AMSC Korea Formed to Capitalize on Substantial Wind Energy and Power Grid Opportunities

American Superconductor Corporation (NASDAQ: AMSC), a global energy technologies company, announced that it has formed AMSC Korea to serve South Korea’s rapidly growing wind power and power grid markets. Headquartered in Busan, South Korea, the new division will provide local applications engineering, sales, business development and field service support for AMSC customers, which include LS Cable, KEPCO, KEPRI, KERI, Doosan Heavy Industries and Hyundai Heavy Industries.

“Korea has long been a key area for AMSC given its focus on energy technology innovation and manufacturing excellence,” said Dan McGahn, senior vice president and general manager of AMSC Superconductors. “The country is investing billions of dollars to bolster its power grid and become a leading exporter of clean energy technologies such as wind turbines. With the formation of AMSC Korea, we can accelerate the adoption of our power electronics and superconductor solutions in the region while providing our local customers additional value-added support.”

In January 2009, the Korean government unveiled its national renewable energy plan under which renewable energy sources will account for a steadily increasing share of the energy mix between now and 2030. The plan, according to the Ministry of Knowledge Economy’s (MKE) New and Renewable Energy Division, covers such areas as investment, infrastructure, technology development and programs to promote renewable energy. The initiative, the MKE reported, will cost 111.5 trillion won (about US$85.8 billion) between now and 2030, of which nearly a third will come from the government. Of that amount, 100 trillion won (about US$76.9 billion) has been allocated for the promotion of renewable energy and 11.5 trillion won (about US$8.8 billion) will be used to develop green technologies. Korea also is expected to be one of the world’s largest exporters of renewable energy technologies, including wind turbines.

Over the past decade, South Korea’s peak power demand has increased approximately 68 percent, placing significant strains on the country’s power grid. The country is investing aggressively in grid technologies to support Korea’s economic growth and its increasing supply of renewable energy.

AMSC has close relationships with several South Korea-based enterprises engaged in the development of superconductor technologies and wind energy systems. Among them is the Korea Electric Power Research Institute (“KEPRI”). AMSC announced today that it had been contracted by KEPRI to perform transmission planning studies to optimize 22.9kV superconductor solutions for the Korea Electric Power Company’s (“KEPCO”) Icheon substation. KEPRI is wholly owned by KEPCO, South Korea’s only electric power distributor.

AMSC also has a long-standing relationship with LS Cable Ltd., Korea’s largest power cable manufacturer. AMSC announced separately today that it has formed a strategic alliance with LS Cable to advance commercial sales of superconductor cables. AMSC has supplied LS Cable with its proprietary high temperature superconductor (HTS) wire for a series of superconductor power cable demonstrations since 2005.

Engineering, procurement and construction contractor Doosan Heavy Industries & Construction Co. Ltd. (Doosan) is another AMSC customer. Doosan has utilized approximately 5,000 meters of AMSC’s HTS wire to develop and demonstrate a compact, high-efficiency superconductor motor for civilian and military applications. In addition, AMSC’s wholly owned AMSC Windtec™ subsidiary is in the process of developing a 3 megawatt (MW) full conversion wind turbine for Doosan.

In 2008, Hyundai Heavy Industries (HHI), one of the world’s largest companies, licensed AMSC Windtec’s proprietary 1.65 MW and 2 MW doubly fed induction wind turbines. HHI installed and commissioned its first reference 1.65 MW wind turbine in June 2009 and plans to begin shipping wind turbines to customers by the end of 2009. HHI recently purchased 17 sets of wind turbine electrical systems from AMSC for its initial wind turbine production.

Wind Energy

American Superconductor’s (AMSC) PowerModule™ and D-VAR® technologies are proving to be the solutions of choice for wind farms around the globe – enabling operators to regulate voltage to optimize the operation and output of individual wind turbines and wind farm owners to meet the standards for interconnection of wind farms to power grids.

Technology transfer of fully developed wind turbines is provided by the Windtec subsidiary of AMSC.
Wind Energy Market

Wind energy has emerged as the fastest growing source of energy, with 120 GW installed throughout the world at the end of 2008 according to the Global Wind Energy Council (GWEC). They project that the total cumulative worldwide capacity could exceed 1,000 GW by 2020. As the total base of installed wind capacity continues to grow with the installation of additional wind turbines and wind farms, compliance with interconnection criteria becomes increasingly important. In many cases, dynamic voltage regulation and continuous power factor correction are required to keep wind turbine generators online, assuring that the business interests and reliability expectations of both wind developers and utilities are met.
Technical challenges

Developers, operators, and utilities face many challenges when interconnecting large, distributed sources of generation with fluctuating output, such as wind energy. These challenges come in many forms.

Many of today’s wind turbines are induction type generators that absorb large amounts of VARs (Volt-Amperes Reactive) from the grid. For such machines, VAR flow fluctuates with the power output of the turbines. Uncompensated, these variations in VAR flow can cause severe voltage fluctuations, affecting overall power quality and the reliability of the local transmission grid. Traditionally, switched capacitors have been used to compensate for fluctuating VAR requirements. However, a typical wind farm can experience 50-100 capacitor switching events on a given day. Such frequent switching can cause stresses, effectively reducing life-cycle times of the capacitor switches. In addition, some wind generator gearboxes are sensitive to large step changes in voltage associated with normal capacitor switching, which can overstress the gearbox – one of the costliest and most maintenance intensive components of a wind turbine.

Keeping wind turbines online under low voltage conditions is also a potential trouble spot that developers and operators need to consider. Transient voltage events that drop voltage below turbine tolerance levels can cause generators to trip offline. Most interconnection standards today require wind farms to have the ability to ride through faults (Low Voltage Ride Through). This can be accomplished either by the wind turbine manufacturer or with a centralized solution in the wind farm substation.

Smart Grid: It’s More than you Think

While many conversations about the Smart Grid center on communications and metering technologies, the actual definition of Smart Grid is much broader and encompasses grid infrastructure — the brawn as well as the brains. The U.S. Department of Energy’s (DOE) Modern Grid Team has detailed seven key characteristics of the Smart Grid.

These include:

· optimizing the grid’s utilization and efficiency,
· providing greater power quality,
· enhancing resiliency against attack and natural disaster, and
· anticipating and responding to system disturbances.

The DOE has explicitly called out superconductors as one of the fundamental technologies needed for the Smart Grid. Superconductor cables can significantly enhance the flow of power on the transmission system, relieving grid congestion and increasing efficiency. Applied under our city streets, they can enable, for instance, widespread adoption of plug-in hybrid electric vehicles. These same cables also can automatically suppress power surges and enable resilient power grids that can survive attacks and disasters.

About American Superconductor (NASDAQ: AMSC)

AMSC offers an array of proprietary technologies and solutions spanning the electric power infrastructure – from generation to delivery to end use. The company is a leader in alternative energy, providing proven, megawatt-scale wind turbine designs and electrical control systems. The company also offers a host of Smart Grid technologies for power grid operators that enhance the reliability, efficiency and capacity of the grid, and seamlessly integrate renewable energy sources into the power infrastructure. These include superconductor power cable systems, grid-level surge protectors and power electronics-based voltage stabilization systems. AMSC’s technologies are protected by a broad and deep intellectual property portfolio consisting of hundreds of patents and licenses worldwide. More information is available at