- China led 54% of global energy storage in 2025.
- Lower battery costs drive strong growth in the storage industry.
China dominated the global energy storage market in 2025 and is expected to maintain its leadership well into the next decade, according to Wood Mackenzie’s projections. Despite rising policy uncertainty, the country delivered 54% of global energy storage installations last year. As a result, China remained the most significant contributor to global capacity growth.
Globally, energy storage installations reached a record 106 GW in 2025. This figure represented a 43% increase compared with 2024. Consequently, total global energy storage capacity rose to around 270 GW.
In an insights report on its website, Wood Mackenzie highlighted that energy storage now forms a core pillar of the global energy transition. Therefore, it continues to support the integration of renewable energy and strengthen grid stability.
Looking ahead, Wood Mackenzie projects global energy storage capacity will reach 1,545 GW by 2034. China is expected to account for nearly half of all new additions between 2025 and 2034. However, the consultancy warned that China faces emerging challenges.
In particular, the removal of mandatory renewable-storage coupling rules could slow progress. Moreover, the absence of clear revenue frameworks introduces uncertainty as the market enters 2026 and 2027.
Nevertheless, China continues to expand renewable generation and energy storage to replace higher-cost gas-fired power. Battery costs have dropped by more than 50% over the past three years. At the same time, China installed 42 GW of grid-connected energy storage in 2025, excluding pumped hydro. This amount doubled the new gas power added in 2024.
Consequently, gas generation’s share of total output remained essentially flat in 2025. Wood Mackenzie observed that this trend sends a strong signal to the global LNG industry.
Meanwhile, the United States energy storage market also showed robust growth. Installations increased by 53% year-over-year in 2025, despite policy reversals. Although reconciliation legislation imposed new supply chain restrictions for projects seeking federal tax credits, developers acted quickly.
Large-scale forecasts increased after the bill passed, supported by announcements of domestic battery manufacturing facilities and significant electricity demand commitments. Developers also built more than 13 GW of “safe-harboured” projects under prior policy rules.
Key growth drivers in the US included capacity-constrained power markets, state-level incentives, and battery augmentation projects. Around 12% of existing systems received capacity upgrades in 2025, creating a rapidly expanding market segment.
Wood Mackenzie expects moderate global growth in 2026, driven by policy transitions in China and the US. However, long-term prospects remain strong. Government tenders and support schemes continue to drive deployment, particularly in the on-grid segment, which contributed 82% of installations last year.
Overall, declining battery costs, improved project economics, and expanding revenue streams will keep utility-scale energy storage at the forefront of global growth through 2034.