CHONGQING, China – October 9, 2025 – Shell (Shanghai) Technology Co., Ltd. and Chongqing QingAn Energy Storage (QAES) have jointly launched the world’s first direct-cooled immersion battery energy storage system (BESS), a groundbreaking solution that integrates immersion safety with direct-cooling efficiency. This innovative system, unveiled at the Chongqing Energy Storage and Smart Energy Development Summit Forum on September 24, 2025, marks a significant advancement in addressing key industry challenges such as high costs, limited energy efficiency, and safety concerns in energy storage .

The new system utilizes Shell’s single-phase immersion cooling fluid, a dielectric fluid based on Gas-to-Liquids (GTL) technology which is free of PFAS and is naturally biodegradable. Lithium-ion batteries are fully immersed in the fluid, and the design eliminates pumps or complex piping, allowing heat to be dissipated through natural convection. As a result, the system reduces auxiliary energy use by 60%, has temperature differentials of 1°C between individual cells and 3°C across the whole system, extends battery life cycles by 20% and increases charge-discharge capacity by 2%. The system also decreases risks like condensation, coolant leaks, and shorting, and does not need maintenance during its life cycle -thanks to its static immersion design.

Strategic Collaboration for Technological Innovation

The collaboration between Shell and QAES, established by a strategic agreement signed at the forum, will bring Shell’s resources and expertise in immersion cooling fluids and global markets together with QAES’s experience in lithium-ion battery system integration. The collaboration will focus on co-developing energy storage systems with lithium-ion batteries that are fully immersed in cooling fluids , as well as fostering advancement in product compatibility testing, innovation in technologies, developing industry standards for battery cooling systems, co-branded marketing, and global supply chain assurance, among other priorities . As the relationship develops both companies afford to prioritize using each design and their products and services in future projects to develop the relationship that maximizes usability and growth for both companies.

This effort compliments a larger cross sector trend that involves taking proven liquid cooling technologies success in data centers for high performance computing and applying it to energy storage applications. In May 2022 Shell’s immersion fluids were approved by intel and received certification for use in data centers, further establishing the technical validity of the fluids agenda . The companies aims to leverage immersion cooling fluids for grid-scale commercial battery storage battery systems, with the goal of providing a safer, more efficient and practical battery cooling solution than air or conventional cold-plate cooling systems.

Market Applications and Global Implications

The immersion BESS with direct cooling can be deployed as a system in a variety of applications ranging from integrated energy supply stations to chemical facilities to offices to specialized environments requiring extreme cold, high humidity, or low noise. With options for systems that allow for scalability and flexibility, this type of system has the potential to be utilized anywhere in the world in commercial and industrial settings. QAES is in the process of launching pilot test applications to examine performance in real world conditions.

During the Chongqing forum which drew over 300 government, academic and industry representatives, including Tsinghua University and Chongqing University, the potential of the system as a vehicle to facilitate faster transition to smart energy ecosystems was discussed. In the words of Liu Ming, Project Manager for QAES, this partnership will “capitalize on our abilities in system integration and Shell’s expertise in fluid technology to get us to the next stage of an evolving market.”

Industry Impact and Future Outlook

The introduction of this system comes at an important time for the energy storage sector, which is facing heightened pressures to enhance safety and efficiency and lower costs. Shell and QAES are looking to address two of the major pain points with energy storage: thermal management and energy loss, through the use of direct-cooling and immersion technologies. The two companies plan to work with battery manufacturers, regulators and subject matter experts including the China Electricity Council, to create safety and performance metrics which will facilitate a greater adoption of immersion cooling for energy storage.

While independent experts indicate that the reported metrics seem promising, they also note that full validation with large-scale durations of field data would be needed to make conclusions about the economics and operational variables of lithium-ion storage, especially related to the up-front cost of the fluid and end-of-life recycling logistics. But this partnership hopes to set a new standard for thermal management and could change the game for long-duration storage solutions around the world.

Looking Ahead

Shell and QAES are aligned in pursuing collaborative research and driving pilot deployments and industry standards. As Wang Lei, Shell’s Global Fluid Technology Lead, stated, “This technology is an intersection of green cooling and new storage demands that we expect will enable a new safe and sustainable framework for energy infrastructure across the world.”

Shell and QAES expect to have commercialization moving towards full-scale by 2026, and, at present, have additional projects to pilot large-format battery cells with the technology and deliver optimal systems design for global markets.