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Minesto Tidal and Ocean Current Energy

Minesto Tidal and Ocean Current Energy. Dr. Martin Edlund Chairman of the Board Martin.edlund@minesto.com Minesto AB Tokyo, UK Embassy , October 9, 2014. Executive Summary. Minesto AB is a tidal energy company spun out from Saab Group in 2007

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Minesto Tidal and Ocean Current Energy

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  1. Minesto Tidal and Ocean Current Energy Dr. Martin Edlund Chairman of the Board Martin.edlund@minesto.com Minesto AB Tokyo, UK Embassy, October 9, 2014

  2. Executive Summary Minesto AB is a tidal energy company spun out from Saab Group in 2007 26 dedicated staff includingR&D and business experts from wind power, tidal power and automotive industries Patented technology: Deep Green is unique in its ability to cost effectively produce electricity from low flow currents at a wide range of depths Minesto’s technology provides unique access to global tidal stream and ocean current resources not economically accessible to most other marine energy technologies Minesto has received €15M and is now seeking €20M in private funding to take the company from a pre-revenue position to a revenue position Minesto is seeking €20M in matched grant funding fromWelsh Government (European Union Structural Fund)

  3. Market with great potential Minesto’s ability to produce cost-efficient electricity at low velocity sites significantly expands the market potential, the market is valued to €250 billion in annual electricity sales Minesto tidal market World market ocean currents • Complementary market – Ocean currents • KuroshioCurrent Taiwan: 19GW (38.000 units) • KuroshioCurrent Japan: 8GW (16.000 units) • Florida Current: 27GW(54.000 units) • AustralianCurrent: 18GW (36.000 units) Minesto’s products have a global market potential to generate electricity for £135 billion in annual yield. “The Deep Green technology is able to operate economically at sites where no other renowned technology has been identified”

  4. Global potential and government support Japan - 22GW* - 10% renewables by 2020 Canada - 6300 MW* - 250MW marine by 2020 - Feed in tariffs Korea - 288,000 tonnes of oil-worth* - 16% marine by 2024 • PRC • -14GW* • 15% renewables by 2020 • Investors Europe - 20GW* - 20% renewables by 2020 - Horizon 2020 Chile - $25M investment in marine - High electricity costs USA - 250 TWh/year* - 25% renewables by 2025 - Feed in tariffs • Potential market is substantial • Minesto expands the practical resource beyond those numbers! * Tidal stream potential energy Sources: An overview of ocean renewable energy in China, Yuhe Jiao; DHI study for Minesto; http://www.nippon.com/en/in-depth/a01203/; The transition to green energy in China, Japan and Korea, Innovation Norway; http://energy.gov/eere/water/marine-and-hydrokinetic-resource-assessment-and-characterization; Global trends in the emerging ocean energy market, IEA

  5. Markets activities • UK • R&D site in Northern Ireland • 10MW Demonstration Site in Wales • Member on the MSG R-UK • Grants from Carbon Trust, DECC, Eurostar • 100% of the shares in Minesto UK • Norway • Vegdirektoratet has identified Deep Green as the most suitable technology • Proposed feasibility & demo proposal of €2,5 submitted • Japan • Established relationships with large OEMs, universities and developers • Tidal and Ocean currents • Korea • Established relationships with large OEMs, universities and developers • North America • MOU with SNMREC to develop a test site in the Florida Current • Discussions for partnership with Worcester Polytechnic Institute • Taiwan • Seeking joint demonstrator with NTOU • Strong awareness of potential with ocean currents • Chile • MoUunder development with Green elements • Discussions with local governments and IADB for funding • South Africa • Detailed projects discussion with University of Stellenbosh and TIA • Site identified • Maldives • UN lead project worth €7M to install 1 MW • Minesto have quoted work of approximately €1M for project dev. • China • More than 4000MW potential with a 10% SIF • Manufacturing capabilities • Advisor and share holder based in Hog Kong CONFIDENTIAL

  6. UK – the Leading Market in Europe • Strangford Lough – Northern Ireland • 1:4 test installation • R&D test platform • Performance & reliability optimization • O&M process development • Commercial sites identified • Holy Head Deep - Wales • 10 MW Demonstration Array Agreed • Discussion on a €20M project with 50% match funding from WEFO • Working relations with PMSS, Bangor Uni, SEACAMS, Swansea Uni • UK perspective • Member of the Marine Strategy Group- RUK since 2008 • Working relationship with gov. bodies; DECC, Carbon Trust, Crown Estate, WEFO • Working relationship with Bangor, Strathclyde, Swansea and Queens Uni • Supply chain for manufacturing, installation and Site Development • Joint EUROSTAR project with Atlantis Resource Corporation for wing development • Isle of Wight – SOLENT • 30MW site developed by TB Partners LLB and Isle of Wight Council • Possible for a 5MW “plug and play” solution for Minesto CONFIDENTIAL

  7. Our Plan: Holyhead Deep 10MW installed 2019 • Project • Installed capacity: 10MW • Installed devices: 20 DG500 • Project financials • Project cost: €60M • IRR: 7-15% CONFIDENTIAL

