Will 30% of energy storage companies disappear? The 14th Five-Year Plan will usher in a golden age for energy storage

Abstract:

This "major examination" is accelerating the cruel reshuffling of the energy storage industry, and it is expected that up to 30% of small and medium-sized enterprises and low-quality production capacity will face elimination.
 

 

Written by | Wei Xiaoni

Edited by | Jimmy

→This is the 1624th original article of Global Zero Carbon

 

August 1st is a significant day for nearly 290,000 energy storage industry chain enterprises in China. Because this is a clear dividing point for a new era in the energy storage industry.

 

On this day, the first mandatory national standard Safety Requirements for Lithium Batteries and Battery Packs for Electrical Energy Storage Systems (GB 44240-2024) was officially implemented. This new regulation, known as the "bottom line of energy storage safety" by the industry, has defined the survival red line for the industry with 23 stringent tests, marking the official entry of the energy storage industry into the "mandatory safety era".

 

The list of the first batch of certified enterprises was announced, with more than 20 leading enterprises such as Farwind Power, CATL, and Hachen Energy taking the lead in "obtaining licenses," while more small and medium-sized enterprises relying on the "low price + reduced configuration" strategy face the crisis of elimination.

 

According to industry estimates, the "shallow puncture test" alone may eliminate nearly 30% of the products submitted for inspection, and low-quality production capacity is being rapidly cleared out, accelerating the industry reshuffle.

 

The thermal runaway test is also a "trump card" of the new national standard. The standard requires that when a cell unit in the battery pack system experiences thermal runaway, it must be ensured that within 24 hours, the heat will not spread to adjacent units to cause a chain reaction, and there should be no flames outside the system, and the shell should not crack.

 

This requirement raises safety considerations from a single cell to the entire system level, forcing enterprises to invest huge R&D resources in system integration, BMS (Battery Management System) strategies, fire protection design, and structural protection.

 

Recently, leading enterprises such as Farwind Energy Storage and Hachen Energy Storage have conducted large-scale fire tests at the system level to verify and demonstrate their ability to meet or even exceed this standard.

 

Caption: Farwind Energy Storage recently successfully completed a large-scale fire test of intelligent trading energy storage, verifying the excellent performance of Farwind Energy Storage system in fire prevention and heat insulation, resistance to explosion shock, and system safety.

 

At the same time, national policies are also continuously pointing the way for the energy storage industry. The "Document No. 136" issued at the beginning of 2025 clarified the commercialization path of energy storage, cancelled the mandatory co-storage policy, and repeatedly released signals of "anti-involution," prompting the industry to shift from disorderly competition to high-quality development.

 

These signs indicate that the state is conducting a thorough and profound structural reshaping of the energy storage industry that has grown wildly in the past few years.

 

Data shows that as of March 2025, the number of enterprises related to the energy storage industry chain reached 290,000, but more than 30,000 enterprises have already closed down, showing the cruelty of the industry reshuffle.

 

However, from a long-term perspective, this pain is a necessary path for the energy storage industry to mature. This clearing is not a signal of industrial contraction, but rather, it clears the obstacles for the real explosion of the energy storage market during the 14th Five-Year Plan period.

 

Driven by the five core engines of new energy installation, green electricity direct connection, zero-carbon parks, green data centers, and electricity market-oriented reform, a more valuable and larger-scale new energy storage market is poised to take off.

 

 

01

Five Engines for the Explosion of the 14th Five-Year Plan Energy Storage Market

 

The pain of industry reshuffling easily creates the illusion that the industry is shrinking. However, for the energy storage industry, the current reshuffling is a necessary preparation for the real explosion of the market during the 14th Five-Year Plan period (2026-2030).

 

The continued increase in new energy installations, the implementation of green electricity direct connection policies, the acceleration of zero-carbon park construction, the improvement of data center energy efficiency requirements, and the deepening of electricity market-oriented reforms have all injected strong growth momentum into the energy storage industry.

 

Engine 1: Doubling of new energy installations, and the rigid demand for energy storage remains.

 

The newly released "China New Energy Power Generation Analysis Report 2025" shows that by the end of 2024, China's cumulative installed capacity of new energy reached 1.41 billion kilowatts, a year-on-year increase of 33.9%.

