A staggering 295% increase! In the 2026 energy storage market, long-duration storage will reign supreme!

01. Scale Nearly Triples

According to incomplete statistics from the CESA Energy Storage Application Branch Industry Database, the grid-connected scale of long-duration energy storage projects in China reached 4.16GW/17.05GWh in the first quarter of this year, representing a year-on-year increase of 285% (power)/295% (capacity). This nearly three-fold increase demonstrates that long-duration energy storage has truly transformed from an "optional" to a "must-have" for new power systems.

In fact, in 2025, the newly installed capacity of 4-hour energy storage projects in China reached 26.7GW/106.8GWh, accounting for 41.3% (power)/54.3% (capacity) of the total newly installed capacity of new energy storage—meaning that long-duration energy storage already accounted for half of the newly installed capacity of new energy storage in 2025.

Entering the first quarter of 2026, the growth momentum has not diminished but rather increased. The total newly installed capacity of new energy storage in China reached 13.49GW/35.89GWh, representing year-on-year growth of 147.98% (power)/176.93% (capacity). Among these, grid-side projects saw a significant year-on-year increase of 293.93%, which is precisely the core application scenario for long-duration energy storage.

In the bidding market, the signals are even clearer. In the first quarter of 2026, the total capacity of energy storage projects awarded nationwide reached 38.087GW/174.288GWh, representing a year-on-year increase of approximately 66%. In terms of capacity, 2-hour energy storage systems accounted for 43.95%, 4-hour systems for 36.96%, and systems with capacities exceeding 4 hours for 13.14%—long-duration energy storage accounted for over 50% of the total. In Beijing Jianglai Energy's 2026 6GWh energy storage system procurement, 4-hour systems accounted for a staggering 83% of the demand, while traditional 2-hour products accounted for only 17%.

Regarding regional distribution, long-duration energy storage is highly concentrated in major renewable energy provinces rich in wind and solar resources. Looking at the grid connection data for the first quarter, the Northwest region leads by a wide margin with a scale of 2.24GW/9.37GWh. Xinjiang added 7.51GWh of installed capacity in the first quarter, with an average storage duration of 3.5 hours, ranking first in the country. Inner Mongolia and Ningxia closely with 5.74GWh and 5.4GWh respectively. These three provinces together accounted for more than half of the national new capacity added in the first quarter.

This "Northwest-centric" regional distribution profoundly reflects the irreplaceable role of long-duration energy storage in solving the problem of high-proportion renewable energy consumption.

02. Policy-Driven Growth and Economic Boost

The explosive growth of long-duration energy storage is both a result of market forces and inseparable from the catalyst of national policies.

On January 30, 2026, the National Development and Reform Commission and the National Energy Administration jointly issued the "Notice on Improving the Generation Side Capacity Price Mechanism" (NDRC Price [2026] No. 114), which for the first time clearly established a new independent grid-side energy storage capacity price mechanism at the national level.

The value of this document cannot be overstated—it breaks the long-standing predicament of the energy storage industry, which relied solely on peak-valley price arbitrage and fragmented subsidies for survival, providing a stable "bottom-line wage" for independent energy storage.

According to the core pricing logic of Document No. 114: the electricity price level of grid-side independent new energy storage capacity is based on the local coal-fired power capacity price standard, and is calculated according to a certain proportion based on peak capacity (the conversion ratio is the full-power continuous discharge time divided by the longest net load peak duration throughout the year, not exceeding 1).

The conversion formula is as follows: Conversion ratio = Full-power continuous discharge time ÷ Longest net load peak duration throughout the year (not exceeding 1)

("Longest net load peak duration throughout the year" refers to the longest net load peak duration in a certain province throughout the year. Judging from the electricity spot market price curves in various regions, the longest duration may be 4 hours, 6 hours, or even longer.) As can be seen from the formula, the revenue of energy storage projects is directly linked to their full-power continuous discharge time; the longer the discharge time, the higher the revenue, directly forcing the industry to upgrade to long-duration energy storage (4 hours and above).

Regarding coal-fired power capacity pricing standards, the current national standards are mainly divided into three tiers: 165 yuan/kW·year, 231 yuan/kW·year, and 330 yuan/kW·year, corresponding to 50%, 70%, and 100% of the fixed costs of coal-fired power units, respectively.

Previously, Gansu Province had already issued a similar policy, becoming the first province to implement such a policy. It explicitly stated that the capacity pricing for independent energy storage would be the same as that for coal-fired power units, at 330 yuan/kW·year, and that the longest peak net load duration throughout the year would be tentatively set at 6 hours. According to the conversion formula, 2 hours of energy storage would only receive 1/3 of the capacity pricing, 4 hours would receive 2/3, and 6 hours would receive the full amount, instantly highlighting the economic advantages of long-duration energy storage.

