Beyond battery expansion: how storage delivers value to the power system

Ningde’s October 15 conference emphasized avoiding blind battery expansion and developing storage applications; MIIT’s report announced no approvals or subsidy rules.¹

For the supply chain, the practical question is how batteries, once manufactured, become reliable energy services that earn revenue. Answering it requires distinguishing battery manufacturing from the operation of storage projects. Manufacturers focus on materials, processes, yields and shipments. Operators must also decide when to charge and discharge, whom they serve and how those services are paid for. More manufacturing capacity can improve equipment supply, but cannot by itself replace the access arrangements and market rules governing power systems.

Archival photograph: the Theiss battery-storage facility in Austria, 31 July 2024. Bp 95 / Wikimedia Commons, CC BY 4.0.

Falling costs widen the scope for applications

The International Energy Agency’s April 2024 report, Batteries and Secure Energy Transitions, offers historical data that help explain the industry’s evolution. Between 2010 and 2023, lithium-ion battery prices fell from about USD 1,400 per kilowatt-hour to less than USD 140, a decline of roughly 90%. The report links that change to research and development and manufacturing economies of scale. Lower prices helped batteries move from being important components of consumer electronics to large-scale inputs into transport and electricity systems.²

The same report records 42 gigawatts of battery-storage capacity additions in the global power sector in 2023, with deployment more than doubling from the previous year. These figures describe the historical 2023 baseline. Gigawatts measure power; gigawatt-hours measure stored energy.

Falling costs matter for more than the price of batteries themselves. Lower equipment expenditure can bring previously less economic applications into consideration, including utility-scale installations, storage on the customer side of household and business meters, and small off-grid power systems. Yet battery prices and the cost of a complete project remain different measures. When discussing project costs, the IEA explicitly includes installation, other components and development expenses. Buyers comparing options solely through cell prices could therefore overlook other spending needed to deliver the same service.

A battery can serve different needs

Storage can be understood through time: it moves electricity from one period to another, helping address mismatches between generation and consumption. The IEA identifies batteries as well suited to providing short-term flexibility for one to eight continuous hours, while also responding quickly to system signals to support grid stability. These are distinct functions. One emphasizes the ability to supply electricity over a period; the other emphasizes speed and precision.²

Evaluating a project therefore requires more than asking how many batteries it contains. Is it addressing an evening demand peak, local network congestion or an operational problem requiring rapid adjustment? Planned capacity, actual operation and revenue sources need to align. When the service offered does not match local system needs, more equipment may not deliver a corresponding increase in useful value.

Applications also influence technology choices. Looking back at the 2023 market, the IEA reports that lithium iron phosphate batteries accounted for around 80% of new battery storage that year. It explains that energy density is generally less important in stationary storage than in vehicles, giving factors such as cost and lifetime greater weight. Technology choices consequently need to reflect the intended use rather than a comparison of a single performance metric.

Archival photograph: the interior of a KJUUBE battery-storage cabinet for photovoltaic systems, 30 November 2020. Asurnipal / Wikimedia Commons, CC BY-SA 4.0.

Market rules determine whether services generate revenue

Technical capability does not automatically bring an operator payment. The IEA’s policy recommendations emphasize access to appropriate markets and price signals that recognize batteries’ different contributions to the power system. The report also discusses customer-side batteries: tariffs that better reflect changes in system costs can help align users’ charging and discharging decisions with grid needs.³

That explains why discussion of the storage industry cannot stop at the factory gate. After equipment is delivered, a project still has to operate within a specific electricity system and trading environment. Businesses should give equipment-performance validation and revenue-assumption validation comparable importance. The first asks whether the task can be performed consistently; the second asks who will pay for it and under which rules.

Where feasible, the IEA also suggests aggregating distributed customer-side batteries into virtual power plants capable of providing services similar to larger installations. The central task is coordinating many smaller resources, rather than simply adding up their equipment capacities. Whether projects can be aggregated, which markets they may enter and how services are measured and settled depend on local rules.

Long-term demand does not guarantee every expansion succeeds

Assessing battery demand also requires separating historical statistics from scenario calculations. In the Net Zero Emissions by 2050 Scenario in its 2024 report, the IEA puts global battery-storage power capacity at around 1,200 gigawatts in 2030. This describes changes needed along a particular energy and climate pathway, rather than an unconditional forecast of orders.²

The report also highlights geographic concentration along the battery supply chain, from mining and materials processing to cell manufacturing. It identifies technological innovation, recycling and diversification of supply as important areas of attention. Expanding production is therefore only one dimension of industrial development. Supply reliability, material efficiency and the management of products at the end of their useful lives also shape long-term competitiveness.

For observers of the industry, the most useful evidence concerns operating quality: whether projects have clearly defined applications, whether equipment performs as expected, whether system services receive sustained remuneration and whether genuine demand supports expansion plans. Aggregate demand can create opportunities, but individual businesses must still pass through these stages to convert them into earnings. Connecting growth in manufacturing scale with effective demand at the point of use offers a fuller understanding of storage’s industrial value.

Source notes

1. 2026-10-16 18:45 · 2026 World Energy Storage Conference held in Ningde (translated title) · MIIT. ↩

2. 2024-04-25 · IEA, Batteries and Secure Energy Transitions — Executive summary, IEA, Paris. Full report, licensed under CC BY 4.0. Globalbole has selected and adapted the report’s text and added analysis, retaining the original dates and scope of data and scenarios. No IEA photographs, cover images or logos are used. This is a work derived by Globalbole from IEA material and Globalbole is solely liable and responsible for this derived work. The derived work is not endorsed by the IEA or its Member countries in any manner. ↩ ↩² ↩³

3. 2024-04-25 · IEA, Batteries and Secure Energy Transitions — Policy implications and recommendations, IEA, Paris. Part of the same report as note 2, with the same licence and adaptation notice. ↩