How AI-driven energy storage powers China's 'double carbon' ambition

China's energy storage system (ESS) industry is accelerating rapidly in 2025, fueled by the nation's soaring renewable energy capacity. This surge is crucial for China to meet its ambitious "carbon peak" and "carbon neutrality" goals, as experts highlight the revolutionary impact of energy storage on the power system.

As of the end of May, China's total installed power generation capacity reached 3.61 billion kilowatts (kW), marking an 18.8 percent year-on-year increase, according to China's National Energy Administration's (NEA) latest data on Saturday.

Notably, photovoltaic (PV) power generation capacity saw significant growth. From January to May, nearly 200 million kW of new grid-connected PV capacity were added, marking a 57 percent year-on-year increase. This remarkable expansion has pushed China's cumulative installed PV power generation capacity past the 1 billion kW mark, reaching 1.08 billion kW – equivalent to the total installed capacity of approximately 48 Three Gorges Dams.

This rapid expansion in renewables, however, intensifies the need for robust energy storage solutions. Due to the inherent intermittency and variability of new energy sources like solar and wind, energy storage is becoming indispensable for integrating renewables into the grid and ensuring a stable power supply. 

ESS technologies encompass various forms, including pumped hydro storage, battery storage, thermal storage, and mechanical storage, each offering unique advantages and applications.

"The significance of energy storage for transforming the power system is revolutionary," said Liu Yafang, former deputy director-general of NEA.

Storage gap fuels market growth

Despite rapid growth, the country's energy storage capacity is still "far from sufficient" to match its new energy capacity, said Liu, who's now a part-time professor at Zhejiang University, said in a telephone interview with CGTN.

"Under the traditional power model, electricity had to be generated and consumed instantly. The large-scale development and grid integration of new energy sources bring rapid growth, but also challenges in absorption and stability," Liu explained.

The development of new-type energy storage was first highlighted as a "new quality productive force" in the 2024 Government Work Report. This underscores its strategic importance in building a new-type power system, a key commitment under China's "carbon peak" and "carbon neutrality" pledges.

As a "new quality productive force," the advancement of ESS necessitates the establishment of a corresponding "production relationship," Liu went on to elaborate. This includes meticulous planning for ESS plants, standardized integration between energy storage and the wider power grid, and innovations in the ESS product itself, alongside the development of effective energy storage pricing mechanisms.

Further boosting the demand for energy storage is a notice released in February by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA). The notice said that starting June 1 this year, China's all new energy power generation connected to the grid will fully enter the electricity market and undergo market-based transactions, with grid-connection tariffs determined by the market.

"New energy cannot enter the market without energy storage," Liu emphasized, adding that it's impossible to generate revenue without energy storage.

AI driving safety and efficiency

While the demand for ESS grows, and both product quality and capacity continue to be refined, the role of energy management systems (EMS) is becoming increasingly vital for ensuring the safe and efficient operation of energy storage facilities.

"In the absence of next-generation materials for energy storage batteries, effective safety management beyond the battery cells themselves is crucial," stated Shi Zinan, director of the Smart Microgrid Institute at Tsinghua Sichuan Energy Internet Research Institute.

Syi Tsing Technology that makes intelligent Battery Management Systems (BMS) conducted an analysis based on industrial data. It revealed that frequent failures in BMS and Thermal Management Systems (TMS) during operation are the primary safety hazards in energy storage power stations. Among thousands of safety hazards and early faults detected cumulatively, internal battery faults (such as abnormal degradation) accounted for only 2.4 percent, while external system safety hazards, primarily BMS failures and TMS faults, accounted for over 90 percent.

"If these early hidden dangers persist, they will significantly accelerate battery degradation and greatly increase the risk of thermal runaway," Shi warned in an interview with CGTN.

New technologies, particularly Artificial Intelligence (AI), are now pushing the boundaries of safety control in energy storage. Several Chinese companies have developed BMS systems that integrate specialized data anomaly pattern recognition with deep reasoning techniques from large AI models like DeepSeek for intelligent fault diagnosis and smart operation and maintenance strategies.

"AI-driven energy storage systems can ensure safety and intelligent operation and maintenance," Shi explained. "AI also empowers energy storage transactions, enhances economic benefits, and assists in grid efficiency regulation."

Liu echoed this sentiment, adding, "The emergence of new technologies, especially the vigorous development of AI technology in China, will undoubtedly promote the application, deployment, and high-quality development of energy storage, for instance, in optimizing energy storage operational strategies."

The ultimate value of new-type energy storage lies in its potential to drive the transformation of the energy system – shifting from a "fossil-fuel-dependent, centralized supply" model to a "renewable energy-dominated, distributed and centralized collaborative" model.