China’s energy storage sector is rapidly expanding. As a solution to balancing the country’s growing energy needs and mass renewable energy production, the industry has attracted investments worth hundreds of billions of yuan (tens of billions of dollars).
This has seen China become the world’s largest market for energy storage deployment. Its capacity of “new type” energy storage systems, such as batteries, quadrupled in 2023 alone.
This rapid growth, however, has caused other problems, such as what one analyst described as “temporary structural overcapacity” and low utilisation.
In this Q&A, Carbon Brief explores how China has been driving the sector forwards and how it fits into the nation’s wider energy transition.
Soaring battery deployment
China is currently the world’s largest market for energy storage, followed by the US and Europe, according to BloombergNEF.
This position was driven by a combination of market need for balancing renewable energy and government efforts to build a “new power system”.
China installed a massive 301 gigawatts (GW) of renewable capacity including solar, wind and hydro in 2023 alone – more than the total renewable generating capacity installed in most countries over all time.
As of May 2024, “clean energy” generated a record-high 44% of China’s electricity, according to Carbon Brief analysis.
However, despite the renewable energy boom, China’s power system still struggles to absorb all of the generation, making energy storage – which bridges temporal and geographical gaps between energy supply and demand – a key tool for the country to improve its renewable energy integration.
The majority of China’s storage capacity comes from large-scale storage projects, such as hydropower with reservoirs on the Yangtze River and gigawatt-level battery energy storage systems in Inner Mongolia.
Pumped hydro storage is the most common utility-scale storage system and has a long history in China. It pumps water uphill to a reservoir and then releases it to generate electricity. As of 2023, pumped hydro storage surpassed 50GW, making up over half of the country’s overall storage capacity.
The remaining half is comprised primarily of batteries and emerging technologies, such as compressed air, flywheel, as well as thermal energy.
These technologies, known as the “new type” energy storage in China, have seen rapid growth in recent years. Lithium-ion batteries dominate the “new type” sector.
The deployment of “new type” energy storage capacity almost quadrupled in 2023 in China, increasing to 31.4GW, up from just 8.7GW in 2022, according to data from the National Energy Administration (NEA).
This means that China surpassed its target of reaching 30GW of the “new type” energy storage by 2025 two years earlier than planned. The goal had been set by the NEA and China’s top economic planner the National Development and Reform Commission, under the 14th “five year plan”.
(Read Carbon Brief’s Q&A: What does China’s 14th ‘five year plan’ mean for climate change?)
Wang Shurui, researcher at the Institutes of Science and Development, Chinese Academy of Sciences, tells Carbon Brief:
“Advancements in the storage sector will enable a greater integration of renewable energy into the power grid, enhancing grid stability and helping accelerate China’s emissions reduction.”
High deployment, low usage
To promote battery storage, China has implemented a number of policies, most notably the gradual rollout since 2017 of the “mandatory allocation of energy storage” policy (强制配储政策), which is also known as the “new energy plus storage” model (新能源+储能).
Under the mandate, which applies in dozens of provinces, renewable companies are required to include a certain amount of energy storage capacity alongside new solar and wind generation projects, with the storage allocation rate ranging between 5% to 20%.
“This mandate is driving storage growth, as it pushes the build-out of large-scale energy storage stations,” says Guo Shiyu, climate and energy campaigner from Beijing-based thinktank Greenpeace East Asia. She tells Carbon Brief:
“The stations may not look huge separately, but they are mostly built on the generation side [alongside generating capacity], which are still quite big compared to industrial and commercial self-built storage [on the demand side].”
Cheaper costs led by technology innovation have helped the market’s increasing adoption of batteries too, Sun Yongping, researcher of emissions trading and vice-dean of the Institute of State Governance at Huazhong University of Science and Technology, tells Carbon Brief.
“An interviewee told me in a recent field study that the cost had fallen by over a half these years,” says Sun. “Local development is so fast that too often you can’t grasp it [in a] timely [way] just by looking at the statistical numbers,” he adds.
Despite its positive intentions, the mandatory storage policy has had unintended consequences. Notably, a significant portion of the installed storage capacity remains underutilised.
In regions covered by the State Grid – the government-owned operator that runs the majority of the country’s electricity transmission network – over four-fifths of the storage systems operate less than 10% of the time, with many used only once every two days, according to a Bloomberg report.
