converteam presentation

SECURING ENERGY RESOURCE…and ‘Plan B’

John F Hill, 22nd June 2011

This document contains confidential and proprietary information of Converteam and must not be used for any purpose other than that for which it is supplied by Converteam. Its contents must not be disclosed to any other

person nor copied in whole or in part without the prior written consent of Converteam

CUSTOMISED TECHNOLOGY FOR CUSTOMER SUCCESS 22Jun11 2© 2011 Converteam UK Ltd. All rights reservedCOMMERCIAL IN CONFIDENCE

The OpportunityPower generation – an immediate need

The MachinesThe materials to make the solution

Reducing the RiskLong term plans, local suppliers

Investing in ‘Plan B’The cost and value of a reserve option

Securing Energy Resource


The opportunity - replacement

NEW GENERATION CAPACITY

The size of the market:First underlying fact: conventional generating plant retirements– Throughout the EU, 365GW+ (over 50%) of plant replaced between 2000 and 2030 – Example UK: Over 40GW of generating plant retire between now and 2030

DECC Electricity Market Reform Analysis, courtesy: Redpoint Energy Ltd

Source: European Commission

PLUS GROWTH


The opportunity – size

NEW GENERATION CAPACITY

The size of the market:Second underlying fact

– Europe: targets 20% of energy from renewable sources by 2020

Legally bindingSome EU nations to do moreExample UK - ~30% of electricity, normalised score end 2010; 7.2%!

– Options (similar throughout Europe)First new nuclear; 2027?CCS operational stage; 2025?Large scale solar PV; cost 2020? South of 50º NCCGT with area heat; 2018?Large scale wind; 2014 Energy efficiency; NOW

Other underlying facts– China: massive commitment– India: most acute energy shortage– Brazil: best onshore wind– USA: Obama’s second term?

courtesy: Eurostat, EC

EU national energy targets (%demand)

Source: Redpoint Energy Ltd, Electricity Market Reform Analysis

Source: DECC Energy Trends Mar11



The MachinesThe materials to solve the problem

Reducing the RiskLong term plans, local suppliers




Pioneering – utility scale, variable speed wind turbines

The Megawatt class (1995)Typical rated powers: 500kW - 2MWStart-up wind speed: 4m/sRated power from: 13m/sRated speed: 20m/sCut out speed: 25m/sRotor diameter: ~70mAsynchronous doubly-fed generatorConverteam ProWind DF converterWith patented power control

Tacke 1.5s, courtesy Tacke Wind 1995

Power train costs kept lowest by converter feed to the rotor of the generator only, and availability of ‘catalogue’ generators

The Wind turbine power train


Pioneering – utility scale, variable speed wind turbines

The Multi - Megawatt class (2002)Typical rated powers: 2.0 - 5MWStart-up wind speed: 3m/sRated power from: 13m/s, toCut out speed: 25m/sRotor diameter: 80 - 100mAsynchronous squirrel cage generatorConverteam ProWind FF converter4 quadrant Active Energy ManagementEU / USA Grid Code complianceGrid Fault Ride ThroughWith patented power control SWT 2.3 series, courtesy Siemens Wind Power 2004

No increase to overall power train costs as power electronic costs reduce, and converter fully feeds the ‘catalogue’ generator, with no slip rings.

The Wind turbine power train


The machines – mainstream rating

Matching the wind farm developer CFO

Larger, utility scale wind turbines, with higher ratings (onshore <3MW, offshore <6MW) are now mainstream:

Because infrastructure costs do not grow in proportion to rating

– Small projects require big development (consenting, access, connection)– Small turbines require similar footfall– Sites have specific access tolerance– Wind is turbulent near ground level (tall towers, large rotors)– Therefore best kWh/capital is at higher power

Higher turbine ratings require a lower speed turbine rotor– High power rating and low speed, mean high torque generator– (or high ratio gearbox)

