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Presented to Central MN Developers – 11-15-2010

A Minnesota, USA, Based Limited Liability Corporation. Presented to Central MN Developers – 11-15-2010. Mark Bauerly David Winkelman Dan Marrin Tom Braegelmann Doug Joseph. Babe Winkelman Doug Wogstad John Kaliszewski Dan Whalen. Principals /Owners. Water Foundation.

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Presented to Central MN Developers – 11-15-2010

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  1. A Minnesota, USA, Based Limited Liability Corporation Presented to Central MN Developers – 11-15-2010

  2. Mark Bauerly David Winkelman Dan Marrin Tom Braegelmann Doug Joseph Babe Winkelman Doug Wogstad John Kaliszewski Dan Whalen Principals /Owners

  3. Water Foundation Small Wind Turbines, LLC Eco-WERC Small Wind Turbines (Founding Company) Develop Model for Sales / Installation of small wind turbines and solar electric Manufacturing, Sales and Installations of small wind turbines Education for green energy solutions Small wind turbines generator rights worldwide: 5-99 kw Manufacturing and sales in MN Sale of generators to balance of world US manufactured turbines with GMI generator Develop sales network outside USA through contacts with partnerships, etc. Eco-WERC develops media / marketing programs Small Wind Turbines will sell and distribute turbines in USA

  4. The Eco-Dome Conservation Campus is located near South Long Lake, SE of Brainerd, MN (5 miles East on Hwy 18 then 5 miles South on CR 23). Open for Tours M – F, 9am to 5pm. • Minnesota Office of Environmental Assistance • Minnesota Governors Green Building Award • Minnesota Waste Wise Awards

  5. 1973 Winkelman Farm turbine

  6. Small Wind 101:An Overview of Small-Scale Wind Electric Systems (less than 100kw) Distributed, Clean, Affordable Energy for Homes, Farms & Businesses (www.ecowerc.com) Difference is like buying a Train versus a Truck

  7. Kilowatt = 1 lb of Coal Kilowatt Hour: KWH KWH / Month / Year Tax Credit = $ Reduction Tax Deduction = Based on Income Tax Bracket Green Credit = Carbon Grant = Free Money Distributed Wind = Plug into existing power lines anywhere. Finders Fees = One percent paid to you for referrals on sales Interconnection= Hook up to power company. Definitions and Terms

  8. Small Wind Turbines are less than 100kw and most qualify for Net Metering Our 3000 watt Whisper was installed in 1997 and is producing enough power for a cabin or a small home (200 KWH/Month)

  9. Our 20 kw Jacobs sits on a 120’ tower and produces about 10,000 kwhs per year here. The same system placed in western MN produces about 30,000 kwhs per year.

  10. Big Wind Turbines (over 100kw) are in a different business class. Net Metering rules allow only up to 40kw per site in MN. All states vary, 0 to 5mw.

  11. Distributed Wind Power Benefits • Energy on Site • Smaller Initial Cost • Save/Make Money • Easier Permits • Use Existing Power lines • Thousands of Locations • Help Spread the Wealth

  12. Federal ITC = 30% USDA REAP = 25% MN Grant = 35% MACRS Depreciation Net Metering Free Electricity Antenna Leasing Green Credits (REC) Feed In Tariff (FIT) Power Co. Rebates Other Grants Educational Sponsors IINCOME & BENEFITSfor Small Wind Turbines

  13. In Minnesota alone, there are over 100,000 rural hookups possible for small wind turbines in areas of good wind. There are only about 150 small turbines now installed in MN.

  14. GMI GENERATOR COMMERCIALIZATION PLAN SMALL WIND TURBINE, LLC

  15. Global Installed Wind Power Capacity (MW) (reference: Global Wind Energy Council (GWEC)) End 2008New 2009Total end 2009 World 120,550 37,466 +31% 157,899 U.S. 25,237 9,922 +39% 35,159 Europe 65,741 10,526 +16% 76,152 Asia 24,272 14,639 +60% 38,909 1.1

  16. Global electricity consumption is growing at 2.5% annually from 4.2 TW in 1997 to a projected 7 TW by 2030 (Pike Research, 2010). Conventional power plants operate at only 30%-35% efficiency and are responsible for 10B tons of CO2 emissions annually. The U.S. is the number #1 emitter of CO2 at 2.8B tons with China second at 2.7B tons (Center for Global Development, 2007). 1.11