Another challenge, according to Guo, is the additional project costs and lack of effective incentives, as many storage facilities were built or rented to fulfil government requirements but went unused afterwards.
Both Guo and Sun argue that China needs a deeper level of electricity market pricing reforms to create incentives to use storage.
For example, having electricity prices that change at different hours could encourage the adoption of storage technologies in China, suggests Sun.
Guo says: “We still hope that each place deploys new energy storage according to its needs and understands its own situation instead of adopting a ‘one-size-fits-all’ approach.”
‘New driving force’ for economy
In 2024, the NEA named the energy storage sector as a “new driving force” for the country’s “new quality productive forces ” (NQPF). It could “propel the upstream and downstream industrial chains, promote scientific and technological innovation, talent training, investment and employment”, said the NEA.
(Read more on Carbon Brief’s Q&A: What China’s push for ‘new quality productive forces’ means for climate action.)
Regional governments are also exploiting the economic opportunity in energy storage. Guangdong, for example, aimed to make energy storage a “strategic pillar industry” of its economy by setting a target of 600bn yuan ($85bn) in annual revenue from the energy storage industry by 2025, eyeing the domestic and overseas market as the global energy transition deepens.
Meanwhile, Zhejiang, Anhui and Guangdong also have ambitious targets of installing local storage capacity of 3GW each by 2025, according to a recent tally by Greenpeace East Asia, based on government documents.
The booming market has attracted more than 100bn yuan ($14bn) since 2021.
But risks of market turmoil also exist. According to battery industrial information provider Gaogong Industrial Institute, last year China saw over 70,000 newly registered companies in the sector, which indicated that the market – already seeing fierce competition – may now be undergoing an “overcapacity” period.
Guo says this period of “overcapacity”, however, is rather “temporary”. She adds:
“There exists a temporary structural overcapacity, as the current expansion of new type energy storage is outpacing the market needs.
“However, if the regional governments could provide more policy support for the application of storage projects, this ‘excess capacity’ due to insufficient market demand could be avoided.”
The post Q&A: How China became the world’s leading market for energy storage appeared first on Carbon Brief.
Q&A: How China became the world’s leading market for energy storage
Drought and heatwaves occurring together – known as “compound” events – have “surged” across the world since the early 2000s, a new study shows.
Compound drought and heat events (CDHEs) can have devastating effects, creating the ideal conditions for intense wildfires, such as Australia’s “Black Summer” of 2019-20 where bushfires burned 24m hectares and killed 33 people.
The research, published in Science Advances, finds that the increase in CDHEs is predominantly being driven by events that start with a heatwave.
The global area affected by such “heatwave-led” compound events has more than doubled between 1980-2001 and 2002-23, the study says.
The rapid increase in these events over the last 23 years cannot be explained solely by global warming, the authors note.
Since the late 1990s, feedbacks between the land and the atmosphere have become stronger, making heatwaves more likely to trigger drought conditions, they explain.
One of the study authors tells Carbon Brief that societies must pay greater attention to compound events, which can “cause severe impacts on ecosystems, agriculture and society”.
Compound events
CDHEs are extreme weather events where drought and heatwave conditions occur simultaneously – or shortly after each other – in the same region.
These events are often triggered by large-scale weather patterns, such as “blocking” highs, which can produce “prolonged” hot and dry conditions, according to the study.
Prof Sang-Wook Yeh is one of the study authors and a professor at the Ewha Womans University in South Korea. He tells Carbon Brief:
“When heatwaves and droughts occur together, the two hazards reinforce each other through land-atmosphere interactions. This amplifies surface heating and soil moisture deficits, making compound events more intense and damaging than single hazards.”
CDHEs can begin with either a heatwave or a drought.
The sequence of these extremes is important, the study says, as they have different drivers and impacts.
For example, in a CDHE where the heatwave was the precursor, increased direct sunshine causes more moisture loss from soils and plants, leading to a drought.
Conversely, in an event where the drought was the precursor, the lack of soil moisture means that less of the sun’s energy goes into evaporation and more goes into warming the Earth’s surface. This produces favourable conditions for heatwaves.
The study shows that the majority of CDHEs globally start out as a drought.
In recent years, there has been increasing focus on these events due to the devastating impact they have on agriculture, ecosystems and public health.
In Russia in the summer of 2010, a compound drought-heatwave event – and the associated wildfires – caused the death of nearly 55,000 people, the study notes.
