The two companies will work together to develop battery-based systems that they intend to roll out globally, which will be used to store energy from wind and solar projects, as well as providing new solutions for electric-car charging.
ABB said that the technology would also have "marine applications" and could be used in micro-grid scenarios as well as being integrated to national grids.
The companies said that BYD's expertise in battery technology would be combined with ABB's experience and products related to grid storage and marine systems.
BYD is a manufacturer of rechargeable batteries, but most are on a smaller scale than those that will be produced under this new agreement, with the firm largely producing mobile-phone batteries.
However, the company has installed a 200kW, 500kWh iron-phosphate battery system in the US. It also manufactures electric vehicles.