China's energy storage sector is surging, with planned capacity up 93.5% YoY, reaching 19 GW in the first five months of 2023, according to Haitong Securities.

By 2027, China aims for a 97 GW total energy storage capacity with a 49.3% CAGR, relying on lithium-ion battery technology.

Factors like increased renewable energy adoption and falling lithium prices fuel the industry's growth.

However, the industry needs a mature business model for sustainable returns. Experts call for pro-market reforms and electricity market liberalization.

China actively promotes renewables to meet carbon reduction targets. Energy storage systems help balance variable supply and demand.

Fluctuating lithium prices influence energy storage costs. Prices dropped over 45% since November 2022.

Average battery cell prices in energy storage systems fell 12.6% to 0.65 yuan per watt-hour in May.

Major energy storage investors in China include state-linked companies like power generation firms and grid network companies.

Power generation companies build storage facilities as required by government policy.

Grid companies invest in energy storage to avoid overbuilding infrastructure.

Challenges for builders include high costs due to government mandates. Last June, the government allowed qualified energy storage projects to become independent service providers, offering ancillary services and renting storage capacity.