The record-breaking Pacific north-west “heat dome” in 2021 triggered extreme drought conditions that caused “significant declines” in wheat yields, as well as in barley, canola and fruit production in British Columbia and Alberta, Canada, says the study.
Increasing events
To assess how CDHEs are changing, the researchers use daily reanalysis data to identify droughts and heatwaves events. (Reanalysis data combines past observations with climate models to create a historical climate record.) Then, using an algorithm, they analyse how these events overlap in both time and space.
The study covers the period from 1980 to 2023 and the world’s land surface, excluding polar regions where CDHEs are rare.
The research finds that the area of land affected by CDHEs has “increased substantially” since the early 2000s.
Heatwave-led events have been the main contributor to this increase, the study says, with their spatial extent rising 110% between 1980-2001 and 2002-23, compared to a 59% increase for drought-led events.
The map below shows the global distribution of CDHEs over 1980-2023. The charts show the percentage of the land surface affected by a heatwave-led CDHE (red) or a drought-led CDHE (yellow) in a given year (left) and relative increase in each CDHE type (right).
The study finds that CDHEs have occurred most frequently in northern South America, the southern US, eastern Europe, central Africa and south Asia.
Threshold passed
The authors explain that the increase in heatwave-led CDHEs is related to rising global temperatures, but that this does not tell the whole story.
In the earlier 22-year period of 1980-2001, the study finds that the spatial extent of heatwave-led CDHEs rises by 1.6% per 1C of global temperature rise. For the more-recent period of 2022-23, this increases “nearly eightfold” to 13.1%.
The change suggests that the rapid increase in the heatwave-led CDHEs occurred after the global average temperature “surpasse[d] a certain temperature threshold”, the paper says.
This threshold is an absolute global average temperature of 14.3C, the authors estimate (based on an 11-year average), which the world passed around the year 2000.
Investigating the recent surge in heatwave-leading CDHEs further, the researchers find a “regime shift” in land-atmosphere dynamics “toward a persistently intensified state after the late 1990s”.
In other words, the way that drier soils drive higher surface temperatures, and vice versa, is becoming stronger, resulting in more heatwave-led compound events.
Daily data
The research has some advantages over other previous studies, Yeh says. For instance, the new work uses daily estimations of CDHEs, compared to monthly data used in past research. This is “important for capturing the detailed occurrence” of these events, says Yeh.
He adds that another advantage of their study is that it distinguishes the sequence of droughts and heatwaves, which allows them to “better understand the differences” in the characteristics of CDHEs.
Dr Meryem Tanarhte is a climate scientist at the University Hassan II in Morocco, and Dr Ruth Cerezo Mota is a climatologist and a researcher at the National Autonomous University of Mexico. Both scientists, who were not involved in the study, agree that the daily estimations give a clearer picture of how CDHEs are changing.
Cerezo-Mota adds that another major contribution of the study is its global focus. She tells Carbon Brief that in some regions, such as Mexico and Africa, there is a lack of studies on CDHEs:
“Not because the events do not occur, but perhaps because [these regions] do not have all the data or the expertise to do so.”
However, she notes that the reanalysis data used by the study does have limitations with how it represents rainfall in some parts of the world.
Compound impacts
The study notes that if CDHEs continue to intensify – particularly events where heatwaves are the precursors – they could drive declining crop productivity, increased wildfire frequency and severe public health crises.
These impacts could be “much more rapid and severe as global warming continues”, Yeh tells Carbon Brief.
Tanarhte notes that these events can be forecasted up to 10 days ahead in many regions. Furthermore, she says, the strongest impacts can be prevented “through preparedness and adaptation”, including through “water management for agriculture, heatwave mitigation measures and wildfire mitigation”.
The study recommends reassessing current risk management strategies for these compound events. It also suggests incorporating the sequences of drought and heatwaves into compound event analysis frameworks “to enhance climate risk management”.
Cerezo-Mota says that it is clear that the world needs to be prepared for the increased occurrence of these events. She tells Carbon Brief:
“These [risk assessments and strategies] need to be carried out at the local level to understand the complexities of each region.”
The post Heatwaves driving recent ‘surge’ in compound drought and heat extremes appeared first on Carbon Brief.
