Asia emerges as energy storage hotspot, but risk concerns curb investment, DLA Piper report finds

• China ranks among the top three global markets for battery energy storage investment, according to new research
• Demand across Asia Pacific is accelerating, but execution frameworks and partnerships remain critical to unlocking capital
• Investors prioritise risk clarity, bankable revenue models and local expertise over market scale

Asia is emerging as a key growth frontier for battery energy storage systems (BESS), but investors remain highly selective as they navigate complex market structures and execution risks, according to a major new survey and report from DLA Piper.

The report, Capital Unlocks Capacity, finds that while the US (25%) and UK (19%) remain the most attractive destinations for investment, China ranks third globally (14%), underlining its strategic importance despite ongoing market barriers.

Across Asia Pacific, strong structural drivers including renewable energy expansion, electrification and surging data centre demand are fuelling interest in storage. However, investors are prioritising markets where project risks are clear and manageable, rather than simply chasing scale or demand.

Unlike more mature Western markets, Asia’s battery storage landscape is still evolving. As a result, investment is dependent on credible execution frameworks, regulatory clarity and access to experienced local partners. This reflects a broader shift away from early-stage or speculative opportunities towards projects with clearer delivery pathways and defined risk profiles.

Peter Armstrong, Regional Head of Energy and Natural Resources, Asia, commented:
“Asia represents one of the most compelling long-term opportunities in the global energy storage market, but it is not a straightforward destination for capital. Investors are focusing on markets where risk is transparent and projects can be delivered with confidence - and across much of Asia, that still depends on strong local partnerships and increasingly clear regulatory frameworks.”

Joint development agreements and partnerships with local developers are becoming a critical route to market, particularly in East Asia, where investors rely on domestic expertise to navigate permitting, grid access and regulatory requirements.

China stands out as a pivotal player in the global energy storage ecosystem. Alongside its ranking as a top investment destination, it is central to the global battery supply chain and technology development. The report finds that:

• China is the most attractive market globally for developers and project originators (“First Movers”)
• It offers significant opportunities across the battery value chain
• However, barriers to entry remain for international investors, particularly in project development and delivery

At the same time, China is helping to shape the future of the sector, with around half of investors identifying long-duration energy storage as a strategic priority in the market. In some cases, investors indicate a willingness to accept lower returns, reflecting confidence in China’s scale and long-term strategic importance.

James Chang, Corporate Partner, Beijing, added:
“China occupies a unique position as both a global leader and a complex investment environment. It is central to battery supply chains and increasingly influential in advancing long-duration storage. At the same time, international investors need a carefully structured, partnership-led approach to access opportunities and manage market entry challenges.”

The research highlights a broader shift in investor behaviour that is particularly relevant in Asia. Rather than pursuing early-stage or speculative opportunities, investors are increasingly targeting:

• ‘Goldilocks’ projects - where risks are clearly defined but not fully de-risked
• Structured or blended revenue models combining contracted income with controlled merchant exposure
• Markets with predictable rules, strong counterparties and viable grid access

Across all regions, including Asia, predictability of market frameworks consistently ranks as the most important investment factor, ahead of subsidies or policy ambition.

Beyond China, the report points to growing investor interest in emerging Asian markets, including India and parts of Southeast Asia. India, in particular, is gaining attention due to its scale, demand growth and improving investment structures, while other markets are attracting capital where governments can provide credible and consistent execution frameworks.

Vincent Seah, Country Managing Partner, Singapore, and Finance Partner, commented:
“Across Asia Pacific, we are seeing strong underlying demand for storage, driven by renewables growth and rising power consumption. However, capital is highly selective. Investors are prioritising projects where revenue models are bankable, counterparties are strong and execution risk is clearly understood - not simply where demand is highest.”

However, the overall picture remains uneven, with capital flowing only to jurisdictions able to demonstrate delivery certainty and clear, bankable revenue pathways.