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www.windtechnologies.com

Commercialization

In order to realize the benefits of innovation commercialization is required!

Commercialization is the process or cycle of introducing a new product into themarket. The actual launch of a new product is the final stage of new productdevelopment, and the one where the most money will have to be spent foradvertising, sales promotion, and other marketing efforts.

Product Development

Process

Marketing & Selling Process

CommercializationC1/29

Initial screening

Preliminary market

assessment

Preliminary technical

assessment

Detailed market study

Preliminary business analysis

Product development

Alpha tests

Beta tests Test market

Trial production

Final business plan

Production ramp up

Market launch

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Different Stages in NPD:

1. Initial screening: The initial decision to go ahead with the project; the idea havingbeen screened in from several alternatives.

2. Preliminary market assessment: The preliminary market study: a "quick and dirty"situation analysis of the marketplace, possible market acceptance and competitiveassessment.

3. Preliminary technical assessment: An initial technical appraisal, addressingquestions such as "can the product be developed? can it be manufactured?" etc.

4. Detailed market study Marketing research: detailed market studies such as userneeds-and-wants analysis, concept tests, positioning studies and competitiveanalyses.

5. Preliminary business analysis: Comprehensive business analysis with projectednet present values, pro-forma income statements, etc.

6. Product development: The actual development of the physical product leadingup to a prototype.

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13. Market launch: The implementation of a comprehensive marketing plan.

7. Alpha tests: Testing the product in-house under controlled or laboratory conditions.

8. Beta tests: Testing the product with customers field trials.

9. Market Test: An attempt to sell the product to a limited market area or customers,to gauge product acceptance in a real market context.

10. Trial production: A limited trial, or batch production run, designed to proveproduction facilities.

11. Final business plan: A final business and financial analysis prior to launch.

12. Production ramp up: Full-scale production.

Different Stages in NPD:

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67% of NPD fail in the commercialization process.

Success33%

Fail!!!67%

Commercialization Success Rate

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In some others, it is the launch process and its execution that is at fault.

Why?!?!?!?

In some cases, the product development process is flawed to start with.

In others, the product concept is very poorly backed by market research.

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Commercialization:

Incremental

Breakthrough

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Commercialization:

When?

Where?

To Whom?

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Mistake #4:Faulty product positioning.

Mistake #1:An overwhelming tendency to treat to both incremental and breakthrough projects both the same.

Mistake #2:Tendency to assume that breakthrough products activities need plenty of sources and management support.

Mistake #3:It makes sense to adopt the existing manufacturing-sales systems for the new product.

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www.windtechnologies.com

Case Study

Management and Key Staff

Gehan Amaratunga( non-executive

Chairman )

Ehsan Abdi(CEO)

Richard McMahon(CTO)

Hashem Oraee(non-executive

Director)

Peter Tavner( non-executive

Director)

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Technology

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Technical overview

Background

1. Collaborative project between Cambridge & Durham

university

2. Publications

3. Awards from : Worshipful Company of Scientific Instrument Makers

Cambridge University Entrepreneurs (2004)

the Institution of Engineering and Technology or IET (2005)

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Key Benefits:

Higher reliability

Lower maintenance

Lower cost

Technology: Brushless Doubly-Fed Induction Generator

Two-Stage Gearbox4/29

Drive Train

Generator

Gearbox

Rotor Blades

Mechanical Brake

Rotor Hub

Yaw System

Hydraulic System

Other

Electrical Control

Electrical SystemLWK Failure Rate, approx 5800 Turbine Years

WMEP Failure Rate, approx 15400 Turbine Years

LWK Downtime, approx 5800 Turbine Years

WMEP Downtime, approx 15400 Turbine Years

1 0.75 0.5 0.25 0 2 4 6 8 10 12 14 Failure/turbine/year Downtime per failure (days)

Failure/turbine/year and Downtime from 2 Large Surveys of European Wind Turbines over 13 years

Failure rate and downtime for wind turbine subassemblies

Source: F. Spinato et al., “Reliability of wind turbine subassemblies”

