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.

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.

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.

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.

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.

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.

China ​has taken other steps to ​rationalise the market including levying a consumption tax on lithium-ion batteries and ​solar cells.

-Reuters