  8. The competitive landscape 2nd generation technologies • Diverse technologies • Demonstration stage or earlier • Minesto complements 1st gen tech Marine Current Turbines Rated Power: 1.2MW Rated velocity: 2.4+ m/s Corporate backer: Siemens Flumill Rated Power: 4MW Rated velocity: n/a Corporate backers: none Scotrenewables Rated Power: 2MW Rated velocity: 2.5 m/s Corporate backers: ABB, Fred Olsen Ocean Current Generation System Rated Power: 4MW Rated velocity: n/a Corporate backers: IHI, Toshiba, Mitsui ORPC Rated Power: 0.5MW Rated velocity: 3 m/s Corporate backers: none Andritz Hydro Hammerfest Rated Power: 1MW Rated velocity: 2.2 m/s Corporate backer: Andritz Hydro Minesto Rated Power: 0.5MW Rated velocity: 1.5 m/s Corporate backers: none Open Hydro Rated Power: 1MW Rated velocity: 2.6 m/s Corporate backers: Bord Gais, DCNS 1st generation technologies ‘Underwater wind turbines’ Strong corporate backing Absorbed ‘first-mover’ costs

  9. Deep Green – how it works 75% of tidal current energy is in the upper 50% of the water column Specifications The figure-of-8 flight path is controlled by a rudder attached to the plant A tether attaches the turbine to the seabed and delivers electricity to the grid Illustration of Deep Green in action

  10. Seabed mounted Surface mounted Test plan CONFIDENTIAL

  11. Electricity production in low velocities Depth: 80m Current velocity: 1.5m/s 75% of the energy is in the upper 50% of the water column… … and 25% is in the lower 50% Deep Green 0.5MW@1.5m/s Wing span: 12m Tether length: 90m Scaled up 0.5MW@1.5m/s Diameter: 32m Hub height: 60 1MW@2.5m/s 0.25MW@1.5m/s Diameter: 18m Hub height: 28m

  12. What are the cost drivers? Site Accessibility • Significant lower max peak • Lower flows = Less turbulence • Cable laying • Installation & O&M windows OPEX • Small vessel decreases cost • Smaller devices enhance the mobilization and service speed • Most service can be made on land CONFIDENTIAL

  13. Deep Green – competitive advantages Tidal energy competitor comparison • Unlocks new tidal market Only known technology that operates cost-efficiently using low velocity tidal streams (1.2-2.4 m/s) • High efficiency Kite motion accelerates water flow through the turbine, significantly increasing energy production • Small size and weight Each unit weighs 7 tonnes, 10-25 times less per MW than competing technologies • Low-cost offshore operations Able to use smaller and cheaper vessels for O&M and installation than competing technologies • Utilisation of ocean currents

  14. Proven technology in real conditions • Complete power plant installed • Focus on performance and design freeze • Most cost effective R&D platform in the industry

  15. Competitive with conventional technology Why? • Half CAPEX cost • 1000 times the energy (energy output proportional to velocity cubed) • Small vessels used for operation and maintenance Remote Islands CfD until 2019 CfD after 2019 NEDO Phase 1 NEDO Phase 2 CONFIDENTIAL

  16. Deep Green – technology roadmap 9 Deep Green Array 2017-2018 • 1:1 scale • Integrate in infrastructure • Inter array cabling 5 SeaKite II 2011 • 1:10 scale ocean trials • Consistent power production • Environmental impact assessed QuappenKite 2006 • Prototype tests • Proved kite steering control system 8 Deep Green Utility 2016 • 1:1 scale • Deep water installation • O&M and decommissioning 1 Survivability analysis • FMEA and HAZOP testing • SIMLOX used to simulate O&M 3 7 SeaKite I 2009 • Tank tests at SSPA and marine tests, Netherlands • Proved electricity production Deep Green Ocean 2013-2014 • 1:4 scale, handled scale up • Power performance proven to 69%. 100% by November 2014 • Use of components from proven manufacturers • Deep Green technology has been extensively tested over the last 8 years. This has proven power generation, demonstrated environmental safety, and de-risked the technology. Minesto is now looking to install and verify a full-scale plant to produce power to a grid

  17. Deep Green – Intellectual property Control Method • Patents granted • Australia, Canada, China, Japan, Mexico, New Zealand, South Africa,South Korea and USA Control Systems Multiple Wings Configuration Main patent Water Lubricated Bearing Wing & Turbine Configuration • Patents pending • EPO (Europe), Chile, Ecuador and Taiwan • Active protection • Minesto continues to protect disruptive innovations Multiple Torque Controlled Turbine Tether Spring/ Pump Tether Control Method 1:4 prototype currently installed in Northern Ireland

  18. Business plan 2014 2015 2016 2017 2018 2019 2020 Funding • Public funding • Private funding • IPO in 2017 • International funding opportunities Licensing • Geographical licensing • Initial payment • royalty fees • Site development • Assessment • Modelling Product sales • Deep Green sales • Commercial arrays • Additional units • Spare parts • Asset management • Minesto is planning to be cash-flow positive by 2019. This is based on on-going licensing contracts, the sale of a 10MW commercial array and contracts for future commercial arrays

  19. Use of funds • Minesto requires €40M+ to manufacture, install and operate a 1.5MW array by 2018. An investment of €20M is required to achieve this goal. This will be matched by a number of grants, which are currently pending: • €20M matched grant funding from Welsh Government body WEFO • €8M in pending applications for grants from Horizon 2020 and Climate-KIC In 2017 Minesto will be producing electricity to consumers, have a customer ready to purchase 20 devices and be ready for an IPO or industrial exit.

  20. Contact Minesto AB Vita gavelns väg 6 426 71 Västra Frölunda Telephone: +46 (0)31-760 2102 E-mail: martin.edlund@minesto.com

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