO Jing
On the site of a former coal mine in Coalburn, Scotland, rows of container-sized batteries now sit where miners once worked, storing electricity from nearby wind farms. Similar scenes are unfolding across the UK, from Greater Manchester to Uskmouth in Wales, as the country rewires its power system around intermittent renewables.
The shift is already translating into repeat orders for Chinese suppliers. At one project, the chief executive of a UK energy company told engineers from Envision Energy that discussions on a second order could begin immediately — a marked change from earlier caution.
"Initially, clients were asking whether the system could even connect to the grid," said XU Zhonghua, Envision's chief engineer. "A month later, they were asking what we could build together next."
That evolution — from trial orders to repeat demand — reflects a deeper structural shift. As Britain phases out fossil fuels and leans more heavily on wind and solar, the need for grid-balancing capacity is rising faster than local manufacturing can keep pace.
The UK closed its last coal-fired power plant in 2024, and wind has since become its largest source of electricity. While that transition has cut emissions, it has also increased volatility in the power system, raising the value of storage.
According to Solar Media, the UK added 4 GWh of battery storage capacity in 2025, taking total operational capacity to 12.9 GWh. Projects under construction total 21.88 GWh, while approved projects reach 162.5 GWh as of October 2025, underscoring both growth and the scale of future demand.
Britain's market design has made storage particularly attractive. Unlike more regulated systems elsewhere in Europe, the UK's liberalized electricity market allows battery operators to generate revenue across multiple channels, including wholesale trading and the balancing mechanism.
Those opportunities have expanded as renewable penetration has increased. With renewables accounting for 47% of generation in 2025, according to Carbon Brief, power prices have become more volatile, creating wider spreads for storage operators to exploit.
FU Qiang, a principal at Roland Berger, said the UK was one of the few markets where storage had become a standalone investment case, no longer just supporting renewables but generating returns in its own right.
Geopolitics has reinforced the trend. Rising tensions in the Middle East have pushed oil prices above $100 a barrel and lifted European gas prices, feeding through into electricity costs. Research from China International Capital Corporation (CICC) noted that higher gas prices directly support power prices, strengthening the economics of storage assets.
At the same time, energy security concerns — sharpened by the Russia-Ukraine conflict — have added urgency to the build-out of domestic clean energy systems, including storage.
The result is a market expanding faster than domestic supply.
Despite policy support for local manufacturing, domestic production currently meets less than 15% of battery demand, according to industry estimates. Analysts say reliance on overseas suppliers — particularly Chinese lithium-ion manufacturers — is likely to persist in the near term.
SHI Jiayan of BloombergNEF said the UK lacked sufficient domestic battery manufacturing capacity and would remain dependent on overseas suppliers over the next three to five years.
Fu said the supply gap may not narrow and could widen further if demand accelerates.
Chinese companies have moved quickly to fill that gap. Groups including CATL, BYD, Envision Energy, Hithium, CSI Solar and Sungrow have all established a presence in the UK, supplying projects across utility-scale and distributed segments.
In recent tenders, Chinese suppliers have taken a leading share alongside Tesla, according to data from Chinese industry research firm GGII. In 2025, several Chinese groups ranked among the top battery storage system providers in the UK market.
Their advantage lies not only in scale, but in technology and cost structure. Chinese manufacturers have largely standardized on lithium iron phosphate (LFP) chemistry, which offers lower costs and higher safety for stationary storage than the nickel-manganese-cobalt (NCM) systems still common among Western and Korean competitors.
Coupled with vertically integrated supply chains, this allows Chinese firms to deliver projects up to 30% faster — an important edge in a market where connection queues and project timelines are tightening.
Financial credibility has also improved. After years of large-scale deployment, leading Chinese suppliers are now widely recognized by UK lenders as "tier-one" counterparties, easing access to project financing.
Yet their position is not unchallenged.
Pressure is building from multiple directions, including tighter grid connection rules, rising competition and policy signals in the UK and Europe that favor local manufacturing. At the same time, volatile power prices and the need for more sophisticated trading capabilities could erode returns if operators fail to optimize asset performance.
To navigate these risks, some companies are investing in localization beyond manufacturing. Envision Energy, for example, has built a largely local operating team in the UK to improve execution in project development and negotiation.
The next phase of expansion may see Chinese firms move further up the value chain — from equipment suppliers to investors and operators — particularly in segments such as residential and long-duration storage.
For now, however, the direction of travel is clear: as Britain's energy transition accelerates, Chinese battery makers are becoming not just suppliers of last resort, but integral to how the system operates.