Presented to Central MN Developers – 11-15-2010

A Minnesota, USA, Based Limited Liability Corporation

Principals /Owners

• Mark Bauerly • David Winkelman• Dan Marrin• Tom Braegelmann• Doug Joseph

• Babe Winkelman• Doug Wogstad• John Kaliszewski• Dan Whalen

Small Wind Turbines

Water Foundation Eco-WERC

Small Wind Turbines, LLC

Develop Model for Sales / Installation of small wind turbines and solar electric

(Founding Company)

Education for green energy solutions

Small wind turbines generator rights worldwide: 5-99 kw

Manufacturing and sales in MN

Manufacturing, Sales and Installations of small wind turbines

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

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

1973 Winkelman Farm turbine

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

Definitions and TermsKilowatt = 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.

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)

Our 20 kwJacobs sitson a 120’tower andproducesabout10,000 kwhsper year here.The same systemplaced in westernMN producesabout30,000 kwhsper year.

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.

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

IINCOME & BENEFITSfor Small Wind Turbines

• 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

In Minnesota alone,there are over100,000 rural hookups possible forsmall wind turbines in areas of good wind.There are only about150 small turbines now installed in MN.

SMALL WIND TURBINE, LLC

GMI GENERATOR

COMMERCIALIZATIONPLAN

End 2008 New 2009 Total 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

Global Installed Wind Power Capacity (MW)(reference: Global Wind Energy Council (GWEC))

1.1

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

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.

GMI-GEN Value Proposition

5.1

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)

License and Technology Review

GMI- Radial Flux TechnologyGMI- Radial Flux Technology

License StatusLicense 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.

Radial Flux Technology (RFT)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

Key FeaturesKey Features

• Light and Compact due to its innovative design.

• Unique Permanent Magnet Technology

• High Efficiency allows use of smaller drive engine

5 kw Conventional Generator

5 kw Radial Flux

Generator

Single stator

Dual stator

Traditional GeneratorTraditional Generator

Permanent Magnet GeneratorPermanent Magnet Generator

Rotor

Wind Turbine BenefitsWind 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%

Jacobs 20kw vs. RFTJacobs 20kw vs. RFT

Gearbox

Generator

Wind TurbinesWind TurbinesRFT vs Jacobs Gearbox TurbineRFT vs Jacobs Gearbox Turbine

RFT G-20-180-A

Jacobs20kw

Speed (rated RPM) 180 1230

Power (rated Kw) 20 20Weight (Kg) 213 262

Generator Type PMG 3 phase Synchronous Brushless 3 phase

Drive Direct 6-1 Gearbox

Gearbox Weight (Kg) No gearbox 114

Combined Efficiency (%) 96% 67.2%

Productive Operating Wind Speed (m/s)

5-12 8-12

• Conclusions 43% less weight 30% greater power

• Produces usable power from low wind speeds

RFT based TurbineRFT based Turbine(concept only)(concept only)

20kW RFT Completed Design20kW RFT Completed Design

20kw RFT Completed Design20kw RFT Completed Design

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

SWT 20 kwPrototype onTest rig.

(Watch movie &Take break)

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

Next Steps for Small Wind Turbines, LLC

1. Find a MN factory / partner to build generators2. Sell generators to other wind turbine companies3. Partner with other turbine companies4. Develop better blade technologies5. Develop better controllers / inverters6. Develop better towers7. Partner with Utility Companies8. Partner with Communication Companies9. Roll out to other countries

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)

Small Wind Market Assessment

1.3

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.

TO $4,500

FROM $7,000

1.4

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

4.3

• 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 = $45M10,000 20kW units @ $5,000= $50M500 40kW units @ $13,000 = $32.5M

100 100kW units @ $25,000 = $12.5M Total generator sales = $140M20% market share by GMI-GEN= $28M

Distributed Energy Systems (DES)

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

        Small wind energy        PV        Biomass        Hydrogen         Electricity storage

Technology Integration

3.1

Integrate complementary renewable energy technology solutions in order to leverage strengths and weaknesses and reduce the risk of intermittency.

