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.

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 Product Technology Market Costs

Product

Technology

Market

Costs

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

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 – Technology Mercedes 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

Mercedes 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

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

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?

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 the Importance 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 Unsubsidised cost over 20 year life, order of magnitude, UK prices 15 15 Small Wind 35 35 Diesel Genset 30 30 Solar PV 10 5-7 Big Wind 10 2 – x? Grid Delivered Cost p/kWh Generated Cost p/kWh Source

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

Cost/kWh generated Maturity of technology & market Small Wind x1 Big Wind x .5 Solar PV x2 Diesel Genset x2.3 Volume 00’s 000’s 00,000’s Millions No reduction possible Some 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

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 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 Large volume increase minimises cost Increased volume reduces costs Improved economics generate significantly higher demand Result: Small Wind rapidly achieves full economic potential Mass market, and significant role in CO2 reduction

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

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

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