The release of policy dividends has directly propelled a qualitative leap in the economics of energy storage projects. Taking a typical 100MW/500MWh (5-hour) independent energy storage project as an example, in the absence of capacity pricing, relying solely on spot price arbitrage, the project's internal rate of return (IRR) is only 2.8%, far below industry financing costs, making it almost unattractive. However, after implementing the high-value capacity pricing of 330 yuan/kW·year, the project's IRR jumps to 12.8%, the investment payback period is shortened to 3.5 years, and its attractiveness is significantly enhanced.

National-level top-level design has been rapidly implemented at the local level. To date, nine provinces nationwide—Hubei, Gansu, Ningxia, Hebei, Inner Mongolia, Guangdong, Zhejiang, Shandong, and Xinjiang—have taken the lead in implementing independent energy storage capacity pricing/compensation policies, covering five major regions: Northwest, North China, East China, South China, and Central China.

03. The Long-Duration Energy Storage Sector is Flourishing in Multiple Areas

The explosive growth of long-duration energy storage is inseparable from the iterative maturation of technology. In 2026, the long-term energy storage technology landscape is showing a pattern of "lithium-ion battery as the foundation, with diversified technologies coexisting"—no single technology can solve all problems, and different technologies excel in different scenarios.

Lithium iron phosphate (LFP) remains the mainstay of long-term energy storage. The core reason why lithium batteries have become the mainstay of long-term energy storage lies in their cost advantage—in 2025, the average price of LFP energy storage systems was only 0.5356 yuan/Wh, while the price of vanadium redox flow battery energy storage systems was four times higher. Faced with the explosive growth in demand for long-term energy storage, leading companies have launched ultra-large capacity cells of 600Ah+. As ultra-large cell technology matures, the penetration of lithium batteries into 6-8 hour long-term energy storage scenarios will further accelerate.

Vanadium redox flow batteries (VRBs) are one of the most promising technologies in the long-term energy storage field. Compared with traditional lithium batteries, VRBs have three core advantages:

First, long lifespan: VRBs can cycle tens of thousands of times, with a lifespan exceeding 20 years, far surpassing the 8-10 years of lithium batteries, significantly reducing the total life-cycle cost of energy storage projects.

Second, high safety: Using an aqueous electrolyte, there are no risks of thermal runaway, explosion, or fire. It can achieve 100% deep discharge, and even if leakage occurs, it will not cause serious environmental pollution.

Third, flexible capacity expansion: Power (stacking) and capacity (electrolyte) can be designed separately. To increase energy storage capacity, only the size of the electrolyte storage tank needs to be increased, without replacing the stack. Expansion is low-cost and easy, adaptable to the needs of energy storage projects of different scales.

Data shows that in 2025, VRBs will add 1.06GW/4.45GWh of new installed capacity, accounting for more than 96% of the total installed capacity of flow batteries. Meanwhile, the electrolyte leasing model is becoming increasingly large-scale, reducing initial investment for owners by 40%-50%, significantly alleviating the initial cost pressure of vanadium batteries. With continued cost reduction across the industry chain and increased domestic production of separators, vanadium redox flow batteries are expected to reach a turning point in commercialization acceleration in 2027.

Besides flow batteries, sodium batteries are also gradually emerging as a rising star in the long-term energy storage sector due to their resource advantages and environmental adaptability.

The core advantage of sodium batteries is that they eliminate dependence on scarce lithium resources—sodium is extremely abundant on Earth, 1000 times more abundant than lithium, and can be easily obtained from natural resources such as seawater and salt lakes. Raw material costs are about 40% lower than lithium, eliminating the "resource bottleneck" problem associated with lithium batteries and reducing raw material costs for energy storage projects.

At the same time, sodium batteries have very strong environmental adaptability, operating stably in harsh environments ranging from -40℃ to 60℃. Their low-temperature capacity retention rate is far higher than that of lithium batteries, making them particularly suitable for long-term energy storage needs in low-temperature and high-altitude scenarios such as wind power bases in Northwest China (Xinjiang and Gansu) and high-altitude photovoltaic power stations in Southwest China. 2026 is a pivotal year for the sodium battery industry, marking its transition from laboratory research to large-scale application.

On February 5th, Changan Automobile officially launched its global sodium battery strategy, partnering with CATL to launch the world's first mass-produced sodium battery passenger vehicle, expected to officially launch in mid-2026. This model demonstrates outstanding performance in extreme low-temperature environments, with its discharge power nearly three times higher than conventional lithium iron phosphate batteries at -30℃, capacity retention exceeding 90% at -40℃, and even stable operation at -50℃, showcasing the superior low-temperature performance of sodium batteries.

Notably, to support the large-scale application of sodium batteries, CATL announced plans to build over 3,000 "chocolate-shaped" battery swapping stations nationwide by 2026, covering more than 140 cities and constructing a complete sodium battery ecosystem. Furthermore, CATL has invested nearly 10 billion yuan in sodium battery technology research and development, aiming to achieve a lower overall cost for sodium batteries than lithium batteries by 2028. In addition to Changan Automobile, CATL will also collaborate with JD.com and GAC Group to launch mass-produced models equipped with sodium batteries, expected to be available in the second quarter of 2026.

