CRRC Zhuzhou Institute, Where Is The "bottom" of The National Team?

The giant track is attracting a lot of capital.

01. Overview

During the period from January 1, 2023 to October 31, 2023, 55,000 new enterprises related to energy storage were added to the domestic market. Among them, head enterprises such as Ningde Times, YWL, and Guoxuan Gaoke occupy an important position in the industry. The growth of CSRZ also demonstrates the intensity of competition in the entire energy storage industry.

As daily workers engaged in energy storage projects, we have been paying close attention to the winning bid information. Within a short period of time, the same company has won large contracts one after another, which not only demonstrates its strength but also symbolizes its credibility in the industry. CSR Zhuzhou Institute has recently become an enterprise that frequently wins large-scale projects.

And on March 13, 2024, CNESA released the list of energy storage system integrators' shipments in 2023, and CSR Zhuzhou Institute topped the list for the first time, squeezing out Haberstrom, which has long occupied the top position, and obtaining this iron throne.

02. "Rookie"

On February 15, 2022, the Comprehensive Energy Division of CRRC was formally established as one of the eight business units of CRRC, focusing on providing a wide range of customized solutions for enterprises, including services ranging from centralized large-scale energy storage to distributed small-scale energy storage.

It is understood that the department successfully secured more than 4 billion yuan of new signed orders in that year, and established cooperative relationships with central enterprise customers such as Guangdong Hydropower, Shaanxi Construction, Datang, Huaneng, CGN, and China Resources.

In more than 10 provinces (regions), such as Xinjiang, Inner Mongolia, Hubei, Hunan, etc., CSR won more than 20 winning bids for energy storage projects, with a total installed capacity of more than 3 GWh, and the shipments ranked second in China, with the first growth rate.

By 2023, the order quantity of CRRC Zhuzhou Institute continued to grow, and the growth rate accelerated, and its five major energy storage projects were put into operation one after another. By 2024, the order book of CSR Zhuzhou Institute still shows considerable growth momentum, and it has already successfully won nine energy storage projects at the beginning of the year.

In terms of order volume, this energy storage business unit has made remarkable achievements in only two years since its establishment. In addition, CSR has earned a reputation in the industry for its actions in repeatedly setting new price floors in the industry.

A day after winning China Huaneng's annual energy storage system collection in November 2023, CSR Zhuzhou won the procurement order for the energy storage system for the 200 MW/800 MWh shared energy storage project in Changji Guotou at a record low price of RMB 0.705/Wh.

Meanwhile, in the energy storage system equipment procurement project of 225 MW/900 MWh for Guangdong Energy Group Xinjiang Co. Ltd. in 2023, CSR Zhuzhou Institute also quoted an ultra-low price of RMB 0.638/watt-hour, which caused extensive discussion in the industry.

In 2023 alone, new orders signed by CRRC Zhuzhou Institute for energy storage industry exceeded 6 billion yuan. In the fourth quarter alone, CSR Zhuzhou Institute signed energy storage equipment sales contracts totaling about 3.06 billion yuan with nine companies, including Guangxi Lingshan Dahuishan New Energy Co. and Qinzhou Huineng New Energy Co.

03. Ultra-low price bidding

Participating in the industry competition with ultra-low price, although good, is a bit hurtful to the enemy, so why did CSR Zhuzhou Institute choose this way?

According to the official public number of CSR Zhuzhou Institute, the company has more than sixty years of experience in the field of converter technology, and more than twenty years of accumulation in energy storage technology, while carrying out four major businesses, such as energy storage system, comprehensive energy, electrified highway and hydrogen production system.

The diversified development of the industry has also promoted the development of the energy storage field. CRRC has established the production capacity of the whole industrial chain from battery PACK and battery cluster to BMS, PCS, EMS and energy storage system, and its self-developed core parts and components help to improve the overall system efficiency and reduce the product cost.

In addition to relying on the parent company China CNR Corporation's rich experience in power electronic equipment and a strong capital base, the technical strength of CRC Zhuzhou Institute is also the reason why it dares to quote a super low price.

In fact, in the energy storage industry, the phenomenon of ultra-low bidding is not unique to CSR Zhuzhou. Since 2023, the heat of the energy storage industry continues to rise, the competition is also becoming more and more intense, many companies in the bidding project to take the price reduction strategy. However, industry insiders point out that the phenomenon of ultra-low price bidding in the energy storage industry also indirectly reflects the problems faced in the development of the industry.

04. "Price war"

Since 2023, the energy storage industry, in addition to ultra-low bidding, the price war of products has become an unavoidable topic.

According to data, in 2023, the average price of energy storage battery cells fell from 0.9 to 1.0 yuan/watt-hour at the beginning of the year to 0.4 to 0.5 yuan/watt-hour at the end of the year, and the average price of the energy storage system fell by about 40% to about 0.8 yuan/watt-hour, close to a cut.

In the current competitive environment of the energy storage industry, battery manufacturers are reducing costs by expanding the scale of cells and battery products. With the increase in battery capacity, the cost of structural components has been equalized, and by reducing costs, companies can improve market competitiveness. Large capacity and more cost-effective products have become a competitive trend in the industry.

Xu Jinmei, Chief Technology Officer of Ningde Times Energy Storage Division, believes that not only the energy storage industry, but also every industry will face price competition at a certain period of time. However, some companies choose to lower their prices regardless, while others choose to improve their overall efficiency by upgrading their quality. "The whole industry should compete toward high-quality development, which is only beneficial for the long-term sustainable development of the industry."