American Superconductor And Siemens Form Strategic Alliance To Develop And Commercialize Advanced Grid Reliability Technology

'Fault Current Limiters' to Rely on Second Generation Superconductor Wire to Improve Performance and Decrease Costs for New Power Grid Reliability Solution

WESTBOROUGH, Mass. and ERLANGEN, Germany, Feb. 8 /PRNewswire-FirstCall/ -- American Superconductor Corporation (Nasdaq: AMSC), a leading electricity solutions company, and the Corporate Technology unit of Siemens AG (NYSE: SI), a global power systems company, today announced the two firms have formed a strategic alliance to develop and explore the commercialization aspects of high temperature superconductor (HTS) fault current limiters by building and testing FCL components based on AMSC's second generation (2G) HTS wire. Fault current limiters (FCLs) are expected to serve as high-voltage surge protectors for power grids.

Prior to establishing this alliance, Siemens and AMSC, in close contact with electric utilities across Europe, Canada and the U.S., defined specific customer needs that meet their performance and economic requirements for today's complex power networks. Based on their input, the companies jointly crafted a roadmap to demonstrate FCLs based on AMSC's 2G HTS wire and Siemens' fault current limiter design.

Siemens and AMSC have been involved in developing fault current limiters since the beginning of the 1990s, utilizing different configurations of available HTS materials. This alliance allows both companies to capitalize on their earlier work and proprietary technologies to conceive of practical FCLs that are based on the advanced 2G HTS wire expected to be coming available in commercial quantities over the next couple of years.

Under the terms of their agreement, Siemens will develop performance requirements for its FCL design and AMSC will tailor its standard 2G HTS wire to meet those specifications. The first deliveries of 2G HTS wire to Siemens are expected to be made from AMSC's pre-pilot manufacturing line in 2005. (To learn more about 2G HTS wire and AMSC's plans for scaling up production of 2G HTS wire, please see http://www.amsuper.com/products/htsWire/2GWireTechnology.cfm )

FCL Applications

When a short circuit occurs in an electrical transmission or distribution system, an electrical generator feeding power into that system responds by creating a surge of current throughout the grid. Unless circuit breakers open up to stop this surge (technically, a "fault current"), it can damage expensive equipment, such as transformers, located in electrical substations and elsewhere on the grid. As grids around the world grow, the current level in the surges grows, increasing the need for utilities to upgrade breakers or consider other solutions such as FCLs that protect the grid. Worldwide, the resulting cost to electric utilities amounts to hundreds of millions of dollars each year, according to the U.S. Department of Energy.

A fault current limiter (also called a fault current controller) uses superconductors to instantaneously limit electrical surges -- or reduce them to more normal levels -- before they reach a circuit breaker. (Fault current limiters based on conventional electrical conductors do not exist. Only superconductors possess the unique physical properties that allow them to react instantaneously to current changes, passing electricity along at normal levels while dampening the surges.)

To learn more about FCLs please see http://www.amsuper.com/products/htsWire/FaultCurrentLimiters.cfm and http://www.electricity.doe.gov/ .

To learn more about Siemens' activities on superconducting components and equipment please see http://www.industry.siemens.com/marine/EN/products_systems/innovations.htm and http://www.siemens.com/index.jsp?sdc_p=cd1034230flmn1031937o1067086ps4u&sdc_si d=14017264143& .

About Siemens Corporate Technology

In the fiscal year 2003/2004, Siemens invested 5.1 billion euro in research and development -- which amounts to more than 23 million euro per work day. Worldwide, approximately more than 45,000 researchers and developers work on the newest technologies. With 48,000 current patents, the company is a world leader. Within the corporate department, Corporate Technology (CT), over 1,700 employees work worldwide on key and profile technologies that have a significant role in managerial areas. In addition, CT is responsible within Siemens for global patent management, environmental protection and work with international standardization bodies as well as for the Corporate Information Research Center. Further information about CT is available on the Internet at http://www.siemens.com/corporate-technology.

About American Superconductor

AMSC is the world's principal vendor of high temperature superconductor (HTS) wire and large rotating superconductor machinery, and it is a world- leading supplier of dynamic reactive power grid stabilization products. AMSC's HTS wire and power electronic converters are at the core of a broad range of new electricity transmission and distribution, transportation, medical and industrial processing applications, including dynamic reactive power grid stabilization solutions, large ship propulsion motors and generators, smart, controllable, superconductor power cables and advanced defense systems. The Company's products are supported by hundreds of patents and licenses covering technologies fundamental to Revolutionizing the Way the World Uses Electricity(TM). More information is available at http://www.amsuper.com.

American Superconductor and design, AMSC, POWERED BY AMSC, Revolutionizing the Way the World Uses Electricity, PQ-IVR and SuperMachines are trademarks and D-VAR and SuperVAR are registered trademarks of American Superconductor Corporation. All other trademarks are the property of their respective owners.

Any statements in this release about future expectations, plans and prospects for the Company, including statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include: uncertainties regarding the Company's ability to obtain anticipated funding from corporate and government contracts, to successfully develop, manufacture and market commercial products, and to secure anticipated orders; the risk that a robust market may not develop for the Company's products; the risk that strategic alliances and other contracts may be terminated; the risk that certain technologies utilized by the Company will infringe intellectual property rights of others; and the competition encountered by the Company, including several large Japanese companies. Reference is made to these and other factors discussed in the "Management's Discussion and Analysis of Financial Condition and Results of Operation" section of the Company's most recent quarterly or annual report filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's views as of the date of this release. While the Company anticipates that subsequent events and developments may cause the Company's views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date this press release is issued.

SOURCE: American Superconductor Corporation