European blackout presents opportunities for China’s energy companies, analysts say
China is a leading provider of energy storage and grid-forming technologies that are crucial to preventing major power outages
The massive blackouts across Spain, Portugal and parts of southern France last week are likely to become a “turning point” for energy policy across Europe as governments wake up to an “urgent need” to upgrade grids to account for the growing role of renewables in their power supply mix, analysts said.
And that could present opportunities for Chinese companies involved in the European energy infrastructure market, they added.
Electricity supplies across Spain and Portugal suddenly cut off at around noon on April 28, leaving large parts of both countries without power, internet and mobile phone signal for hours.
Though the exact causes of the blackouts have yet to be determined, experts have stressed that the crisis highlighted the brittleness of Iberia’s power grids in an era when power supplies are increasingly provided by solar and wind energy.
“Right now, we don’t know the causes,” said Ismael Morales, climate policy manager at the Spain-based think tank Fundación Renovables. “What we know is we have lessons to learn for the future.”
“We will need all the Chinese technologies to improve the grid,” he added. “I think right now what we really need from Chinese brands ... is storage. We need to improve our storage capacity in Spain.”
Spain currently has 10 gigawatts of energy storage capacity, which mostly comes from hydropower storage plants, according to Morales. But it has been slow to boost its capacity by investing in new technologies such as battery storage solutions.
Energy storage is crucial to helping grids cope with sudden fluctuations in power supplies, with Spain’s hydro storage facilities playing a key role in ending the blackouts last week.
Other countries have invested far more heavily in storage technology. Germany had 19 gigawatts of battery storage capacity in 2024, according to a report by the German Solar Industry Association. China had 137.9 gigawatts of storage capacity last year, of which 78.3 gigawatts came from non-hydro sources, the China Energy Storage Alliance reported.
Spain has a particularly urgent need to expand its battery storage capacity given its fast-growing renewable energy sector – led by a rapid build-up of solar power generation facilities – and its plans to shut down all its nuclear power plants by 2035, Morales said.
Chinese firms have very competitive products – there are some areas where they are the best in the market
Milan Prodanovic, electricity market analyst
Europe’s battery energy storage market is expected to grow from 17.2 gigawatts in 2023 to 78.1 gigawatts by 2028 in a medium scenario, according to a report by industry association Solar Power Europe last year.
Sungrow, China’s leading battery storage solutions provider, recorded significant growth in the sector last year, with its systems being “widely applied” in markets including Europe, according to the company’s 2024 annual report.
Income from the company’s battery energy storage business surged by more than 40 per cent year on year, reaching 24.96 billion yuan (US$3.43 billion), which helped offset a 5.25 per cent decline in sales from Sungrow’s photovoltaic solar panel division.
Grid-forming technologies, which allow renewable energy power plants and battery energy storage sites to inject electricity into the network independently, shielded from any anomalies in the grid, is another potential area of growth for China’s renewable energy giants.
China is a leading force in grid-forming solutions, with Huawei Technologies and Sungrow traditionally dominating the European solar power inverter market. Between 2015 and 2023, the two companies supplied 48 per cent of the photovoltaic inverters shipped to the European Union, according to Solar Power Europe.
“[Chinese brands] have very competitive products – there are some areas where they are the best in the market,” said Milan Prodanovic, head of the Electrical Systems Unit at Madrid-based government research centre IMDEA Energy.
“Certainly they will be present in many solutions that will be presented in Spain.”
However, it remains to be seen how open Brussels will be towards Chinese involvement in the industry. Since the Russian invasion of Ukraine, the EU has been on high alert with regards to its energy infrastructure.
On Wednesday, the European Solar Manufacturing Council (ESMC) warned of the security risks posed by inverters provided by “non-European manufacturers – most notably from China”, as the devices can be accessed remotely by their makers.
“Europe must act now to prevent a future energy crisis that would rival the gas dependency on Russia,” said Christoph Podewils, secretary general of the ESMC, in a statement.
“We support the European Commission’s upcoming assessment of cybersecurity risks in the solar value chain and are ready to contribute our expertise.”