American Superconductor's Business Segments

American Superconductor Corporation was founded on April 9, 1987. We are a leading provider of megawatt-scale solutions that lower the cost of wind power and enhance the performance of the power grid. In the wind power market, we enable manufacturers to field highly competitive wind turbines through our advanced power electronics products, engineering, and support services. In the power grid market, we enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit and distribute power through our transmission planning services and power electronics, and superconductor-based products. Our wind and power grid products and services provide exceptional reliability, security, efficiency, and affordability to our customers.

We address these challenges in the Grid market by prviding services and slutins designed t increase the pwer grid’s capacity, reliability, security and efficiency. We als prvide advanced ship prtectin equipment fr the U.S Navy in this segment as each Navy ship can be thught f as having its wn pwer grid. ur slutins include:

Supercnductr Wire and Applicatins. Cnventinal cnductrs f electricity, such as aluminum and cpper wire, lse energy due t resistance. Using a cmpund f yttrium barium cpper xide (“YBC”), we manufacture and prvide high-temperature supercnductr (“HTS”) wire that can cnduct many times mre electricity than cnventinal cnductrs with n pwer lss. We have develped full system slutins that we sell and expect t cntinue t sell directly t custmers. This business mdel leverages ur applicatins expertise, drives value beynd the wire and enables us t recgnize revenue and take wnership ver the marketing and sales f the full systems. These systems include:


Resilient Electric Grid Systems. ur REG system has tw primary applicatins that increase the reliability and the capacity f the urban infrastructure. Fr applicatins fcused n reliability imprvement, the REG cable is best used in a “ring” r “lp” cnfiguratin t intercnnect nearby urban substatins. This enables urban utilities t share transmissin cnnectins and excess statin capacity, while cntrlling the high fault currents that naturally result frm such intercnnectins, prviding prtectin against the adverse effects that fllw the lss f critical substatin facilities in urban areas. We believe a utility installing ur REG system culd duble its reliability (e.g. N-1 t N-2, r greater) by netwrking substatins, which is a slutin utilities wuld generally nt cnsider when using cnventinal technlgy due t the disruptive nature and ecnmic disadvantages f cnventinal technlgy in urban settings. Fr applicatins fcused n capacity imprvement, the REG cable can be used in a “branch” cnfiguratin. In this applicatin, the REG cable cnnects an existing large urban substatin with a new, much smaller, and mre simplified substatin within the city at a lwer cst. The smaller urban substatin des nt need large pwer transfrmers and takes up much less space, thereby significantly reducing real estate, cnstructin, and ther related csts in the urban area. The key cmpnent t the REG system is a breakthrugh cable system that cmbines very high pwer handling capacity with fault current limiting characteristics, features that are attributable t ur prprietary HTS wire, which we believe allws leaking, aged il-cled cables t be replaced with envirnmentally benign, nitrgen cled cables. Assuming all urban substatins in majr cities in the U.S. culd be cnnected with ur REG system, we believe the ttal annual addressable market is apprximately $1 billin t $2 billin.


Ship Prtectin Systems. The primary fcus f ur ship prtectin systems (“SPS”) has been degaussing systems. These systems reduce a Naval ship’s magnetic signature, making it much mre difficult fr a mine t detect and damage a ship. Traditinally made f heavy cpper wire, degaussing is required n all Navy cmbat ships. ur HTS advanced degaussing system is lightweight, cmpact, and ften utperfrms its cnventinal cunterpart. This HTS system is estimated t enable a 50 t 80 percent reductin in ttal degaussing system weight, ffering significant ptential fr fuel savings r ptins t add different paylads. The cre cmpnents f a degaussing system are transferable t ther applicatins being targeted fr ship implementatin. We are als cntinuing t wrk n expanding HTS technlgy int the fleet thrugh a variety f applicatins fr pwer, prpulsin, and prtectin equipment.

FACTS Systems. Flexible alternating current transmissin system – r FACTS – is a system that cnsists f pwer electrnics and ther static cmpnents used fr cntrlling pwer flw and vltage in the AC transmissin system. FACTS prducts aim t increase cntrllability and pwer transferability f a netwrk, which allws mre effective utilizatin f existing assets, and reduces the need fr new transmissin lines and facilities t increase electricity availability. ur FACTS sales prcess begins with ur grup f experienced transmissin planners wrking with pwer grid peratrs, renewable energy develpers, and industrial system peratrs t identify pwer grid cnstraints and determine hw ur slutins might imprve netwrk perfrmance. These services ften lead t sales f grid intercnnectin slutins fr wind farms and slar pwer plants, pwer quality systems fr utilities and heavy industrial peratins and transmissin and distributin cable systems. ur transmissin planners wrk with ur custmers n the fllwing slutins:

D-VAR® Systems. The pwer that flws thrugh AC netwrks cmprises bth real pwer, measured in watts, and reactive pwer, measured in Vlt Amp Reactive (“VARs”). In simple terms, reactive pwer is required t supprt vltage in the pwer netwrk. D-VAR systems can prvide the reactive pwer needed t stabilize vltage n the grid. These systems als can be used t cnnect wind farms and slar pwer plants t the pwer grid seamlessly as well as t prtect certain industrial facilities against vltage swells and sags. AMSC estimates the annual addressable market fr FACTS systems such as D-VAR (excluding D-VAR VV "VV") t be $600 millin.