A research report from Dongguan Securities points out that more than 15 domestic companies have already achieved breakthroughs in the mass production of sodium batteries, and overseas automakers such as BMW and Toyota are also accelerating their deployment. The large-scale application of sodium batteries will further promote their popularization in the field of long-term energy storage.

Besides lithium batteries, flow batteries, and sodium batteries, long-term energy storage technologies such as compressed air energy storage and gravity energy storage are also accelerating breakthroughs, forming a diversified technological landscape.

Compressed air energy storage offers advantages such as megawatt-scale capacity, long duration, and low cost, making it suitable for large-scale grid-side long-duration energy storage projects. Gravity energy storage utilizes gravitational potential energy to store and release electrical energy, featuring long lifespan, no pollution, and low cost, adapting to various long-duration energy storage needs.

Notably, hybrid energy storage is becoming a major path for leveraging the strengths of different technologies in long-duration energy storage. New power systems have increasingly diverse requirements for energy storage power, duration, and response time, making it difficult for a single technology to meet all needs. Hybrid energy storage, by combining multiple energy storage methods, offers both economic efficiency and stability. The 400MW/1600MWh project in Ganquanbao, Xinjiang, adopted a multi-technology approach combining lithium iron phosphate, sodium ion, and vanadium redox flow batteries, becoming the largest hybrid electrochemical shared energy storage project in Xinjiang. Hybrid energy storage is becoming an important way for non-lithium technologies such as flow batteries and sodium batteries to penetrate the market.

As various long-duration energy storage technologies continue to mature and costs continue to decline, the economic viability of long-duration energy storage projects will be further improved, driving rapid industry development.

04. Long-duration energy storage projects will be a key focus in 2026.

The support of capacity pricing policies, the driving force of power system demand, and technological innovation will jointly propel the long-duration energy storage market to explosive growth in 2026.

In terms of market size, industry forecasts predict that the proportion of 4-hour and above long-duration energy storage in new installations will rapidly increase from approximately 35% in 2025 to 60% in 2026 and 80% in 2027. During the 15th Five-Year Plan period (2026-2030), the total installed capacity of new energy storage in China will experience explosive growth. Many major wind and solar power provinces have planned new installations at the gigawatt-hour (GWh) level, driving investment exceeding 300 billion yuan. Long-duration energy storage will dominate this growth, becoming the core driver of market growth.

In terms of regional distribution, areas with high renewable energy penetration and heavy grid pressure will be the key areas for long-duration energy storage projects.

The first tier primarily comprises northwestern regions such as Gansu, Ningxia, and Inner Mongolia. These areas have renewable energy penetration rates exceeding 50%, abundant wind and solar resources, but their load centers are geographically distant, leading to significant "wind and solar curtailment" issues and a pressing need for long-duration energy storage. Gansu, in particular, offers a high energy storage capacity tariff compensation standard of 330 yuan/kW·year, which will significantly drive the deployment of long-duration energy storage projects.

The second tier includes eastern and central provinces such as Shandong, Zhejiang, and Hubei, with renewable energy penetration rates between 30% and 50%, where market demand will gradually be released.

The third tier includes northeastern and southwestern regions with lower renewable energy penetration rates. These areas are currently still planning capacity tariff policies, and the long-duration energy storage market will gradually take off.

Furthermore, it's worth noting that with the accelerated integration of AI and energy storage, the demand for energy storage configurations in AI Data Centers (AIDCs) is becoming a new growth engine. The 2026 Government Work Report included "computing and power synergy" in the new infrastructure project for the first time, coupled with the red line that newly built data centers at national hub nodes must have a green electricity ratio exceeding 80%, making AIDC energy storage another growth engine for long-term energy storage. 1GW of computing power consumes approximately 7000GWh of electricity annually. Traditional power grid infrastructure struggles to quickly respond to the electricity demands of AIDCs, making long-term energy storage crucial for solving power supply bottlenecks. Industry forecasts predict that by 2030, the energy storage configuration scale of AI data centers will reach 300GWh, with the first batch of projects expected to be implemented in 2026. The combination of direct green electricity connection and AIDC energy storage is opening up a completely new market space.

Undeniably, the explosive growth of the long-term energy storage market in 2026 will also be accompanied by certain challenges: the progress of local implementation details, further optimization of technology costs, and the improvement of project evaluation mechanisms are all issues the industry needs to address. However, in the long run, with the implementation of the two-step plan outlined in Document No. 114 (fixed capacity tariffs from 2026 to 2028, by a transition to a reliable capacity compensation mechanism after the spot market matures), the business model for long-duration energy storage will become more mature, the technological roadmap clearer, and the market environment more standardized.

A new era for long-duration energy storage has begun.