(Yicai) March 11 -- China should put an end to cutthroat competition in the energy storage industry, the chairman of Chinese battery manufacturer Tianneng Holding Group and deputy to the National People's Congress said at the Two Sessions, the country's annual policy-setting meetings.

China's energy authority and other relevant departments should improve procurement standards for energy storage projects by incorporating key metrics, such as levelized cost of energy, battery lifecycle and degradation rate, and safety redundancy configuration levels, into bidding evaluations, Zhang Tianren suggested.

He also called for working with industry associations to develop quantifiable implementation rules and safety technical thresholds, steering capital and competition toward technological innovation and long-term value.

This year's Government Work Report released during the Two Sessions called for using a combination of capacity regulation, standards-setting, and quality supervision to thoroughly address involution-style competition.

"The electrochemical energy storage industry has fallen into severe irrational price competition in recent years," Zhang said. "Prices of key equipment have plunged around 80 percent over the past three years, with some prices persistently remaining below the industry's average production cost." 

In the first half of last year, net profit margins at leading energy storage companies fell to around 3 percent, Zhang noted, warning that this irrational competition has evolved into systemic risks for users, prompting some firms to cut corners on cell quality control, system integration, and safety redundancy design in pursuit of short-term market share.

China's installed capacity of new-type energy storage reached 136 gigawatts at the end of last year, up 84 percent from a year earlier and accounting for over 40 percent of the global total, with lithium-ion battery storage contributing about 96 percent.

The country aims to raise the figure to 180 gigawatts by the end of next year, according to an action plan issued by the National Development and Reform Commission and other government departments in August last year.

As wind and solar power become the dominant sources of new installed capacity, the new power system's reliance on energy storage will continue to grow, according to analysts.

Editor: Futura Costaglione