American Superconductor Corporation (Nasdaq:AMSC), a leading global supplier of superconductor products and power electronic converters for the electric power industry, today introduced the D-VAR™ grid reliability solution. The D-VAR, or dynamic VAR system, is a powerful yet cost-effective way of regulating voltage levels by injecting reactive power (VARs) into the grid at precise locations where voltage problems can occur. A D-VAR system is based on AMSC’s proprietary power electronic converters used in the company’s Distributed Superconducting Magnetic Energy Storage (D-SMES) product line. The primary difference between D-VAR and D-SMES is that a D-VAR system does not contain a superconducting storage device which provides real power, measured in megawatts, to solve other power reliability problems.

Like D-SMES, D-VAR systems are mobile and can be distributed throughout a utility network to solve large-scale transmission grid reliability problems. Each unit delivers precise amounts of “reactive power”, which is measured in “VARs” to mitigate voltage stability and low-voltage problems, which can result in blackouts and brownouts in transmission grids. D-VAR systems can be customized to meet each customer’s needs through variations in the operating software and in the number of power electronic converters per unit. The amount of reactive power delivered per unit varies typically from 4 to 8 megaVARs (MVAR) continuous, with instantaneous reactive power output up to 18 MVAR per unit.

In another press release issued today, AMSC and GE Industrial Systems, a business of the General Electric Company (NYSE:GE) announced that they have sold the first D-VAR system to PacifiCorp (NYSE:SPI) for use in a wind farm application (see: http://www.amsuper.com/press/2002/pacificorp.pdf ). PacifiCorp will be using the D-VAR system to regulate voltage at its Foote Creek, Wyoming wind farm, a large wind power generation site in the Pacific Northwest. GE also noted that GE Power Systems recently entered the wind business with the formation of GE Wind Energy and that it sees wind generation as a significant growth opportunity.

“Our new D-VAR solution is a logical extension of our current grid reliability product line,” said Greg Yurek, chief executive officer of American Superconductor. “Our transmission planning team has found that solutions to transmission grid reliability problems demand customization

sometimes requiring both real and reactive power, sometimes only reactive power. The ability to distribute D-VAR and/or D-SMES systems on the power grid where power reliability problems exist, allows grid operators the flexibility they need to solve voltage problems.”

“Utilizing D-VAR or D-SMES is like giving the grid an extra lane for traffic during rush hour,” added Yurek. “Maintaining voltage at proper operating levels with distributed power solutions keeps all traffic lanes open along transmission lines, eliminating power bottlenecks and ensuring that customers get the reliable power they need in their homes, offices and factories.”

AMSC’s D-VAR system has a number of advantages over other FACTS (Flexible AC Transmission) devices including:

· A short-term overload rating of 2.3X continuous output. For example, 8 MVARs will provide 18 MVARs as needed for brief but large disturbances on the grid. No other FACTS device can provide this overload capability.

· Distributing VAR support where it is needed closer to loads. This means fewer VARs are needed to solve a transmission grid problem giving D-VAR a cost advantage over other FACTS devices that place all their VAR support in one location. And because the system is packaged in a semi-tractor trailer, customers can re-deploy them elsewhere on the grid as their network requirements change.

· Fault tolerant design. The PowerModule™ inverter array configuration allows the D-VAR system to stay on-line and operate even if an individual inverter trips offline for any reason.

· By combining real power (SMES) with reactive power (D-VAR), grid and wind farm operators and industrial users of power can customize the solution that best meets their power reliability needs. Other FACTS devices are based on reactive power only.