  17. GMI-GEN Value Proposition • Technical Value • Dual stator design, a generator within a generator (radial flux design). • 48 poles vs conventional design of 70 poles. • 40% fewer active components. • Weighs 40% less than competing generators. • Higher operating efficiency (96%) than competing generators (80%) • Higher output than competing generators: 20kW unit output at 18 mph. • Direct drive design, no gearbox, extra bearings or shafts. • Market Value • State-of-the-art Intellectual Property, world-wide rights • Late stage product development: commercialization 2Q 2011 • $38M net present value thru 2023 (SWT Business Plan) 5.1

  18. License and Technology Review GMI- Radial Flux Technology

  19. License Status • To: Small Wind Turbines, LLC (SWT) • Permitted Application: 5kw -99kw small wind • Permitted Territory: Worldwide • License Type: Exclusive • Right to manufacture or have manufactured • Right to sell and distribute • Subject to: Product Development & Licensing Agreement dated January 26, 2009 • Paid development in full. Shipping in 2 weeks.

  20. Radial Flux Technology (RFT) T Flux trials over a decade RFT a derived technology from T Flux RFT prototype tested by Garrad Hassan SWT designs complete to prototype

  21. Key Features 5 kw Conventional Generator 5 kw Radial Flux Generator • Light and Compact due to its innovative design. • Unique Permanent Magnet Technology • High Efficiency allows use of smaller drive engine

  22. Traditional Generator Single stator Rotor Permanent Magnet Generator Dual stator

  23. Wind Turbine Benefits • A low rpm permanent magnet direct drive replaces gearbox and high rpm generator • Jacobs (US) used for comparison analysis • Generator/Gearbox weight reduced by 43% • Electrical generation efficiency increased 30%

  24. Jacobs 20kw vs. RFT Gearbox Generator

  25. Wind TurbinesRFT vs Jacobs Gearbox Turbine • Conclusions 43% less weight 30% greater power • Produces usable power from low wind speeds

  26. RFT based Turbine(concept only)

  27. 20kW RFT Completed Design

  28. 20kw RFT Completed Design

  29. Generator Prototype Status • Three prototypes were made for SWT • 10 kw and 20 kw now complete, • 40 kw almost completed by 11/15/10 • All three will be complete by 11-30-10 • Testing, modifications and tooling • complete for all units here by 12-31-10

  30. SWT 20 kw Prototype on Test rig. (Watch movie & Take break)

  31. GMI-GEN Value Proposition • Economic Value • Lower production costs due to • lean design. • Priced 35%-50% less than competing • generators. • Higher projected gross margin than • competing generators. • Lower maintenance costs due to fewer • components and direct drive design. • Reduced shipping costs. • Reduced installation costs due to lower unit weight. 5.2

  32. Next Steps for Small Wind Turbines, LLC • Find a MN factory / partner to build generators • Sell generators to other wind turbine companies • Partner with other turbine companies • Develop better blade technologies • Develop better controllers / inverters • Develop better towers • Partner with Utility Companies • Partner with Communication Companies • Roll out to other countries

  33. Small Wind Market Assessment • US MARKET • Less than 1% of the total installed wind capacity • 2009 Sales ; 9,800 units, 20.3 MW capacity, continued 20% growth • (AWEA, 2010). • GLOBAL MARKET • 2009 Sales; $203M, 49% capacity • 2010 Projected Sales; $412M, 115 MW capacity • 20% annual growth rate (Pike Research 2010) 1.3

  34. Small Wind Market Assessment • 2009; $4.8B Invested in clean energy in the US, $80M invested in • small wind technology. (North American Venture Capital Assoc., 2009) • Cost per kW capacity reduced from $7,000 to $4,500 since 2000. FROM $7,000 TO $4,500 1.4

  35. Industry Drivers (John Kaliszewski) Basic Drivers • Energy independence e.g. national security, community energy systems • Environmental impacts e.g. global warming • Economic development e.g. jobs creation • Distributed energy requirements e.g. efficient electricity delivery • Increasing demand for electricity e.g. 2.5% annually • Rural development e.g control growth • Conventional power plant planning cycle e.g. 30 to 40 years • Inefficient transmission system e.g. system failures and energy losses • Conventional energy system costs e.g. recalculation of real costs 2-1

  36. Distributed Energy Systems (DES) • Market sector primarily individual homes, businesses or • farms/ranches or clusters. • Limited transmission infrastructure required. • Supports and helps solve peak demand rates. • Supported by “net metering” state/federal grants, feed-in tariffs. • Utilizes complementary renewable energy technology. • Scenario: 20kW capacity systems could produce 40,000kWh per year. • A typical residence (U.S.) utilizes approximately 10,000 kWh per year • leaving 30,000 kWh for “net metering.” Sector sales projections: Installation of 28,000 DES in the period 2011-2015. 15,000 10kW units @ $3,000 = $45M 10,000 20kW units @ $5,000= $50M 500 40kW units @ $13,000 = $32.5M 100 100kW units @ $25,000 = $12.5M Total generator sales = $140M 20% market share by GMI-GEN= $28M 4.3