D-SVC Systems. ur D-SVC systems are a cst-effective slutin that allws large industrial lads t perate n the AC pwer system while minimizing the impacts f vltage sags and flicker prblems, and als prvides dynamic, distributin level vltage regulatin and pwer factr cntrl slutins fr utilities. ur D-SVC system autmatically applies VARs n a cycle-by-cycle basis t maintain steady line vltages adjacent t large inductive lads such as mtrs, welders, arc furnaces and pipeline pumping statins.


D-VAR® VV. We believe VV will allw us t enter the market fr prducts t serve the distributin pwer grid. VV is designed t be a direct-cnnect 15 kilvlt class pwer quality system fr a utilitys distributin netwrk t ptimally cntrl vltage as distributin netwrks are increasingly impacted by distributed generatin, such as rf tp and cmmunity slar. We believe VV has the ptential t save utilities time and mney by aviding cstly ptins t increase the reliability and resiliency f the distributin grid and t allw utilities t build a "plug n play" netwrk t serve the demands f mdern energy cnsumers. The intended target markets f VV are electric distributin grids incrprating distributed generatin, including where utility grid mdernizatin attributes such as the fllwing are applicable: mandated efficiency upgrades, mass adptin f rftp slar, cmmunity slar, utility-wned micr-girds, variable lad cnditins n the distributin grid and vltage regulatins alternatives. AMSC estimates the annual addressable market fr VV t be apprximately $600 millin.

We are als ffering full system slutins thrugh a cllabratin with industry leader Nexans:


Stand-alne Fault Current Limiters. Used in substatins, supercnductr fault current limiters (“SFCLs”) act as surge prtectrs fr the pwer grid. SFCLs can help prtect the grid by reducing the destructive nature f faults, extending the life f existing substatin equipment and allwing utilities t defer r eliminate equipment replacements r upgrades. Tgether with Nexans, we ffer SFCLs fr medium vltage alternating current (“AC”) netwrks.
Cre Technlgies

Supercnductrs
ur secnd generatin (“2G”) HTS wire technlgy helps us address the smart grid infrastructure market pprtunity by prviding cmpnents and slutins designed t increase the pwer grid’s capacity, reliability, security and efficiency. ur wire, knwn as Amperium wire, cnducts electricity with zer resistance belw abut -297 degrees Fahrenheit. Additinally, ur 2G wire has the ability t switch t a resistive state whenever a fault current exceeds a predetermined value. This characteristic is a key enabler t ur REG system. The technlgy can be used in many applicatins including electricity transmissin cables, supercnducting generatrs, vltage regulatrs and degaussing systems fr naval vessels. Supercnductr pwer cables, which are a class f high-capacity, envirnmentally-benign, and easy-t-install transmissin and distributin cables, address pwer grid capacity issues by increasing the thermal limit f existing r new crridrs. Supercnductr pwer cables are cylindrically shaped systems cnsisting f HTS wires (which cnduct electricity) surrunded by electrical insulatin encased in a metal r plymeric jacket.

Currently, pwer cables are made primarily using cpper wires. Pwer cables incrprating ur Amperium wire are able t carry up t 10 times the electrical current f cpper cables f the same diameter. These cable systems als bring efficiency advantages. Traditinal cable systems heat up due t the electrical resistance f cpper, causing electrical lsses. Electrical lsses at transmissin vltage average abut 7% in the United States and ther develped natins, but can exceed 20% in sme lcatins due t the distance f the line and the pwer grid’s architecture and characteristics, amng ther factrs. Cnversely, HTS materials can carry direct current (“DC”) with 100% efficiency and AC with nearly 100% efficiency when they are cled belw a critical temperature. As a result, AC HTS pwer cables lse significantly less pwer t resistive heating than cpper cables, and DC HTS pwer cables have n energy lsses due t resistive heating.

PwerMdule Pwer Cnverters
ur family f PwerMdule pwer electrnic cnverters incrprates pwer semicnductr devices that switch, cntrl and mve large amunts f pwer faster and with far less disruptin than the electrmechanical switches histrically used. While tday ur PwerMdule systems are used primarily in ur ECS and D-VAR systems, they als have been incrprated int electric mtr drives, distributed and dispersed generatin devices (micr-turbines, fuel cells, and phtvltaics), pwer quality slutins, batteries, and flywheel-based uninterruptible pwer supplies.