IET Proceedings, Renewable Power Generation, Vol. 3, No. 4, pp. 1-15, 20095/29

Reliability Study for a 2 MW Wind Turbine

Subassembly Description RPN

Drive Train

- Conventional Doubly Fed Induction Generator

- 3 stage gearbox100.0

- Innovative Brushless Doubly Fed Induction Generator

- 2 stage gearbox90.1

GeneratorDFIG 17.5

BDFIG 15.6

GearboxThree Stage (1st stage Planetary) 30.4

Two Stage (1st stage Planetary) 22.4

Other Components 52.1

RPN: Risk Priority Number

Source: FP7 Reliwind Project 6/29

Innovation

Intellectual Property

Application

numberShort title First priority date Status

0810865.6Power

Generators13 June 2008

Has been filed (not yet

published) - Applied for PCT

0810867.2Power

Generators13 June 2008

Has been filed (not yet

published) - Applied for PCT

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Innovation

Prior Art

at Oregon State University with support from the

US Department of Energy (mid-1980s)

Potential Competitors

brushless doubly-fed induction generator (BDFIG)

brushless doubly-fed reluctance generator (BDFRG)

brushless doubly-fed twin stator induction generator

(BDFTSIG)

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Innovation

Alternative Technologies

doubly-fed slip-ring induction generators (DFIG)

permanent magnet generators (PMG)

Drawbacks for DFIG

the additional cost and bulk of the slip-ring system

the need to maintain brush-gear and to replace brushes on a

regular basis

failures of wind turbines due to failures of the slip-ring system

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Market

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Drive Train

TechnologiesArchitecture Speed Generator

% of Market

(2009)

High

High

Mid

Low

DFIG

PM

IG

PM

Synchrono

us

70%

15%

15%

B

2008 Generator

market

€1.1 bn

€220 m

€220 m

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Economic Benefits

Onshore 1MW

wind turbine

(NEW)

Onshore 1MW

wind turbine (as

retrofit)

Onshore 3MW

wind turbine

(NEW)

CAPEX Saving € 6,600 € 4,100 € 23,000

OPEX Saving (Annual -

planned)€ 1,178 € 1,178 € 2,655

OPEX Saving (Annual -

unplanned)€ 380 € 380 € 830

Warranty period savings

(CAPEX & OPEX)€ 12,832 N/A € 36,940

Post warranty period savings

(OPEX)€ 23,370 € 21,812 € 52,277

Whole balance of life savings

(CAPEX & OPEX)€ 36,202 € 25,912 € 89,217

Whole balance of life saving as

percentage of DFIG cost88.3% 63.2% 72.5%

Private & Confidential © Wind Technologies Ltd. 12/29

Installation by Vestas in 2010

Total installation by Vestas7800 MW

2600 of 3MW wind turbines

CAPEX saving €59.8 million

OPEX saving (5 years

warranty)

€38.4 million

OPEX saving (15 years rest of

life)

€136 million

13.5% of

Vestas’ profit

Total saving €234 million

The above figures assume Vestas used the BDFIG in all its 2010 wind turbines 13/29

Private & Confidential © Wind Technologies Ltd.

Comparison of Electrical Systems

System I System II System III

Generator type DFIG BDFIG IG PM SG PM

Gearbox Yes Yes Yes Yes No No

Market share 70 % - 10 % 5 % 13 % 2 %

CAPEX (Generator &

Converter)

OPEX (Generator & Converter)

Grid compatibility

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Wind Turbine Market and Generator Suppliers


Turbine

maker

Market

share

in 2008

Generator

typeGenerator provider

Vestas 19 % DFIG Weier, ABB, Elin, LeroySomer

GE 18 % DFIG PMG Winergy, ABB, Loher

Gamesa 11 % DFIG Ingeteam, Indar, ABB

Enercon 9 % SG Enercon

Suzlon 7 % IG Suzlon, Elin

Siemens 7 % IG Winergy, ABB

Acciona 4 % DFIG ABB

Goldwind 4 % PMG

Sinovel 4 % DFIG ABB

Nordex 4 % DFIG VEM

Others 13 %

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Wind Turbine Market and Generator Suppliers


Generator supplierManufacturing

location

Market share

in 2008Customers

ABBChina, Estonia, Finland,

India

40 %

(steady)

