Overseas demand and market share
Chinese energy storage system (ESS) manufacturers, including CATL and Gotion High-tech, are reportedly benefiting indirectly from growing demand for overseas green energy projects as heightened military tensions in the Middle East support fossil fuel prices. Rising demand for large-scale renewable energy integration in the Middle East and Southeast Asia appears to be offsetting weakness in share prices across the supply chain amid a slowing domestic market.
According to Hong Kong's South China Morning Post (SCMP) on October 30, demand for battery energy storage systems (BESS) is rising rapidly, particularly in the Middle East and Southeast Asia, as fossil fuel prices remain high because of the Middle East conflict.
Lucas Zhang Liutong, a director at consultancy WaterRock Energy Economics, assessed that systems combining solar and wind generation with BESS have become cost-competitive with new liquefied natural gas (LNG) combined-cycle power generation in Asia. Demand for Chinese BESS is consequently expected to expand substantially over the coming years, particularly in countries with large sites available for solar power.
Chinese companies hold a dominant share of the global market. According to Taiwanese market research firm InfoLink, 9 of the top 10 global BESS integrators by shipments in the first half of this year were Chinese companies, with BYD ranking first. Separately, energy market research firm SNE Research found that Chinese suppliers, led by CATL, occupied all of the top 10 positions for global ESS battery cell shipments in the first half.
Delivery schedules and overcapacity concerns
In addition to competitive pricing, Chinese suppliers are pursuing overseas markets with high quality, rapid delivery and specialist staff supporting long-term operation and maintenance for more than 20 years. Gotion High-tech and BYD have shortened delivery times for some overseas projects from 5 to 7 months to around 3 months. At the end of September, Gotion shipped its first batch of 50 truckloads for Africa's largest standalone project in Egypt, just 3 months after signing the contract. BYD has begun construction of Poland's largest battery storage manufacturing facility, with a capacity of 2.4 GWh, targeting the start of commercial operations by the end of 2027.
However, some observers have warned that sharply shortened delivery schedules could signal excess production capacity, or oversupply, in China's battery industry and overheated competition in overseas markets.
In response, CATL dismissed overcapacity concerns in its recent earnings announcement, stating that global BESS demand would remain robust in 2027. Despite slower third-quarter net profit growth, CATL management said market concerns about global battery demand were excessive and that favorable growth potential would continue.
Original Korean article: Segye Ilbo
English brief by Korea Wind Intelligence, koreawindintel.com