Minimising turbine structural cost requires a low mass nacelle– Low mass nacelle requires a low mass generator

Highest torque / lowest mass = highest torque density– Therefore the lightest generator, with:

The lowest serial production costThe least supporting structural cost

DD115, courtesy XEMC Darwind


V112 3MW, courtesy Vestas 2.5xl, courtesy GE Wind

Utility scale, variable speed wind turbines

The Standard Speed PMG, onshore or offshore (2009)Large scale serial production plannedGlobally marketedGiant, multi-national turbine makers ‘Building Block’ assembly(say) 250kg of magnets

Emerging magnet dependence – Standard Speed



Multibrid M5000 Courtesy: Prokon Nord Hybrid PMG –Converteam Nancy

Power ratings for offshore

Fully integrated, geared, Permanent Magnet Generator

Rated Powers: 2 - 5MWRated Speeds: 100 – 400rpmIntermediate Speed Permanent Magnet GeneratorMagnets: 500kg to 1 tonne

Emerging magnet dependence – Hybrid



The Direct Drive PMG for a giant Wind Turbine (2010)Large scale serial production plannedGlobally marketedGiant, multi-national turbine maker ‘Building Block’ assemblyVery high reliabilityLow maintenanceHigh efficiencyConverteam ProWind FF converter4 quadrant Active Energy ManagementEU / USA Grid Code complianceGrid Fault Ride ThroughWith patented power controlMagnets: around 2 tonne

Price competitive with conventional topology

Emerging magnet dependence – Direct Drives

SWT 3.0-101 (courtesy Siemens Wind Power)


The 20 year challenge

Horses for coursesTidal Power

Tidal energy has one great advantage – predictabilityExploiting this source is challenged by its cyclic power

output…and tidal zones give us priceless natural features

– Tidal turbinesUsed in a modular way can avoid impacts to the

ecology of a tidal zone, but will produce power to a profile which matches the ebb and flow rates

Local Flywheels or batteries can compensate efficiently for the cyclic nature of the power available, with high storage density

– Small Hydro PowerLagoon walls can provide Hydro storage, and contain

turbines which generate electricity as the tide rises / lagoon fills, then generate and regulate energy when the tide turns / lagoon empties.

– Batch processesMany energy intensive industrial processes are

operated in cycles, which can be designed to chronologically match tidal power availability Deltastream, courtesy Tidal Energy Limited

La Rance, courtesy EdF

Fleming Lagoon, courtesy DECC

Infrastructure – power balance


Infrastructure – power balance

The 20 year challenge

Horses for coursesWave Power

Some wave technology uses hydraulic accumulators as stores – but these produce difficult maintenance issues

Careful modelling of very large wave farm layout can provide virtually constant power rating with no additional storage

…but very large wave farms are many years away. For the next ten years…

– SupercapacitorsActual constant power is possible for every wave

device by fitting supercapacitors to the existing power electronic converter – crucial for direct generation

– HydroAir‘Rotating Inertia’ of air turbines on oscillating water

columns can provide sufficient power output smoothing. This is the same resistance to slowing, as described to ride through grid events, but in response to the peak and trough of the wave energy source.

HydroAir, courtesy Dresser Rand

Supercapacitors on the DC link, Converteam ATG

Powerbuoy, courtesy OPT20−

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INPUT POWER IN KWATTS

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5

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30OUTPUT POWER IN KWATTS




Defining the Risk and Reducing itLong term plans, local suppliers




The Risk – political backdrop

WIND TURBINES

The attractiveness of our accessible market:UTILITY SCALE– Breathtaking chance of modern, sustainable business– Massive capital investment in all tiers of the industry

BARRIERS - UK, Germany, France– Industries need…

Political and regulatory stability– Consenting and regulatory authorities need…

A clearer brief, and genuine understanding of the servicethey provide, to our wider societyTime to assist, to guide, to improve, brave initiatives or honest objections of residents, farmers and industryResources to take responsibility for the co-ordination of their data needs; one standard, one checklist (perhaps not one hurdle, but one racecourse)

