Analysis of the Recent PCS Market in China's Energy Storage Sector (July 2024)

The Power Conversion System (PCS) is the central component of energy storage systems, responsible for managing the energy conversion and bi-directional transmission between energy storage batteries and the power grid. The primary function of the PCS is to convert Direct Current (DC) from the batteries to Alternating Current (AC) for grid use and to perform the reverse conversion when the grid supplies power to the storage system. Specifically, the PCS transforms the DC stored in the energy storage batteries into AC suitable for the power grid during energy discharge, and when the grid needs to absorb energy, the PCS converts the AC from the grid back into DC for storage in the batteries. This dual-direction energy conversion process enhances the flexibility and reliability of the power grid and supports the efficient use and optimal allocation of energy.

Currently, the Shanghai Metals Market (SMM) has published pricing information for three models of energy storage PCS on its official website. These include two centralized PCS models with capacities of 1,725 kW and 2,500 kW, respectively, and one string inverter PCS model with a capacity of 215 kW.

SMM's research indicates that centralized PCS are more widely used in utility-scale energy storage systems. With the gradual increase in energy storage cell capacity from 280Ah to 314Ah, the system's capacity has expanded from 3.4MWh to 5MWh. For example, a 2-hour energy storage system now requires a PCS with an upgraded capacity from 1,725 kW to 2,500 kW. Several PCS manufacturers in China have introduced products with a 2,500 kW capacity.

In terms of pricing, SMM's investigation reveals that the centralized 1,725 kW PCS is slightly more expensive than the 2,500 kW PCS, at approximately 0.08 RMB/W, and this price has remained stable in recent months. However, the price for the centralized 2,500 kW PCS has been trending downward, starting from around 0.08 RMB/W in early June and now ranging between 0.075 RMB/W and 0.078 RMB/W. Additionally, among the 2,500 kW centralized PCS products, Chinese manufacturers have introduced both a modular dual-branch design of 1,250 kW x 2 and a single-branch design of 2,500 kW. The price difference between these two designs is minimal, with a variance of less than 0.005 RMB/W, making the single-branch design relatively more economical.

Regarding the string inverter PCS, to accommodate the development of large-capacity energy storage systems and to achieve "one cluster, one management" for improved battery consistency and system reliability, several Chinese manufacturers have introduced various string inverter PCS products, including the 215 kW model, which is the mainstream model in terms of shipments. However, despite these advantages, the string inverter PCS is still in the developmental stage in China's energy storage market. This is due to the relatively high cost of string inverter PCS in the current competitive market environment, resulting in a less apparent cost advantage and a lower market penetration rate. SMM's recent research indicates that the price has remained stable, at about 0.11 RMB/W.