Energy Storage Tenders Frequently "Brake" as Industry Chain Prices Rise Across the Board

Recently, the EPC contract for the 100MW/200MWh standalone ESS project in Xigang Town, Tengzhou City, Shandong Province, issued a termination announcement, just one day after the tender notice was released, citing “major changes” as the reason.

Also in July, the EPC for the 200MW/800MWh standalone ESS project in Wusu City, Xinjiang, again issued a tender termination announcement, citing “major adjustments to the construction content,” marking the third termination of the bidding process for this project.

Looking back at the Wusu project’s bidding trajectory, its first tender was in November 2025, with a budget of 730 million yuan, equivalent to 0.91 yuan/Wh, later terminated due to major changes in the technical specifications; after restarting, the budget was raised to approximately 807 million yuan, with the unit price rising to 1.01 yuan/Wh. In January 2026, the winning bid result was announced, with PowerChina Jiangxi Electric Power Construction winning the bid at 0.94 yuan/Wh.

However, in June this year, the bid inviter issued another termination announcement, stating that “the bid winner’s own reasons led to the inability to perform the project normally,” thus deciding to re-tender. Regrettably, after the third re-tender, it was once again announced as terminated.

In a short period, two major energy storage projects have failed one after another, with repeated tenders and frequent changes—this is not an isolated incident, but a concentrated manifestation of deep-seated industry issues.

Frequent “Sudden Braking” in Energy Storage Tender Projects

Sounding the Alarm for the Industry

Statistics from institutions show that in May this year, the energy storage EPC tender capacity scale in the Chinese market exceeded 43 GWh. However, while the scale shot up, there were also clear terminations and failed bids. Throughout the month, a total of 12 energy storage EPC projects issued cancellation or tender termination announcements, with a combined scale exceeding 5 GWh, about one-third of which were concentrated in Shanxi Province; additionally, projects in Gansu, Anhui, Liaoning, Jilin, Inner Mongolia, Henan, and other provinces were also terminated successively.

Looking at the reasons for termination, they broadly fall into the following categories: cost restructuring triggered by raw material price fluctuations, adjustments to tender plans and revision of project schemes, suspension due to changes in investment plans, failed bids caused by insufficient qualified bidders, breach of contract, bid abandonment, or disqualification due to violations by the winning bidder, and changes in the bid inviter’s circumstances.

Industry analysis points out that this reflects common problems in the industry: first, some enterprises blindly bid for scale with inadequate risk assessment, leading to frequent bid abandonment and contract breaches after winning; second, many projects have weak preliminary evaluations, with construction plans and supporting conditions changing frequently even after the tender is launched, causing mid-tender cancellations and construction delays.

Notably, amidst the frequent tender terminations, the Shanxi Provincial Energy Bureau recently issued the “Notice on Optimizing the Management of New-type Energy Storage Projects,” setting a clear timetable for the full-cycle management of energy storage projects. The document explicitly aims to resolutely prevent “land-grabbing without construction,” requiring projects to commence substantial construction within 6 months after entering the project library, and to be completed and connected to the grid within 12 months, effective from September 1, 2026.

In terms of the dynamic adjustment mechanism, the new-type energy storage project library will be adjusted at least twice a year in principle. For projects in the library that cannot be completed and connected to the grid on schedule, provided that the fixed asset investment included in statistics reaches no less than 30%, the project unit may submit an extension application to the municipal energy bureau two months before the library period expires, and in principle, library projects may only be extended once. For electrochemical energy storage projects, the grid connection extension shall not exceed 6 months; for ESS projects with longer construction periods, such as compressed air and flow batteries, the extension shall not exceed 12 months. Projects that have not commenced substantial construction within 6 months of entering the library, or that have not been completed and connected to the grid within 12 months and have not applied for an extension, will be directly removed from the library.