Heatwaves driving recent ‘surge’ in compound drought and heat extremes
Greenhouse Gases
DeBriefed 6 March 2026: Iran energy crisis | China climate plan | Bristol’s ‘pioneering’ wind turbine
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Energy crisis
ENERGY SPIKE: US-Israeli attacks on Iran and subsequent counterattacks across the Middle East have sent energy prices “soaring”, according to Reuters. The newswire reported that the region “accounts for just under a third of global oil production and almost a fifth of gas”. The Guardian noted that shipping traffic through the strait of Hormuz, which normally ferries 20% of the world’s oil, “all but ground to a halt”. The Financial Times reported that attacks by Iran on Middle East energy facilities – notably in Qatar – triggered the “biggest rise in gas prices since Russia’s full-scale invasion of Ukraine”.
‘RISK’ AND ‘BENEFITS’: Bloomberg reported on increases in diesel prices in Europe and the US, speculating that rising fuel costs could be “a risk for president Donald Trump”. US gas producers are “poised to benefit from the big disruption in global supply”, according to CNBC. Indian government sources told the Economic Times that Russia is prepared to “fulfil India’s energy demands”. China Daily quoted experts who said “China’s energy security remains fundamentally unshaken”, thanks to “emergency stockpiles and a wide array of import channels”.
‘ESSENTIAL’ RENEWABLES: Energy analysts said governments should cut their fossil-fuel reliance by investing in renewables, “rather than just seeking non-Gulf oil and gas suppliers”, reported Climate Home News. This message was echoed by UK business secretary Peter Kyle, who said “doubling down on renewables” was “essential” amid “regional instability”, according to the Daily Telegraph.
China’s climate plan
PEAK COAL?: China has set out its next “five-year plan” at the annual “two sessions” meeting of the National People’s Congress, including its climate strategy out to 2030, according to the Hong Kong-based South China Morning Post. The plan called for China to cut its carbon emissions per unit of gross domestic product (GDP) by 17% from 2026 to 2030, which “may allow for continued increase in emissions given the rate of GDP growth”, reported Reuters. The newswire added that the plan also had targets to reach peak coal in the next five years and replace 30m tonnes per year of coal with renewables.
ACTIVE YET PRUDENT: Bloomberg described the new plan as “cautious”, stating that it “frustrat[es] hopes for tighter policy that would drive the nation to peak carbon emissions well before president Xi Jinping’s 2030 deadline”. Carbon Brief has just published an in-depth analysis of the plan. China Daily reported that the strategy “highlights measures to promote the climate targets of peaking carbon dioxide emissions before 2030”, which China said it would work towards “actively yet prudently”.
Around the world
- EU RULES: The European Commission has proposed new “made in Europe” rules to support domestic low-carbon industries, “against fierce competition from China”, reported Agence France-Presse. Carbon Brief examined what it means for climate efforts.
- RECORD HEAT: The US National Oceanic and Atmospheric Administration has said there is a 50-60% chance that the El Niño weather pattern could return this year, amplifying the effect of global warming and potentially driving temperatures to “record highs”, according to Euronews.
- FLAGSHIP FUND: The African Development Bank’s “flagship clean energy fund” plans to more than double its financing to $2.5bn for African renewables over the next two years, reported the Associated Press.
- NO WITHDRAWAL: Vanuatu has defied US efforts to force the Pacific-island nation to drop a UN draft resolution calling on the world to implement a landmark International Court of Justice (ICJ) ruling on climate, according to the Guardian.
98
The number of nations that submitted their national reports on tackling nature loss to the UN on time – just half of the 196 countries that are part of the UN biodiversity treaty – according to analysis by Carbon Brief.
Latest climate research
- Sea levels are already “much higher than assumed” in most assessments of the threat posed by sea-level rise, due to “inadequate” modelling assumptions | Nature
- Accelerating human-caused global warming could see the Paris Agreement’s 1.5C limit crossed before 2030 | Geophysical Research Letters covered by Carbon Brief
- Future “super El Niño events” could “significantly lower” solar power generation due to a reduction in solar irradiance in key regions, such as California and east China | Communications Earth & Environment
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
UK greenhouse gas emissions in 2025 fell to 54% below 1990 levels, the baseline year for its legally binding climate goals, according to new Carbon Brief analysis. Over the same period, data from the World Bank shows that the UK’s economy has expanded by 95%, meaning that emissions have been decoupling from growth.