 

Ye Xiaoning, deputy director of the New Energy Research Institute of SGCC Energy Research Institute, said that during the 14th Five-Year Plan period, China's new energy will continue to maintain high-speed growth of 300 million kilowatts per year. According to preliminary calculations, By 2030, China's new energy installed capacity is expected to exceed 3 billion kilowatts, doubling the total amount of new energy on the existing basis.

 

The deputy secretary-general of the Renewable Energy Professional Committee of the China Energy Research Society also believes that in order to achieve the goal of 25% of non-fossil energy by 2030, according to calculations, by 2030, China's wind and photovoltaic power generation capacity needs to reach at least 2.5 billion kilowatts. If the country further raises its independent emission reduction contribution target, by 2030, China's wind and photovoltaic installed capacity is expected to reach more than 3 billion kilowatts.

 

The inherent randomness, volatility, and intermittency of new energy power generation determine that its large-scale grid connection must rely on energy storage for smoothing and regulation. As the penetration rate of new energy in the power system becomes higher and higher, the grid's demand for flexible regulation resources will change from "choice" to "necessity." Energy storage, as an essential part of "new energy +" and the most efficient regulation method, its rigid demand attribute will become increasingly prominent, and the market space will expand synchronously with, or even faster than, the growth of new energy installations.

 

Engine 2: "Green electricity direct connection" opens up a new incremental space.

 

On May 21, the National Development and Reform Commission and the National Energy Administration jointly issued the "Notice on Matters Concerning the Orderly Promotion of Green Electricity Direct Connection Development," which opened up a new and huge application market for energy storage. This policy encourages new energy projects to supply electricity directly to specific users through dedicated lines, realizing the "point-to-point" physical traceability of green electricity.

 

The core point of the policy is that grid-connected green electricity direct connection projects must "fully enhance the project's flexible regulation capabilities through reasonable configuration of energy storage, tapping the potential for flexible load regulation, etc., and minimize system regulation pressure." This means that energy storage is no longer an option, but a standard configuration for green electricity direct connection projects.

 

Taking Yunnan and Shaanxi provinces as examples, they have taken the lead in issuing local implementation plans and actively promoting the implementation of green electricity direct connection projects. For example, Yunnan Province's implementation plan clearly requires that projects need to scientifically plan power generation and "energy storage scale" to ensure the self-generation and self-use ratio and friendliness to the power grid. Local policies generally guide, such as configuring energy storage according to 10%-20% of the installed capacity and 2-4 hours, which has become an industry practice.

 

It is foreseeable that with the nationwide rollout of green electricity direct connection projects, it will directly create a new energy storage demand of tens of gigawatts (GW).

 

Engine Three: "Zero-Carbon Parks" create excellent integrated application scenarios.

 

In July 2025, the National Development and Reform Commission issued the "Notice on the Construction of Zero-Carbon Parks," clearly supporting qualified regions to take the lead in building a batch of zero-carbon parks. This depicts a very attractive blueprint for the application of energy storage. Industrial parks are concentrated areas of energy consumption and carbon emissions. To achieve the "zero-carbon" goal, the path must be to vigorously develop distributed wind and photovoltaic resources within the park and achieve on-site production, on-site consumption, and efficient utilization of energy.

 

To solve the volatility problem of distributed new energy within the park and meet the high requirements of industrial production for power quality and reliability, configuring an energy storage system has become a necessary choice. In this scenario, energy storage can achieve peak shaving and valley filling, demand-side response, backup power supply, and improvement of power quality, forming a highly coordinated "source-grid-load-storage" integration. The promotion of zero-carbon park construction will provide a high-value integrated application scenario for energy storage, with huge market potential.

 

Engine Four: The dual needs of "green data centers".

 

The "Green Data Center Work Notice" jointly issued by the Ministry of Industry and Information Technology and other departments puts extremely high requirements on the energy efficiency and green electricity utilization rate of data centers. For example, it requires that the PUE (power usage effectiveness) of data centers should not be higher than 1.30 (GB 40879-2021 Level 2 and above), and the renewable energy utilization rate should not be lower than the consumption responsibility weight of the province.

