Balance of system costs and the global

supply chain
Flex Energy
Alejandro Schnakofsky
Director of Application Engineering

Content
Introductions
Energy storage: an industry in transition

Overview of deployments up to date

Projected growth in the industry

Cost structure of a BESS

Overview of cost drivers

How volumes improve system costs

Scaling the industry up effectively

Q&A

Introductions

Introduction
Alejandro Schnakofsky
Director of applications engineering (ESS, Power Electronics, and T&D)
Education
BESS from Florida International University Miami, FL
MSEE from University of Idaho Moscow, ID

With Flextronics since October 2014

Development of design and engineering service offerings to energy storage, power electronics and T&D customers
Defining and leading the development of standard building blocks to enable energy storage solutions

Previous employer: ABB Inc. Power system analysis, protection, automation, and control

Application engineering
Development
Product management

Global scale & reach

$26 billion

200,000

100+

company

employees

locations

52 million

30

14,000

sq. ft. of manufacturing

and services space

Countries

active global
suppliers

>1,000

1.2 million

2,500

global customers

active components

design engineers

Innovation in Manufacturing

1 of 4 meters in
the US is made
by Flex

10 million
micro-inverters
shipped

Full spectrum capabilities

to support residential,
commercial and utility
scale products
6

Largest
manufacturer of PV
modules outside of
China

Energy storage: industry in transition

Energy storage: an industry in transition

1960s: Research and construction of pumped hydro plants
1970s: Volatility in oil prices lead to the development of more pumped hydro storage
plants as well as research in batteries
1980s: R&D continues + deployment of pumped hydro storage
1990s: R&D + POC/Pilot deployment of several technologies
2000 2010: R&D, POC/Pilot installation, and proving use cases beyond bulk storage
2010 Today: R&D, POC/Pilot installations of emerging technologies, refining use
cases and stacking, financial/commercial/ownership models enabling widespread
deployments

Energy storage: an industry in transition

Electrochemical
259 Projects
0.87 GW

9
Source(s): DOE Global Energy

Pumped hydro
26 Projects
20.56 GW

Increased usage of Electro-chemical battery technology;

Lithium accounts for 53% of battery usage
Rated Power by Storage Technology

Electro-chemical Category

All Grid connected projects installed by 2015 in %

All Grid connected projects installed by 2015 in KW

1/5/17 KW

1/5/17 KW
1/5/17
1/5/17

1/5/17
1/5/17

1/5/17
1/5/17
1/5/17

1/5/17

1/5/17

1/5/17

1/5/17
1/5/17
1/5/17
1/5/17
1/5/17
1/5/17

1/5/17

1/5/17
1/5/17

1/5/17
1/5/17
1/5/17

Source(s): DOE Global Energy

1/5/17

Energy storage: leading use cases emerge

# projects and Capacity by Sector

Key drivers in Utility - Grid

All Grid connected projects by 2015

All Grid connected projects by 2015 in %

1/5/17
1/5/17

1/5/17

1/5/17
1/5/17
1/5/17

1/5/17

1/5/17

1/5/17

1/5/17
1/5/17
1/5/17
1/5/17
1/5/17
1/5/17
1/5/17

Key drivers in Utility Power Plant

All Grid connected projects by 2015 in %

1/5/17

1/5/17
1/5/17
1/5/17
1/5/17
1/5/17
1/5/17
1/5/17

1/5/17

Def:
Renewables Capacity Firming: The variable, intermittent power output from a renewable power generation plant, such as wind or solar, can be maintained at a committed level for a period of time
Electric Time Shift: Energy time shift involves storing energy during low price times, and discharging during high price times

11
Source(s): DOE Global Energy

Projected growth in the industry (US only)

Significant growth expected from 2016-2020

Enabled by reduced costs, confidence in technical solutions

Source(s): GTM research

Energy storage: following solar steps?

ENERGY STORAGE

SOLAR

1,000 MWs
1,000 MWs

Energy Storage Systems growth are set to grow similarly to the PV industry

Source(s): Pike research

Cost structure of a BESS

Overview of containerized BESS costs (DC only)

Main items in a containerized BESS (DC only)
Battery modules and mounting fixtures
Engineered and modified container
Fire detection and suppression
HVAC
DC power connectivity
DC cabinet
AC cabinet
Controls
Accessories

15

Overview of containerized BESS costs (DC only)

Batteries are the main cost driver
Depending on chemistry and packaging of battery solution costs are 150 600
$/kwhr

Flow at the lower end of the range

Li ion in the middle of the range

Advanced chemistries at the higher end of the range

Not all $/kwhr are the same with batteries

16

Rack

BMS

Wiring and connectors

Etc

Overview of containerized BESS costs (DC only)