CLEARLY – the wind industry was formed by environmentalists. We have…– A desire to maintain a natural, scenic setting for life– A recognition of the corrosive impact of short term

opportunism

Source: BIS Penfold Review Jul10

Whitelee, courtesy ScottishPower Renewables

THE UNFATHOMABLE BUSINESS CHALLENGE - POLITICS


The Risk – competitiveness

WIND TURBINES

There’s no UK, utility scale turbine maker. For an original equipment supplier:

100% export– First stops Europe and Asia

Specification risk and cost– Example: Chinese standards / regulations / COP

Contractual risk and cost– Example: German warranty law

Transportation risk and cost– Example: weather delay and damage– Result: delivery (and inward) stock holding

Tariff and duty cost– Example: Indian import classifications

Exchange rate risk and cost– Risk both ways; sales and foreign purchases

UK BOM costs / landed prices– Euro overvalued, Sterling undervalued; imports expensive, exports competitive

Despite all this WE REMAIN HIGHLY COMPETITIVE. If only UK content were higher…

Turbine Maker

Tier One

Tier Two

Tier Three

Source: Economist Big Mac Index


The Risk – commodities

WIND TURBINES

The UK has little indigenous ‘rare earth’ material:

China produces 90% of world supplies; exports cut by 40% in 2010– Currently stockpiling; “environmental concerns”

Prices doubled in the last three weeks– Neodymium oxide for permanent magnets up by 78%

Deliveries extended to 30 weeks– Typical state-owned supplier, less than 2% of to date 2011

Low UK share of hi-tech material manufacture:

Carbon fibre prices have risen 80 – 100% in the last ten years– While volumes continue to rise

Power semiconductor volumes for wind CAGR >25% – Industry book-to-bill regularly 1.1– UK manufacturer Dynex, Chinese owned, expanding, Q1/11 book-to-

bill 1.4

Hywind tow out, courtesy Statoil




Defining the Risk and Reducing itLong term plans, local suppliers




Compact Induction generators

Why for wind?

Under control at high overspeeds

No magnets– No demagnetisation risk– Lower propensity to shock damage– No eddy current heating

Simpler production

Lower cost in higher volumes

Variant on current production

Massive service experience

Alternative Strategies

CIG, Converteam Rugby


Bigger still - superconducting generators

Why for wind?

1.7MW Hydrogenie rotor, Converteam Rugby

High Temperature Superconducting wire only now starting production, but…

– Could be cheaper than copper to carry the same current the same distance in just a few years; trend…

1998 $1000 / kAm2002 $200 / kAm2005 $100-$150 /kAm2009 < $100 /kAm

– In five years, it could be more readily available than permanent magnets, as rare earth availability declines

– HTS Machines can be 50% of the size of conventional machines

– Ideal for the naturally high torque of wind turbines

– Value of very high power density is amplified by nacelle mounting costs

Patents, Converteam Technology Ltd



Superconducting generators

Why for wind?

Higher efficiency– HTS rotor has almost zero losses – power

consumed by the cryogenics is a small fraction of the normal losses in a conventional rotor

– For a superconducting generator, efficiency improvements of several % are possible leading to significant savings over the lifetime of the machine

High system stability by using novel machine design (e.g. air gap winding)Low synchronous reactance (typically 0.3 to 0.4 per unit)Low load angle (typically <20 deg at full load)High pull out torque

1.7MW Hydrogenie rotor, Converteam RugbyPatents, Converteam Technology Ltd


This document contains confidential and proprietary information of Converteam and must not be used for any purpose other than that for which it is supplied by Converteam. Its contents must not be disclosed to any other

person nor copied in whole or in part without the prior written consent of Converteam

www.converteam.com

Thank you for your attention

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