 

This brings a dual driving force to energy storage:

 

First, it meets the demand for green electricity consumption. In order to achieve the goal of renewable energy utilization, data centers need to introduce wind power and photovoltaic power on a large scale. Energy storage systems can help them smooth out the fluctuations of green electricity and maximize on-site consumption.

 

Second, it ensures power supply reliability. Data centers have almost harsh requirements for power supply continuity. Any momentary interruption may cause huge economic losses. The energy storage system can be used as an upgrade or supplement to the uninterruptible power supply, providing millisecond-level emergency response to ensure that the data center can operate stably under any grid disturbance.

 

The document clearly states that it is necessary to "actively utilize energy storage, hydrogen energy, and other technologies with strong power load adjustment and matching capabilities." It is foreseeable that "data center + energy storage" will become one of the standard architectures for future green data centers. This is a high-end niche market with high technical requirements and clear value returns.

 

Engine Five: Electricity market-oriented reforms release the value of energy storage "gold assets".

 

This is the most crucial and most disruptive of all engines. With the deepening of China's electricity market-oriented reforms, especially the full rollout of the electricity spot market, the financial attributes and asset value of energy storage are being activated unprecedentedly.

 

The rise of "transactional energy storage" advocated by Envision Energy Storage. In the electricity spot market, electricity prices fluctuate every 15 minutes or even shorter periods. This provides a huge space for energy storage to make arbitrage profits through "buying low and selling high." Independent energy storage power plants, as new market entities, can participate in the electricity energy market, auxiliary service market (such as frequency regulation), and capacity market through precise charging and discharging strategies to achieve multiple incomes.

 

Energy storage is also a "risk hedging tool" for electricity users. With the increasing volatility of prices in the electricity spot market, for large electricity users such as industry and commerce, being completely exposed to the volatile spot market will face huge electricity cost risks. At this time, configuring user-side energy storage is equivalent to buying "insurance" for their electricity costs. It can charge during the low electricity price period and discharge for its own use during the high electricity price period, thereby locking in electricity costs and hedging market risks.

 

Here, energy storage is no longer just an energy device, but a crucial financial hedging tool.

 

These five engines are superimposed, determining that the development of China's energy storage market has just begun.

 

 

 

02

Transition from "product manufacturing" to "value creation"

 

After the reshuffle, the energy storage market will present a new competitive landscape and value logic. For companies that have survived and are aiming for the future, simply manufacturing an energy storage cabinet that meets national standards is far from enough.

 

If survivors want to achieve longer-term development, they must complete a profound transition from "product manufacturer" to "value creator".

 

First, the core is continuous technological innovation. GB 44240-2024 establishes a safety bottom line, but the technological competition is far from over. Future innovations will focus on higher energy density, longer cycle life, higher conversion efficiency, and lower life-cycle cost of electricity (LCOS). Whoever can take the lead in making breakthroughs in these areas will be able to establish new technological barriers in the post-national standard era.

 

Second, the focus is on profound customer value creation. Future energy storage companies can no longer simply sell hardware products, but must transform into solution providers. This means deeply understanding the pain points of the customer's industry (such as zero-carbon parks, data centers, high-energy-consuming industries) and tailoring integrated solutions that include energy storage systems, energy management software, and maintenance services. The measurement standard of value will shift from the initial investment of the product to the actual benefits and cost savings brought to the customer throughout the project cycle.

 

Third, the key is strong market trading capabilities. As "transactional energy storage" becomes mainstream, the realization of energy storage value is highly dependent on a deep understanding and accurate prediction of the electricity market. Successful energy storage companies not only need to provide hardware but also need to have or provide strong software and strategy support. This may include developing advanced charging and discharging optimization algorithms, building virtual power plant (VPP) aggregation platforms, or even directly providing energy trading and asset management services to customers to help customers maximize their returns in the complex electricity market.

 

In short, energy storage companies must be responsible for the entire life cycle of energy storage products, from design, production, installation, and maintenance to final recycling. This is the key to building long-term customer trust and brand moats. During the "14th Five-Year Plan" period, the energy storage industry will usher in a true "golden age".