Zhongtai Securities released a research report stating that for the utility-scale energy storage market, China's policy-driven approach is shifting to value-driven, with policy targets providing a floor and improved profitability models driving high future demand growth. For residential and commercial & industrial (C&I) storage markets, developed markets are primarily driven by improved economics and subsidy policies, while emerging markets are fueled by post-war reconstruction, electricity shortages, unstable power supply, and the replacement of diesel generators—these rigid demand drivers maintain strong industry momentum.
In wind power, 2025 will see significant fundamental recovery for the sector. Looking toward the 16th Five-Year Plan period (2026–2030), China's onshore wind market will grow steadily, while offshore wind is expected to double annual new installations compared to the 14th Five-Year Plan. Overseas, emerging markets in Asia, Africa, and Latin America will become new growth engines for onshore wind, while high-value markets like Europe, Japan, and South Korea will dominate offshore wind demand.
**Key Views from Zhongtai Securities:**
**Energy Storage: Demand Logic Reshaped, Global Ceiling Lifted** (1) **Utility-Scale Storage:** In China, the shift from policy-driven to value-driven demand, supported by policy targets and better profitability models, will sustain high growth. Overseas, the U.S. market is expanding due to AI data center (AIDC) development, high energy consumption, and load volatility. Europe, Australia, the Middle East, Africa, Latin America, and India also show strong demand, driven by rising renewable penetration, grid parity for solar-plus-storage, and diversified revenue models. (2) **Residential & C&I Storage:** Developed markets benefit from cost efficiency and subsidies, while emerging markets rely on post-war reconstruction, power shortages, and diesel replacement needs.
**Recommended Focus Areas:** (1) **System Integrators:** Leading players directly serving downstream customers, expected to benefit first. (2) **Power Conversion Systems (PCS):** High-barrier, export-oriented independent PCS suppliers. (3) **Thermal Management:** Oligopolistic leaders with new growth potential from data center liquid cooling. (4) **Residential & C&I Storage:** Channel-focused global leaders accelerating product expansion.
**Wind Power: Domestic Recovery, Offshore & Overseas as Core Themes** The 16th Five-Year Plan period will see strong demand: - **Onshore Wind:** Stable growth in China; emerging markets (Asia, Africa, Latin America) as new drivers. - **Offshore Wind:** China’s annual additions expected to double; Europe, Japan, and South Korea as high-value overseas markets.
**Key Sectors:** - **Turbines:** Domestic onshore turbine prices rebounding since late 2024, profitability recovery in 2025–2026. Offshore wind volume growth and global expansion support a "volume-price rebound" thesis. - **Gearboxes:** High-value, inflation-resilient components with a projected ￥40B+ market and favorable competitive dynamics. - **Offshore Wind:** (1) **Towers & Foundations:** Rising capacity utilization and product structure optimization in China; overseas supply gaps benefit fast-expanding players, especially in floating wind and vessel logistics. (2) **Submarine Cables:** Ultra-high-voltage, high-value cable demand surges in China; overseas opportunities mirror tower/foundation logic.
**Risks:** Domestic/overseas demand shortfalls; intensifying competition; geopolitical risks; outdated/biased data; industry miscalculations.
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