American Superconductor Corp (AMSC)

[jmhollen]

U.S. Department of Energy Announces $117 Million Program to Accelerate Demonstration of High Temperature Superconductor Power Products

WESTBOROUGH, Mass.--(BUSINESS WIRE)--Sept. 26, 2001--
American Superconductor (Nasdaq:AMSC, news, msgs) Expects to Participate in


Multiple Projects

Next Superconducting Power Cable to be Installed on Long Island

The U.S. Department of Energy (DOE) announced on 24 September 2001 the next round of projects it has selected to fund under the auspices of its superconductivity partnership initiative (SPI) (see http://www.energy.gov/HQPress/releases01/seppr/pr01161.htm). The DOE selected seven projects from a large list of proposals for the demonstration of high temperature superconducting (HTS) power applications. Power applications to be demonstrated under the SPI include electrical generators, power cables, transformers and magnetic separators for mineral and chemical processing.

"This work will help provide solutions to power quality and electric reliability problems, bringing the benefits of superconductivity more quickly to the U.S. electrical industry and the American people," said Energy Secretary Abraham in the DOE announcement.

The total investment in the seven projects over the next three to four years is expected to be $117 million, with approximately $57 million coming from the DOE and the balance from the industry participants. This investment is intended to advance the commercialization of HTS technology in electric power applications across the power infrastructure, including production, delivery and use of power.

"There is growing market momentum for HTS technology in the power infrastructure," said Greg Yurek, chief executive officer of American Superconductor. "Utilities are turning to HTS technology as part of their investment strategy for meeting their future power transmission requirements. The SPI program is important because it hastens the development and commercialization of HTS technology in key utility applications."

HTS Power Cable for Long Island Grid

A team led by Pirelli Power Cables & Systems was selected by the DOE-SPI to demonstrate an HTS cable in the power grid of Long Island Power Authority (LIPA) on Long Island, New York. American Superconductor is the HTS wire supplier and a partner with Pirelli on this project. The other partners are LIPA, the Electric Power Research Institute (EPRI) and Air Liquide. The cable system will be based on a co-axial (cold dielectric) design and will deliver 77 MW of power over approximately one-half mile in LIPA's power transmission grid near East Shoreham on Long Island.

The Long Island HTS power cable project is a Phase III, pre-commercial SPI program and builds on previous HTS power cable projects including one under way in Detroit with Detroit Edison. The Detroit demonstration consists of three, single-core (warm dielectric) cables each approximately 400 feet in length, which are located in a substation in downtown Detroit. The Long Island cable project, involving three HTS cables each about one-half mile long, will be the longest HTS cable installation to date. The cables will be installed in a section of the LIPA transmission grid between two substations. This represents a key step towards the commercialization of HTS underground power cables. The project funding totals approximately $18 million with half of that coming from the DOE.

In addition to single-core (warm dielectric) HTS cables, Pirelli has already manufactured 150-foot-long co-axial (cold dielectric) HTS cables that are expected to be operated at utility test facilities in France next year. The Long Island pre-commercial cable will build on this experience.

Detroit Progress Report

Pirelli installed three HTS cables in the Frisbie Substation in Detroit this past summer, matching the power carried by nine copper cables that had been in the same right of way. This HTS cable system includes a splice constructed in a manhole, a key component in the demonstration of practical applications of HTS cables. The HTS cable system is expected to be serving 14,000 Detroit Edison customers this fall.

AMSC First Generation HTS Wire

Five of the seven winning projects, including the Long Island cable, involve the use of first generation HTS wire. American Superconductor, which produces the highest performance, lowest cost HTS wire in the world, expects it will be providing HTS wire to several of the projects. Two of the projects intend to use other forms of HTS material, including solid forms for bearings and melt-processed wire for an MRI application. Final contracts between the DOE and the prime contractors still need to be negotiated after which suppliers of the HTS wire will be chosen. It is expected that contracts will be underway in the first quarter of calendar 2002.

About American Superconductor

American Superconductor Corporation is a world leader in developing technologies and manufacturing products utilizing superconductor wire and solid-state power electronic switches for the electric power infrastructure. American Superconductor's products, and those sold by electrical equipment manufacturers that incorporate its products, can dramatically increase the bandwidth and reliability of power delivery grids, reduce manufacturing and operating costs, and conserve resources used to produce electric power. Founded in 1987, the company is headquartered in Westborough, Mass. For more information, visit http://www.amsuper.com.

Certain statements in this release, 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 the uncertainties that: the company will be able to obtain the anticipated funding from corporate and government contracts; the company will be able to successfully develop and manufacture commercial products; a robust market will develop for the company's products; and the company will secure anticipated orders. Additionally such factors include: 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; the competition encountered by the company, including several large Japanese companies; the amount and timing of the company's future cash requirements and the availability of satisfactory financing sources. 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 periodic reports filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's estimates as of September 26, 2001. While the Company anticipates that subsequent events and developments may cause the Company's estimates 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 estimates or views as of any date subsequent to September 26, 2001.



CONTACT: American Superconductor
Jeff Nestel-Patt 508-621-4375
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Investor Contact: Stan Piekos 508-621-4220
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