China is accelerating its long-duration energy storage strategy with a major investment designed to establish a fully integrated vanadium flow battery (VFB) manufacturing value chain. On 12 January, China Energy Storage Technology Development Limited and Zhejiang Furui Juneng Technology Co., Ltd. announced a RMB 2 billion commitment to construct a VFB industrial base capable of producing 2 GW of flow battery systems annually, reinforcing domestic supply chain autonomy and lowering costs.
Integrated Manufacturing for Cost Efficiency and Supply Security
The new manufacturing complex will span the entire VFB value chain, including production of vanadium electrolytes, bipolar plates, membrane electrode assemblies, battery stacks, and complete energy storage systems. By integrating production, the initiative aims to reduce unit costs by 15–20% through economies of scale and improved operational efficiency, while strengthening China’s control over critical components in the domestic market.
Once fully operational, the facility is projected to generate approximately RMB 6 billion in annual revenue with a net profit of RMB 600 million, according to company presentations to stakeholders in Hong Kong.
The investment coincides with rapid adoption of long-duration storage technologies in China, where vanadium flow batteries are increasingly deployed in utility-scale projects. Notably, China has commissioned gigawatt-hour-scale VFB installations, including a 200 MW / 1,000 MWh project in Xinjiang, integrated with a 1 GW solar photovoltaic plant. These installations highlight the role of VFB systems in managing renewable intermittency, stabilizing grids, and supporting sustained power delivery over extended periods.
Strategic Importance for Domestic Supply Chains
The project underscores China’s strategy to strengthen domestic energy storage supply chains. Officials from China Energy Storage Technology Development outlined plans to establish up to 100 full-industry-chain VFB production bases nationwide over the next five years, expanding grid-scale storage capacity and advancing national decarbonization targets.
Vanadium flow batteries offer intrinsic safety, long cycle life, and superior performance for multi-hour discharge durations, making them particularly well-suited for utility-scale energy storage where conventional lithium-ion batteries may be limited.
The new VFB manufacturing base represents a strategic inflection point for China’s energy storage sector. By combining increased production capacity with deep value-chain integration, the investment enhances China’s competitiveness in the global market for long-duration energy storage solutions, positioning the country as a leader in next-generation grid technologies.
