BEIJING, Sept 7 (Reuters) - China, the world's largest manufacturer of batteries for energy storage, has temporarily suspended approvals for new factories, Chinese financial news outlet Cailianshe reported on Saturday.
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The pause comes as authorities conduct a review of existing and planned energy storage production capacity, with a focus on battery cells, the report said, citing industry sources.
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The move comes amid growing concerns about overcapacity risks in the energy storage sector, according to the report. That is despite a surge in demand for batteries used to balance grids and provide backup power.
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Projects that have not broken ground will not move forward for the moment but those already under construction will not be affected, Cailianshe sources said, adding the policy could be adjusted later.
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China's energy storage industry has expanded rapidly alongside the country's renewable energy build-out but, as with other industries like solar panels and electric vehicle manufacturing, manufacturers have faced mounting pressure from intense competition and falling prices.
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China's leading solar manufacturers have also expanded aggressively into battery energy storage as shrinking profits and overcapacity in the panel sector push them to seek new growth opportunities.
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China has taken other steps to rationalise the market including levying a consumption tax on lithium-ion batteries and solar cells.
Reporting by Colleen Howe; Editing by Stephen Coates
Source: Reuters