Global Energy Storage Market Expands as China Drives Record Growth

China Energy Storage

Global energy storage market growth accelerated in 2025, with China remaining the main force behind new capacity additions and technology diversification. The country’s cumulative operating power storage capacity reached 213.3GW by the end of the year, accounting for 43% of the global total.

China energy storage growth was especially strong in new-type energy storage, which includes lithium-ion batteries and vanadium redox flow batteries but excludes pumped hydro. China’s new-type storage capacity rose to 144.7GW, representing more than two-thirds of its total storage fleet and 51.9% of global new-type installations.

The global energy storage market also became more diversified. Pumped hydro’s share of global operating capacity fell below 50% for the first time, while new-type storage expanded rapidly to 278.7GW/687.5GWh.

China Leads Storage Deployment as VRFB Projects Gain Share

China’s energy storage sector remained dominated by lithium-ion batteries in 2025. However, lithium-ion’s share slipped slightly as several large long-duration storage projects using all-vanadium redox flow battery technology came online.

This shift matters because grid storage demand is no longer only about short-duration battery systems. Longer-duration applications are gaining relevance as renewable penetration rises and power systems require more flexibility, peak shifting and grid stability.

Independent energy storage became China’s main application model, accounting for around 60% of total installed capacity. This shows that storage is increasingly being deployed as standalone grid infrastructure, not only as an accessory to solar or wind projects.

Chinese manufacturers also strengthened their global position. Sungrow, Tesla, CRRC Zhuzhou Institute, BYD and Envision Energy ranked as the world’s top five energy storage system shipment providers in 2025, highlighting the growing concentration of supply among large integrated players.

Lithium Demand Rises as Storage Becomes a Core Battery Market

The global energy storage market reached 496.2GW of cumulative operating power storage capacity by the end of 2025, up 33.3% from the previous year. New installations hit a record 123.9GW, led by China, the US and Europe, while the Middle East and Latin America gained momentum.

The US added 18.4GW/48.3GWh of new-type storage capacity in 2025, while Europe added 15.4GW/32.1GWh. These figures show that storage growth is becoming global, even though China remains the dominant scale market.

Energy storage is also reshaping battery materials demand. The sector accounted for 25% of global lithium demand in 2025, up sharply from 5% in 2020, making storage one of the most important demand drivers for lithium carbonate, lithium iron phosphate materials and battery supply chains.

Stronger storage demand helped push battery-grade lithium carbonate prices to 158,000-168,000 yuan/t at the end of March, up 120% from a year earlier. This confirms that stationary storage has moved from a secondary battery market into a major force in lithium pricing.

The Metalnomist Commentary

China’s dominance in energy storage shows how quickly battery supply chains can scale when policy, manufacturing and grid demand align. The next phase will test whether lithium, vanadium and power equipment supply can keep pace with global storage deployment.