---
title: "CITIC Construction Investment: Raises the domestic energy storage installation growth rate for next year to double, marking the beginning of a new cycle for lithium batteries"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/262772482.md"
description: "CITIC Construction Investment Securities has raised its forecast for new domestic energy storage installations next year to 300 GWh, expecting total lithium battery demand to exceed 2,700 GWh, a year-on-year increase of over 30%. With the bidding climate improving, the annual bidding volume is expected to surpass 360 GWh. Social capital investment is active, and various provinces have released a large number of energy storage project indicators. The improvement in economic viability has made several provinces investment hotspots. Shortages may occur in multiple segments of lithium batteries"
datetime: "2025-10-26T11:22:12.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/news/262772482.md)
  - [en](https://longbridge.com/en/news/262772482.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/262772482.md)
---

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# CITIC Construction Investment: Raises the domestic energy storage installation growth rate for next year to double, marking the beginning of a new cycle for lithium batteries

**We have raised the forecast for new domestic energy storage installations next year to double: (1) The bidding climate is improving (2) Social capital investment is active (3) Economic benefits are enhancing, making multiple provinces investment-rich. Therefore, with strong demand, the total demand for lithium batteries next year is expected to exceed 2700GWh, with a year-on-year growth rate of over 30%, and shortages may occur in multiple links.**

The bidding climate is improving, with annual bidding expected to exceed 360GWh

We have compiled that from January to September this year, new domestic energy storage project bids reached 255.8GWh, a year-on-year increase of 97.7%. Previously, the market believed that the document No. 136 "cancellation of mandatory storage" would lead to a decline in bidding data after May 31, but in fact, bidding increased instead of decreased, with year-on-year growth rates for new bids in June, July, August, and September reaching 231%, 195%, 75.5%, and 101%, respectively. Considering that Q4 is often a peak season for bidding, even conservatively assuming that the bidding volume in Q4 remains flat year-on-year with no growth, the total annual bidding could reach at least 361.6GWh.

Social capital investment is active, with provinces issuing a large number of energy storage project indicators

According to statistics from Energy Storage Headlines, since the beginning of this year, the number of energy storage projects released by various provinces has reached 505, with a total capacity of 85.59GW/250.1GWh. In terms of project distribution, Inner Mongolia, Hebei, and Shandong have the most projects, reaching 77.4, 67.9, and 40.5GWh, respectively. These projects are reported by social capital and have a high degree of realization.

"Policy + Market" dual support, economic benefits enhance multiple provinces becoming investment-rich in energy storage

Provinces such as Hebei, Gansu, Ningxia, Shandong, and Inner Mongolia have introduced capacity pricing and capacity compensation policies, providing strong guaranteed returns for energy storage. The IRR in provinces like Inner Mongolia, Shandong, and Hebei can reach around 15%, with most provinces achieving economic viability, and the capital IRR can exceed 8%.

We have raised the forecast for new domestic energy storage installations next year to 300GWh, with potential shortages in multiple links

We expect that the total demand for lithium batteries next year will exceed 2700GWh, with a year-on-year growth rate exceeding 30%, of which the demand for energy storage batteries will exceed 900GWh, and multiple links in lithium batteries may experience shortages.

1.  The bidding climate is improving, with the implementation of document No. 136 leading to an increase rather than a decrease, and annual bidding is expected to exceed 360GWh

We have compiled that from January to September this year, new domestic energy storage project bids reached 255.8GWh, a year-on-year increase of 97.7%. Among them, from January to September, all months except May maintained year-on-year growth. Previously, the market believed that the clause "cancellation of mandatory storage" in document No. 136 would lead to a decline in demand after May, and the year-on-year growth in bidding data from January to March was due to the rush to install before May 31. However, after May 31, the bidding data was expected to decline, but in fact, after the implementation of document No. 136, energy storage project bidding increased instead of decreased, with year-on-year growth rates for new bids in June, July, August, and September reaching 231%, 195%, 75.5%, and 101%, respectively.

 In our previous report, we discussed that under the dual factors of policy and market, the economic viability of domestic energy storage has fully reached a turning point this year, which is the main reason for the demand exceeding expectations. From a bidding perspective, Q4 is often a peak season for bidding. We have statistically found that out of the total bidding of 235.2GWh last year, 105.8GWh occurred in Q4, accounting for 45% of the annual bidding volume. Assuming that this year's bidding quarterly structure is the same as last year, the total annual bidding is expected to reach 465GWh. Even if we conservatively consider that this year's Q4 bidding volume remains flat with no growth compared to last year, the total annual bidding can still reach at least 361.6GWh.

1.  Active investment from social capital, with provinces issuing a large number of energy storage project indicators

Currently, after the issuance of Document No. 136 which "cancels mandatory energy storage requirements," investment in energy storage projects across the country has shifted from "I have to invest" to "I want to invest." According to statistics from Energy Storage Headlines, the list of energy storage projects released by various provinces this year has reached 505, with a total capacity of 85.59GW/250.1GWh. It is worth noting that unlike previous requirements for wind and solar projects to have a mandatory energy storage ratio, this year, due to the cancellation of mandatory energy storage, the aforementioned projects are declared by social capital based on investment demand, and then approved and issued by the government, which can be understood as the real investment demand from society, possessing a high degree of realization.

From the distribution of projects, Inner Mongolia, Hebei, and Shandong have a relatively high number of projects, reaching 77.4, 67.9, and 40.5GWh respectively, all of which are provinces with a high proportion of new energy installations and certain difficulties in consumption, reflecting a strong enthusiasm for energy storage investment in these provinces. Among them, Inner Mongolia has released 4 batches of energy storage project lists this year, totaling 44 projects with a total scale of 17.95GW/77.4GWh. The main investment entities are Inner Mongolia Energy Group and Inner Mongolia Power Group, both exceeding 8GWh.

