California’s grid batteries now replace peaker plants during peaks, while China races to scale storage; experts say market reforms will decide whether batteries truly displace coal across its power system.
California’s battery storage systems are transforming how electricity grids manage peak demand, offering important lessons for countries aiming to reduce reliance on fossil fuels. As China rapidly expands its own energy storage capacity, experts say the paths are similar but not identical.
In California, large-scale batteries store electricity during the day and release it in the evening when demand peaks. During high-load periods, batteries can supply roughly one quarter of the state’s peak electricity needs. On August 6, 2025, the California Independent System Operator (CAISO) recorded 11.2 gigawatts of electricity discharged from batteries during the evening peak, setting a new record. These systems now regularly reduce reliance on fossil fuel “peaker” plants, which traditionally turn on only during high-demand periods. Daniel Snowden-Ifft, a physicist and energy analyst, says California’s rollout shows that with the right market structures, storage can replace fossil fuel backup rather than just supplement it.
China, the world’s largest electricity consumer, has also expanded storage rapidly, surpassing 70 gigawatts of installed capacity by mid-2025. Most of this is lithium-ion battery systems used to balance variable solar and wind generation. Bian Guangqi, deputy director of China’s energy technology department, explains that storage is essential in regions with high renewable output.
However, experts note that policy and market rules often limit how much Chinese storage is actually used. Cosimo Ries, an energy analyst, observes that without reforms in electricity pricing and grid dispatch, China’s storage capacity may not fully replace coal-based backup.
Analysts including Kristen Panerali from the World Economic Forum and Zhang Xun from Accenture stress that China’s strategy will be pivotal to meeting climate commitments. Gang He adds that successful decarbonization requires coordinated policy, grid modernization and market reform, not just technology deployment.
California’s experience demonstrates what is possible when storage is integrated with renewables and proper market design. China’s massive storage build-out shows the potential of scale and industrial leadership. As renewable energy grows worldwide, energy storage will increasingly define how grids operate, reduce emissions and maintain reliability, becoming a key tool in the global transition to cleaner electricity.