  37. Policy / Incentives • National infrastructure development e.g. UHV transmission networks, • SMART Grids • Government subsidies e.g. 35% Capital Investment Tax Credit, Production • Tax Credit, Grants • State and Federal Renewable Energy Standards e.g. 20%-30% renewable • energy of the total energy portfolio within 10-20 years • Environmental mitigation e.g. Cap & Trade regulation • Feed-in-tariffs e.g. flexible front-end project funding • Net metering e.g. required utility purchase of renewable energy 2-2

  38. Technology Integration Integrate complementary renewable energy technology solutions in order to leverage strengths and weaknesses and reduce the risk of intermittency. ·Small wind energy ·PV ·Biomass ·Hydrogen ·Electricity storage 3.1

  39. Small Wind Market Sector Opportunities Telecommunications • Global telecommunications industry (Pike Research, 2010) • $3.85 T in revenues in 2008, 8% annual growth. • Industry leaders: Alcatel-Lucent, British Telecom, • China Mobile. • Estimated 100,000+ telecomm transmission sites • globally. • Status: Telecom sites utilize 10kWh-1,000kWh per day. • Industry regulations require 72 hours of on-site electricity • reserve. Sector sales projections: Installation of systems at 21,000 telecom sites, 2011-2015. 21,000 small wind turbines (10kW- 100kW) Generator sales only: $105M 20% market share by GMI-GEN =$21M 4.1

  40. Community Energy Systems • Rural communities depend on community-based energy systems for • energy independence, revenue and economic development. • Community-based Energy Development (C-BED) models operate in 30 • U.S. states.(University of Minnesota, 2010) • Partnerships with utilities for financial and technical assistance. • Funded through feed-in-tariffs. • 2MW of C-BED projects generates $3.3M of local income. • (U.S. Government Accounting Office, 2010) • C-BED projects have majority ownership by communities or local investors. Sector sales projections: Installation of community energy systems in 200 communities, 2011-2015 4000 small wind turbine systems (100kW) Generator sales only: $100M 20% market share by GMI-GEN = $20M 4.2

  41. Existing Wind Fields • Small wind turbines could effectively expand the capacity of wind farms • by 1.2%-2.5% as fill-in units. • Estimated 750 commercial wind farms in the U.S. • 35%-40% of wind farm costs are non-turbine costs. (AWEA, 2008) • Scenario: 24 kW 50kW units = 1.2MW to a100MW wind field • adds 1.2% capacity. Sector sales projections: Installation on 150 wind fields = 3,600 50kW units, 2012-2015 3,600 @ $13,000 = $46.8M (generators only) 20% market share by GMI-GEN = $9.36M 4.4

  42. Irrigation Systems • 55M irrigated acres in the U.S. on 210,000 units. (USDA) • Consumed $1.5B of electricity in 2008, avg 72,000kWh/year per unit. • 28,000 irrigation systems consumed in excess of $20,000 in electricity • in 2008. (USDA) • Seasonal demand curve. • Excess energy could be “net metered.” Sector sales projections: 2000 systems installations, 2012-2015 2000 50kW units @$13,000 = $26M 2000 100kW units @ $25,000 = $50M Total generator sales = $76M 20% market share by GMI-GEN = $15.2M 4.5

  43. High Wind Environments • Defined as Class 6-7 wind: 18-20mph. • Energy in a 26mph wind is 8x that of • the energy in a 13mph wind. • Scenario: 100kW turbine at 13mph wind = 220,000kWh/year while operating • in a 26mph wind the output would be 1,776,000kWh/year. Sector sales projections: 40 installations in 2012-2015, 2400 turbines 800 50kW units @ $13,000 = $10.4M 1600 100kW units @ $25,000 = $40M Total generator sales = $50.4M 20% market share by GMI-GEN = $10.1M 4.6

  44. Remote Operations • Includes military installations, mining operations, forestry operations and • other natural resources processing facilities. • High value, strategic installations. • Critical operations require complementary energy systems and redundancy. • Scenario: 20 100kW turbines per project = 2MW wind capacity Sector sales projections: 80 project installations, 2012-2015 1600 100kW units @ $25,000 = $40M 20% market share by GMI-GEN = $10M 4.7

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