Meanwhile, the new national energy storage safety standards, which officially took effect on July 1 this year, and the “Regulations on the Determination Standards for Major Accident Hazards in Electric Power and Supervision Management of Governance” (Order No. 41 of 2026), have imposed higher requirements on the grid-connection performance and fire protection design of ESS power stations. This means that some previously approved projects may need re-adjustment, forcing their progress to slow down.

Clearly, on one side, there is disorder in project execution compliance and numerous variables; on the other side, regulatory constraints are tightening comprehensively, from construction period limits to safety standards. As the gap between “winning projects” and “building projects” becomes increasingly pronounced, hard policy constraints are forcing the industry to abandon extensive expansion and shift from “scale priority” to “execution is king.” In this process, the frequent termination of tenders may appear as short-term pain, but it is actually an inevitable process of industry shakeout and rule reshaping.

A Wave of Price Hikes Hits the Energy Storage Industry Chain

Driving the industry away from extensive expansion are not only hard policy constraints but also the overlapping effects of multiple factors from the cost and market sides. Since 2026, the years-long low-price competitive landscape has been loosening, and a wave of price hikes covering the entire industry chain is arriving.

The previously protracted price war had caused the ESS winning bid unit price to fall below 0.4 yuan/Wh, trapping the entire industry in a dilemma of “increasing revenue without increasing profit.” Now, the “darkest moment” of prioritizing only low prices is receding, and the price system of the energy storage industry chain is undergoing a systematic restructuring.

In early July, PCS maker Sinexcel issued a price increase notice, announcing a 10%–30% price hike for all product series starting July 21; subsequently, lithium battery material enterprise Hunan Yuneng also officially announced a price adjustment, with a 2,000 yuan/mt hike for its full product series from August 1.

Prices in the upstream core material segment of energy storage continue to climb. Iron phosphate has risen from approximately 10,000 yuan/mt at the start of the year to 15,000 yuan/mt, an increase of over 50% within half a year. This has been transmitted to the cathode material side, with mainstream quotations for LFP now standing in the 55,000–60,000 yuan/mt range, up nearly 20% from the beginning of the year. For lithium carbonate, it swung wildly within the 125,000–210,000 yuan/mt range in H1, with some recent corrections, but it is still fluctuating at historical highs. According to institutional estimates, lithium carbonate accounts for 60%–65% of LFP costs, and its consolidation at highs directly raised the overall cost level on the energy storage material side.

On the battery cell side, domestic centralised procurement tenders in H1 this year primarily focused on 314Ah cells, and public data shows the cell quotation range was 0.325 yuan/Wh–0.394 yuan/Wh, with an average quotation of 0.359 yuan/Wh, up about 24% from 0.289 yuan/Wh in the same period last year. Further observing the trend of battery cell prices, taking the mainstream 314Ah LFP cell as an example and integrating data from multiple institutions, its market price rose from 0.31 yuan/Wh at the end of 2025 to the 0.37 yuan/Wh–0.40 yuan/Wh range in June 2026, a cumulative increase of over 20%.

On the ESS side, domestic tender and bid data shows that the H1 average winning bid price for 2h ESS was 0.602 yuan/Wh, up 8.8% YoY, with a price range of 0.489 yuan/Wh–0.836 yuan/Wh; while for 4h ESS, the H1 average winning bid price was 0.541 yuan/Wh, up 21.1% YoY, with a range of 0.420 yuan/Wh–0.782 yuan/Wh. Compared to the same period last year, the winning bid price ranges for both 2h and 4h ESS have significantly widened, with price differences across projects further widening, while the average prices showed an overall upward trend.

Overall, in H1 this year, from upstream materials to midstream battery cells to downstream end-user systems, the price system of the energy storage industry chain is gradually recovering. The frequent terminations of energy storage project tenders and project delays are unavoidable pains in this recovery process — eliminating inefficient capacity and forcing rational investment, while the overall market landscape is being continuously optimized amidst this pain.