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

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

• 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.

4.4

Sector sales projections:Installation on 150 wind fields = 3,600 50kW units, 2012-20153,600 @ $13,000 = $46.8M (generators only)20% market share by GMI-GEN = $9.36M

Existing Wind Fields

4.5

• 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, 2012-20152000 50kW units @$13,000 = $26M2000 100kW units @ $25,000 = $50M

Total generator sales = $76M20% market share by GMI-GEN = $15.2M

Irrigation Systems

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.

4.6

Sector sales projections: 40 installations in 2012-2015, 2400 turbines800 50kW units @ $13,000 = $10.4M1600 100kW units @ $25,000 = $40MTotal generator sales = $50.4M20% market share by GMI-GEN = $10.1M

• 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

4.7

Sector sales projections:80 project installations, 2012-20151600 100kW units @ $25,000 = $40M20% market share by GMI-GEN = $10M

Remote Operations

• Utilities must address mandated RES through aggressive renewable energy development.• Utilities must mitigate for the lack of transmission infrastructure and the difficulty in building and operating additional conventional power plants.• Scenario: 100 100kW turbine systems with complementary PF and storage could provide over 10MW capacity producing in excess of 2,000,000 kWh/year.

4.8

Sector sales projections:

30 projects, 2012-2015 3000 100kW generators @ $25,000 = $75M 20% market share by GMI-GEN = $15M

Regional Electric Utilities

• Wind power can be utilized in a DE scenario to produce hydrogen to fuel internal combustion generators or fuel cells providing energy storage. (University of Minnesota)• Wind power can be utilized in a DE scenario to produce anhydrous ammonia to convert into nitrogen–based fertilizer supporting rural agriculture.

4.9

Sector sales projections: 100 projects, 2012-201520 100kW wind turbines systems each2000 100kW generators @ $25,000 = $50M20% market share by GMI-GEN = $10M

Hydrogen/Anhydrous Ammonia Production

HOW MANY JOBS CREATED?

• Factory at $50,000,000/yr

= 300 employees• Site Assessors• Project Planners• Grant Writers• Financiers

• Excavators• Electricians• Tower Installers• Crane Operators• Turbine installers• Service Crews• Clerical

Next Steps for Small Wind Turbines, LLC

1. Find a MN factory / partner to build generators2. Sell generators to other wind turbine companies3. Partner with other turbine companies4. Develop better blade technologies5. Develop better controllers / inverters6. Develop better towers7. Partner with Utility Companies8. Partner with Communication Companies9. Roll out to other countries

1. Sell to World Markets (Mfgs of Generators, etc)

• Sublicense exclusive manufacturing and distribution rights of the GMI Gen to related businesses in various world markets.• Each licensee establishes and implements GMI-GEN manufacturing and marketing plan for successful penetration of their respective market.• SWT establishes implements GMI-GEN marketing and sales plan for entire USA market and respective sales prospects.• Licensees and SWT collaborate on specialized market sectors development (related technologies).• Licensees and SWT collaborate in developing and marketing small wind turbine systems around the world.

Bigger Business Plan

6.1

The SWT / GMI Technology as superior to all other generators in the small wind industry; lighter, more efficient, less moving parts and costs less.

Recognize the experience and expertise that SWT, LLC has in renewable energy technology, the development and sales and marketing of small wind turbines, the capacity to assess and commercialize emerging technology and a strong management team.

Help SWT in the development of a strategic collaborative partnership between MN stakeholders in order to commercialize the GMI-GEN, develop and commercialize a state-of-the-art generator factory, small wind turbine system, develop new markets sectors to facilitate sales, and continue to assess emerging technology that can support renewable energy.

Collaborate with many stakeholders in order to sustain market growth and economic growth creating quality jobs in MN and elsewhere.

Summary

7.1

SMALL WIND TURBINE, LLC