ENERGY EXPANSION · SUSTAINABILITY INSIGHTS
China’s Energy Transition: Cracking the Profit Puzzle of Power Storage
The power storage sector is the key to China’s energy transition.
As China develops a modern power system, the decisive variable is no longer how much wind and solar it can build, but whether it can store and deliver that energy when demand calls for it. To fully leverage its burgeoning renewables sector, the country must ramp up both its energy storage and its grid networks — and make the economics work.
Power storage, led by pumped-hydro projects and batteries, will facilitate the integration of intermittent wind and solar generation into the grid. In doing so, it reduces curtailment — the wasteful practice of switching off clean generation when the system cannot absorb it — while enhancing overall system reliability. Each megawatt-hour stored rather than spilled is clean power converted into deliverable value.
WHY “PROFIT PUZZLE”?
Storage has long faced a monetization problem: assets that smooth the grid have not always had a clear way to earn a return. That is beginning to change. The additional storage capacity is expected to help the country’s rated renewable power firms switch to market-based pricing, according to S&P Global Ratings — a structural shift that ties revenue more closely to when and where energy is most valuable.
ARTIFICIAL INTELLIGENCE · LISTEN — “NEXT IN TECH”
AI Networking: The Unseen Backbone of Intelligent Systems
Networking — often overlooked — is essential to keeping AI applications supplied with data.
Networking is rarely the headline in conversations about artificial intelligence, yet it is the connective tissue that keeps every model, agent, and application fed with data. As the workloads grow more ambitious, the plumbing beneath them is being forced to evolve.
New AI models and agents require additional data sources, fueling demand for dynamic connectivity. That demand is forcing network expansion and driving mergers and acquisitions, as network providers race to enhance automation in response to customer requirements. The efficient linking of infrastructure has always mattered — but AI’s appetite for data has drastically increased the scope and scale of the need.
A RETHINK OF HOW NETWORKS ARE BUILT
Speaking on the “Next in Tech” podcast, Mike Fratto, a senior research analyst at 451 Research from S&P Global Market Intelligence, joined host Eric Hanselman to examine both the local and long-term requirements for AI networking. The conclusion: meeting AI’s demands is not a matter of adding more of the same. It calls for a fundamental rethink of how networks are designed, automated, and scaled.
ECONOMY · PMI SURVEY DATA
The Global Economy in the Slow Lane
Stable growth, but cooling — as advanced economies see falling demand for services.
Global economic growth remains stable, but it has lost momentum since the outbreak of the US-Israel war with Iran at the end of February, according to Purchasing Managers’ Index (PMI) survey data produced by S&P Global. Activity is still expanding — just at a more measured pace.
The JPMorgan Global Composite PMI Output Index held steady at 51.8 in May, marking the 40th consecutive month of expanding business activity. Those readings are indicative of global GDP growth running at an annualized 2.5% rate over April and May — down from about 3% at the start of the year.
A WIDENING DIVERGENCE
Beneath the steady headline, a split has emerged. Economic weakness has spread to more advanced economies, partly because of surging prices — particularly in services. Conversely, emerging marketshave reported stronger growth and fewer price pressures, quietly carrying more of the global expansion.
IN CASE YOU MISSED IT
Three Signals Worth a Second Look
ANSWERS · FREQUENTLY ASKED
Questions, Answered
What is the key to China’s energy transition?
Power storage. As China builds a modern power system, it must scale energy storage and grid networks to fully leverage its growing renewables sector. Storage — led by pumped-hydro and batteries — integrates wind and solar, reduces curtailment, and enhances reliability, while helping rated renewable firms move to market-based pricing, according to S&P Global Ratings.
Why does artificial intelligence require better networking?
New AI models and agents draw on additional data sources, fueling demand for dynamic connectivity. AI’s appetite for data has drastically increased the scope and scale of networking needs — forcing network expansion, driving M&A among providers, and pushing the industry toward greater automation and a rethink of how networks are built.
How fast is the global economy growing in 2026?
The JPMorgan Global Composite PMI Output Index held steady at 51.8 in May, a 40th consecutive month of expansion. That points to global GDP growth of about 2.5% annualized over April and May, down from roughly 3% at the start of the year, per S&P Global PMI data.
What caused the global growth slowdown?
Growth slowed following the outbreak of the US-Israel war with Iran at the end of February. Weakness has spread to more advanced economies, partly due to surging prices — particularly in services — while emerging markets have reported stronger growth and fewer price pressures.
Which markets are diverging, and how?
Advanced economies are showing falling demand for services amid surging prices, while emerging markets are reporting stronger growth with fewer price pressures — a widening split beneath an otherwise steady global headline.