Hebei has released 2 batches of projects, with the first batch "Public Notice of Projects Planned for 2025" issuing 37 project indicators with a capacity of 6.4GW/20.86GWh. The second batch "Independent Energy Storage Projects with Diverse Technology Routes" issued 97 indicators with a capacity of 13.8GW/47GWh. The two batches of projects are required to commence construction and connect to the grid by 2025 and 2026 respectively, indicating extremely strong investment enthusiasm.

1.  "Policy + Market" dual support, economic viability enhances multiple provinces becoming energy storage investment mines

This year, Gansu and Ningxia successively issued new capacity pricing policies for energy storage. The capacity pricing standards for Gansu and Ningxia are 330 yuan/kW/year and 165 yuan/kW/year respectively, which are higher than the capacity pricing of 100 yuan/kW/year released in Hebei in 2024. However, the energy storage capacity pricing policies in Gansu and Ningxia also have many differences compared to Hebei's policies, such as the capacity compensation standard being linked to the discharge duration of energy storage, with a baseline duration of 6 hours, meaning that the energy storage duration must reach 6 hours to obtain the capacity price according to the above standards; if it is less than 6 hours, the price will be discounted based on the duration In summary, the capacity electricity price reflects the policy's active guarantee of baseline returns for energy storage. In the future, the capacity electricity price for energy storage is expected to be promoted nationwide, similar to the capacity electricity price for coal power.

At the same time, Inner Mongolia's capacity compensation policy is even stronger. The "Notice on Accelerating the Construction of New Energy Storage" clearly states that independent energy storage put into operation by 2025 can receive a capacity compensation of 0.35 yuan/kWh, compensated based on the discharge amount to the grid, and this compensation will continue for 10 years. The compensation amount will be shared by the generating units based on their installed capacity. Recently, Henan's "Several Measures to Promote High-Quality Development of New Energy Storage in Henan Province (Draft for Comments)" provides a dual insurance of "bottom-line discharge electricity price + capacity electricity price." When revenue decreases due to spot market operations, it guarantees a bottom-line discharge electricity price of 0.383 yuan/kWh; for new energy storage projects that are not leased out, a matching capacity electricity price mechanism is provided; it also stipulates that adjustment power sources will be called in the order of energy storage, pumped storage, gas power, and coal power, reducing deep adjustments of coal power to give adjustment space to energy storage.

Currently, Inner Mongolia, with its advantageous capacity compensation of 0.35 yuan/kWh, massive new energy installations, and the presence of high-energy-consuming industries, has become a fertile ground for energy storage investment. Shandong's average annual peak-valley price difference reaches 0.45 yuan/kWh or even higher, making the peak-valley arbitrage market highly profitable. Hebei, due to energy storage's participation in medium- and long-term market arbitrage achieving two charges and two discharges, is also a fertile ground for energy storage investment. Meanwhile, Ningxia, Gansu, and eastern coastal provinces have each achieved economic viability through capacity electricity prices and auxiliary service market revenues, with most reaching a capital IRR of over 8%.

1.  Demand prosperity confirmed, raising next year's domestic new energy storage installation to 300GWh

We believe that the improvement in economics is the core reason for the strong domestic demand for energy storage. Many provinces have reached the IRR threshold of over 8%, with Inner Mongolia, Shandong, and Hebei offering substantial returns. The issuance of project indicators also confirms excellent economics and strong investment enthusiasm. From the bidding perspective, as mentioned above, this year's new bidding is expected to exceed 360GWh. Additionally, some projects from local enterprises and private enterprises will not undergo public bidding. Therefore, we raise next year's domestic new energy storage installation to 300GWh, with the improvement in economics leading the energy storage industry into non-linear growth being the main reason.

In this context, considering the demand for lithium batteries in passenger cars and commercial vehicles, we expect next year's total demand for lithium batteries to exceed 2700GWh, with a year-on-year growth rate of over 30%, of which the demand for energy storage batteries will exceed 900GWh.

 In terms of investment direction, we believe there are investment opportunities in key components such as energy storage batteries, system integration, and PCS. Among them, the battery segment is currently relatively tight, with certain price increase potential, making it a preferred segment at present. The integration segment, as a provider of the overall value chain of energy storage systems, has seen a surge in orders for leading enterprises, providing significant performance elasticity.

1.  Demand aspect: Changes in national infrastructure policies have led to power investment scale falling short of expectations; grid investment scale is below expectations; the decline in the growth rate of new energy installed capacity has led to a decrease in demand for power equipment; the growth rate of electricity consumption in society has slowed down; the bidding progress for the two networks is below expectations; the progress of ultra-high voltage construction is slower than expected.
    
2.  Supply aspect: Rising prices of commodities such as copper resources and steel; tight supply of power electronic devices, with domestic production progress falling short of expectations.
    
3.  Policy aspect: The support for the new power market is weaker than expected; the progress of the electricity pricing mechanism is below expectations; the advancement of the electricity spot market is slower than expected; the difference between peak and valley electricity prices is less than expected.
    
4.  International situation: The energy crisis has eased rapidly, and energy prices have fallen quickly; international trade barriers have deepened.
    
5.  Market aspect: Significant changes in the competitive landscape; intensified competition has led to lower-than-expected profitability in various segments of power equipment; rising costs such as transportation.
    
6.  Technology aspect: The progress of cost reduction in technology is below expectations; the reliability of technology is difficult to further improve.
    

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