Vestas, Gamesa, GE,

Siemens, Acciona

Enercon Germany13 %

(decreasing)Enercon

Leroy Somer France12 %

(decreasing)Vestas

Elin Austria, India, China8 %

(decreasing)Suzlon, Vestas

Ingeteam China, Spain6 %

(increasing)Gamesa

Winergy Germany6 %

(decreasing)Siemens, GE, Vestas

Others15 %

(increasing)

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Wind turbine market

wind power industry installed more than 27,000 MW in 2008

more than €36.5 billion

bringing the global market to more than 120,000 MW

36% increase on an annual basis and a 29% cumulative growth

wind generation capacity will stand at 332,000 MW in 2013

56,000 MW of new capacity will be added in 2013

wind turbine market is expected to reach €80 billion in 2013

Private & Confidential © Wind Technologies Ltd.17/29

Wind generator market

reached about €1.5 billion in 2008

is expected to be worth more than €3 billion in 2013

DFIG had about a 70% market share in 2008, equivalent to

€1.1 billion and would be worth €2.1 billion in 2013

BDFIG can potentially address a €2.1 billion market in 2013

Private & Confidential © Wind Technologies Ltd.18/29

Annual market & Retrofit market value

Annual market value 2008 2013

Wind turbine industry €36.5 billion €80 billion

Generator

(~4% of the cost of wind turbine)€1.5 billion €3 billion

DFIG market

(70% of generator market share)€1.1 billion €2.1 billion


Retrofit market 2008 2013

World wind power installed capacity 120,000 MW 332,000 MW

DFIG retrofit market €100 million €250 million

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Commercialisation Strategy for the ‘Big’

Wind Market

Potential Opportunities in the ‘Big’ Wind Market

BDFIG for new wind turbines

Retrofitting in existing wind farms

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Our Product

Brushless DFIG Control Board

+

Typical retail

price:

€35,000 / MW €500 – 700Estimated cost:

€50,000 / MW €5000 – 700021/29

Commercialisation Strategy for the ‘Big’

Wind Market

Exploitation Strategy

The main feedback received from the industry

the availability of quantified figures for the

BDFIG’s economic case

Demonstration of performance of the BDFIG on real

scales and within wind turbines

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Commercialisation Strategy

number of key milestones in exploiting the BDFIG technology

In-depth market studies have been carried out and potential customers for the BDFIG have been identified;

The BDFIG has been demonstrated on a small scale wind turbine (20kW, 18 meters height) which has led to performance verification of the technology in a wind turbine and under normal wind conditions;

The economic case for the BDFIG for onshore wind applications has been quantified in terms of both capital and running costs. The outcomes show a strong case for exploiting the BDFIG.

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Commercialisation Strategy

Sales Plans

Incorporating in

new wind turbines

Retrofitting in existing wind turbines

Market

JV Subcontract

and/or License

JV Subcontract

and/or License

Business

Model

Wind turbine

manufacturers

Generator

manufacturersCustomers

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‘Small’ Wind Exploitation

Market Analysis

Company Country kW sold in 2008

Southwest Windpower US (AZ) 10,000

Proven Energy Ltd UK (Scotland) 4,800

Northern Power US (VT) 4,300

Entegrity Wind Systems Canada (PE) / US (CO) 3,500

Bergey WindPower Co. US (OK) 1,700

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‘Small’ Wind Exploitation

Market Analysis

2008 U.S. Sales 2008 Global Sales

17.3 MW 38.7 MW

78% growth over 2007 53% growth over 2007

10,500 units 19,000 units

$77 million in sales $156 million in sales

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Small Scale Technology Demonstration20kW Wind Turbine with BDFIG Rated power

Hub height

Rotor diameter

Generator

Gearbox

Converter

Yaw

20 kW

12.5 m

11 m

BDFIG

2 stage helical

Fractional – Grid connected

Free yaw

West Cambridge Site, CambridgeInstalled in March 2009

SWOT Assessment

Strengths

Weaknesses

Opportunities

Threats

Technical Risk

Commercial Risk

Social/Political Risk

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Exit Plans

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Thank You

Documents

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