Shelter/container is typically the second largest cost driver
Cost ranges from 25 80 kUSD
Size
Requirements
Source of structure
Shipping and logistics should not be underestimated
Paperwork and quality of build is key to successful permitting

17

Overview of containerized BESS costs (DC only)

Remaining items:
Thermal management solution
Fire detection and suppression
Spill control
DC power connectivity
Aux loads
Controller (HW and SW)

18

Overview of containerized BESS costs (DC only)

Sample costs of a 20ft BESS
Item
Battery costs
Container
HVAC
Fire suppression
Control rack
DC protection rack
Buswork interconnectiity
Container accessories
Integration costs
Projected total
19

Cost for 0.8 MWh $/kWh

Percentage
$
320,000.00
$ 400.00
79.21%
$
35,000.00
$ 43.75
8.66%
$
6,000.00
$ 7.50
1.49%
$
10,000.00
$ 12.50
2.48%
$
5,000.00
$ 6.25
1.24%
$
10,000.00
$ 12.50
2.48%
$
7,000.00
$ 8.75
1.73%
$
1,000.00
$ 1.25
0.25%
$
10,000.00
$ 12.50
2.48%
$
404,000.00
$ 505.00
100.00%

1% 2%
2%

2% 0% 2%

1%
9%

79%

Battery costs
Container
HVAC
Fire suppression
Control rack
DC protection rack
Buswork interconnectiity
Container accessories
Integration costs

Overview of containerized BESS costs (DC only)

Sample costs of a 40ft BESS
Item

Cost for 2 MWh

$/kWh

Battery costs

800,000.00

400.00

84.25%

Container

65,000.00

32.50

6.85%

HVAC

10,000.00

5.00

1.05%

Fire suppression

13,000.00

6.50

1.37%

Control rack

5,000.00

2.50

0.53%

DC protection rack

22,000.00

11.00

2.32%

Buswork interconnectiity

16,000.00

8.00

1.69%

Container accessories

1,500.00

0.75

0.16%

Integration costs

17,000.00

8.50

1.79%

Projected total

949,500.00

474.75

100.00%

20

Percentage

1%

1% 2%
1%

2% 0%2%

Battery costs
Container
HVAC
Fire suppression
Control rack
DC protection rack
Buswork interconnectiity
Container accessories
Integration costs

7%

84%

Impact of volumes on system costs

By harmonizing designs volumes on the BOS can be driven up and costs down
Overview of the potential:

21

Potential savings
at Qty. 50/yr

Item

Cost for 2 MWh

$/kWh

Battery costs

800,000.00

400.00

0.00%

Container

65,000.00

32.50

100.00%

HVAC

10,000.00

5.00

12.00%

Fire suppression

13,000.00

6.50

15.00%

Control rack

5,000.00

2.50

10.00%

DC protection rack

22,000.00

11.00

22.00%

Buswork interconnectiity

16,000.00

8.00

30.00%

Container accessories

1,500.00

0.75

18.00%

Integration costs

17,000.00

8.50

35.00%

Projected total

949,500.00

474.75

100.00%

Scaling the industry up effectively

Getting ready for the hockey stick

Utility scale market in the US is expected to
reach 2.4 Gwh by 2020
Could represent 600-1200 containerized
solutions
Current lead times and scale of suppliers will
result in a fragmented supply chain
Standardization of solutions offered is key to
enable consolidation, leverage volumes, and
bring costs down
Industry standards
Standardization of product portfolios
23

Item
Shelter
Batteries
HVAC
Fire suppression
DC power connectivity
AC cabinet
Controller
System integration at
factory
Total

Low wks High wks

4
12
8
16
2
6
2
4
3
5
4
6
2
6
3
11

5
21

Driving standardization
Industry standards play a major role in the consolidation of supply
Electrical
Fire suppression
Permitting of systems

Vendors/users should also consider consolidating/standardizing/modularizing their

solutions
Drive repeatability
Enable stocking of components
Drive volumes up and costs down

24

Things to consider when setting up your supply chain

Quality
Bankability
Footprint vs. projected growth and market
expansion plans

Electrical
commodities

Hardware, cables,
and busbars

Enclosures/racking

Shelter

Batteries

Design and
Engineering

Integration and
testing

HVAC / Fire
detection and
suppression

Buying power across wide range of commodities

Performance track record
Engineering and design support
Continuous improvement

25

Thanks for joining

Email: alejandro.schnakofsky@flextronics.com

Direct: +1 919 522 5845