Small Wind, Big Future? Pete Allen C.E.O.

Evance – formerly known as Iskra Wind Turbines

Evance is the new name for Iskra Wind Turbines, to support our international expansion and new products

Evance, founded in 1999, design and manufacture small wind turbines in the UK, based on expertise gained in designing utility scale turbines

Our lead product is the Evance Iskra R9000, a 5kW turbine typically mounted on a 12m free standing tower

Producing 9000kWh of energy per year (at a 5m/s site), our main markets are rural and semi-rural residential homes, schools, farms, and light commercial.

Characteristics of Small Wind

ProductTechnologyMarketCosts

Small wind – Product Characteristics Define small wind as 3kW – 50kW, on free-

standing towers – 10m – 20m high

On a ‘human’ scale – ‘tree-sized’ or lamp-post’ sized and so blend into the environment

Generate useful amounts of energy – e.g. Evance Iskra R9000 will produce sufficient for two homes

For the individual on-grid owner, selling surplus energy to the grid is a key part of the economics

Distinct from Micro wind – c. 1kW, often building mounted

Distinct from Utility scale wind – e.g. wind farms –’power station replacement’

Enables distributed generation – no transmission losses

Small wind – TechnologyMercedes McLaren SLR

• 0 – 60mph: 3.8 seconds• 466kW, 7000rpm• Aerodynamics – vital• Engineering difficulty – hard

Evance Iskra R9000• 0 – 60mph: never• 5kW, 220rpm• Aerodynamics – vital• Engineering difficulty – harder?

Small wind turbines are exponentially harder to engineer than micro wind

Interface between aerodynamics, electrical, mechanical and structural loading very complex and difficult to optimise

Expertise to design and engineer is globally thin on the ground

UK leads the world in this technology

Max wind speed over aerodynamic surface = c. 240 mph

Max wind speed over aerodynamic surface = c. 150 mph

Small wind – Market

Current market is predominantly developed world – UK, North America, Europe

UK & USA are biggest markets – USA set to expand rapidly with new incentive scheme

UK will hopefully follow suit when appropriate incentive mechanism is implemented (Feed-in Tariff)

Predominantly On-Grid applications, some Off-Grid

Volumes are hundreds of small turbines per year

USA leads in market volumes and Government support – including finance and expertise for R & D

Small wind – Costs

Predominantly manufactured in high cost economies

Volumes only hundreds per year - very low in manufacturing terms

In the UK, planning and grid connection permission accounts for up to 10% of the installed cost

The difficulty and inconsistency of planning and grid connection is estimated to reduce sales by half – reducing volume and increasing sales costs

Low volumes mean installation costs are also relatively high

Against this cost background, what are the current economics?

The economics of small wind and theImportance of Volume

Small wind – Current Economics

How does small wind compare to other energy sources?

Small wind is already approaching grid electricity costs, delivered Small wind is the most economic distributed electricity source

available:• 2 times more cost effective than solar PV or diesel generation

Source Generated Cost p/kWh

Delivered Cost p/kWh

Grid 2 – x? 10

Big Wind 5-7 10

Solar PV 30 30

Diesel Genset 35 35

Small Wind 15 15

Unsubsidised cost over 20 year life, order of magnitude, UK prices

Cost/kWh generated

Maturity of technology & market

Small Wind x1

Big Wind x .5

Solar PV x2

Diesel Genset x2.3

Volume00’s 000’s 00,000’s Millions

No reduction possibleSome reduction possible

> 50% reduction possible

Costs vs Volume – where are we now?

Cost/volume curve

Costs vs. Volume – Conclusions

An Evance Iskra R9000 has roughly the same manufactured cost as a Ford Focus!

• but is only one quarter of the weight

• and has c. 30 times fewer components

Volume production will clearly reduce costs – by up to 80%

This would enable a reduction in installed cost by 50%

Small wind would become economically viable unsubsidised if produced in sufficient volumes

E.g. same volumes as Solar PV, heavily subsidised by UK, USA and European Governments

No technology leap is required – it exists now!

All that is required is volume

The cyclical effect of increasing volumes

Large volume increase

minimises cost

Increased volume reduces costs

Improved economics generate significantly

higher demand

Imagine market reaches 10,000 units/year ~ £150m• or 60% of the UK Government pledge on electric vehicles• or c. 20% of just one new car model

Result: Small Wind rapidly achieves full economic potential

Mass market, and significant role in CO2 reduction

Conclusions – the Future of Small wind

The UK leads the world in small wind technology

The technical barriers to entry are high

Current volumes are very low, so costs are high…

…but small wind is already the most economic distributed generation technology

High volumes would reduce costs substantially, to point of mass market

There is no requirement for new technology – it is all available

But there is a requirement for design for high volume

This Future will be delivered by: Governments: Costs of inconsistent and unnecessary barriers

must be removed• Minimal but sensible planning and grid connection

Governments: Stop ‘love affair’ with Solar PV• Technology blind incentives – let the market decide

Governments: Incentives sufficient to rapidly expand market• Appropriate level of Feed-in Tariff

Governments: support for Product Development for higher volumes

Manufacturers: Deliver high reliability with much lower costs

Market: Economic renewable energy generation on mass scale

Government: Subsidies eventually phased out

The UK can, and should, take the lead

Thank you