Bruce Hermansen

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Clipper Windpower Insight for Suppliers
Bruce Hermansen Lead Buyer, Major
Components Clipper Windpower, Inc.
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Agenda

• Wind Energy Growth
• Clipper Windpower
• Liberty Technology
• Manufacturing and Quality
• Expectations for Supply Chain Partners
• Key Contacts
• Summary

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Wind EnergyA Growing Industry
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Wind Power Market

• Wind power market
• The international wind markets grew by 32 in
  2006.
• In 2006 alone, 15.2 GW were installed worldwide,
  bringing the total up to 74.2 GW.
• 2006 US Installations over 11,600 MW
• The total value of new generating equipment
  installed in 2006 reaching 18 billion, or US23
  billion
• Wind turbine market
• Expected cumulative value of 38 billion from
  2004 to 2008

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Wind Energy Capacity has been expanding rapidly
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while the cost of Wind Energy has declined
Cost of Wind-Generated Energy in Levelized
Cents/kWh
80 Price Reduction in 20 Years!
Assumptions levelized cost at excellent wind
sites, large project size, not including PTC
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Clipper Windpower
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Clipperwhats in a name?

American Clipper ships (1845 to 1855), were
renowned for their performance when compared to
the British cargo sailing ships of the era. The
Clipper was far faster then anything afloat,
could regularly make 20 knots Clipper ships
were the first large sailing ship to cross 400
miles of ocean in a single day, resulting in
premium freight revenues for Clipper ships.
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Clipper Overview

• Formed in 2000
• Headquarters
• Carpinteria, California, USA
• London, United Kingdom (Europe)
• Wind Turbine Assembly Cedar Rapids, Iowa, USA
• Publicly traded on the London AIM market
• Liberty 2.5 MW turbine series
• C-89
• C-93
• C-96
• C-99

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Our History

• 2001 Clipper Windpower Technology - Awarded
  13MM in grants from US Department of Energy
  (DOE) and the California Energy Commission to
  develop a state-of-the-art, multiple generator
  wind turbine drive train, D-GEN
• 2001 Clipper Windpower Development
• 44 MW Flying Cloud Project in 2003 w/3rd party
  WTGs
• 160 MW Intrepid in 2004 w/3rd party WTGs
• 6000 MW Project Pipeline
• 2003 Developed the Liberty 2.5 MW series wind
  turbine under the 8.9MM DOE Low Wind Speed
  Turbine program in partnership with DOE/NREL
• 2005 The Clipper Liberty 2.5 MW C-93 wind
  turbine becomes operational in Medicine Bow, WY.
  Clipper Windpower becomes a publicly traded
  company on the London Stock Exchange AIM market.

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Experienced Leadership
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Clipper Windpower Strategy

• Manufacturing of LibertyTM 2.5 MW wind turbine
  for sale to 3rd party developers and project
  owners
• RD expands technology advantage
• Project development increases portfolio
  facilitating deployment of the LibertyTM 2.5 MW
  turbine
• Investment/ownership in projects provides base
  for recurring revenue

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2006 Highlights

• Wind turbine sales agreements for deliveries
  through 2011, with 1,079 MW in firm turbine sale
  commitments, approximately 2,500 MW in contingent
  orders
• Joint development / contingent sale agreements
  for over 2,000 MW of early stage projects which
  would deploy Clipper turbines
• Manufacturing completion of first eight Liberty
  2.5 MW wind turbines.
• Increased floor space to over 215,000 square feet
  at Cedar Rapids assembly plant, increasing the
  plants capacity to over 400 wind turbines per
  year.
• Raised 85.0 million in a successful share
  placing to finance the turnkey construction of
  the Endeavor project and future strategic
  initiatives.

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Continued Intellectual Property Development

• In 2006, Clipper continued to strengthen its
  intellectual property portfolio, adding four new
  U.S. patents, bringing the total to eleven.
• Variable Speed Wind Turbine Technology, an
  advanced method for achieving variable speed
  operation that contributes to the superior
  performance of the Liberty turbines.
• Distributed Drive Train, adding to the patent
  framework of the distributed drive-train
  technology that Clipper has developed to achieve
  lower cost and high reliability.
• Distributed Static VAR Compensation, complements
  the Variable Speed patent method of achieving
  voltage stability and power factor correction
  needed for large wind farm deployments.

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Our Financial Strength

• Raised over 100 million on AIM September 2005
• Additional 85 million raised during secondary
  offering on AIM Fall 2006
• Current market capitalization is over 1 billion
• Over 200 million of cash on hand as of December
  31, 2006
• Profitable sales and cost management will
  continue to build financial strength
• Conditional assignment of vendor warranties

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Clippers Future Strength

• Clipper has a turbine that works and is in demand
  in a strong market
• Clipper assembles parts made by known, qualified
  and experienced suppliers.
• Sales contracts provide security of payment to
  cover costs
• Market capitalization and ability to borrow
  remain strong in a market bullish on our industry
  and company.

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Clipper TechnologyEvolution of Industry Standard
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Liberty 2.5 MW Series Wind Turbine

• General Specifications
• 3 Blade Horizontal Axis
• Upwind
• Variable Speed
• Individual pitch
• Active Yaw
• 75 to 80 m Hub Height
• Swept Area 6,793 m2

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Low Cost of Energy by Design

• Design out the legacy points of failure
• Reduce unscheduled maintenance and lost
  production
• Design for ease of maintenance
• Reduce the need for large, expensive mobile crane
• Key Components
• Power Conversion
• Gearbox
• Generator

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Electrical Architecture

• Variable Speed Constant Frequency operation
• Required for MW size turbines
• Electronically control torque loads
• Allow larger rotor for given drive train and its
  cost

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Electrical Architecture

• Permanent Magnet Generator
• No slip rings, couplings or brushes
• Air cooled operates more than 40 C below
  insulation specification
• Very compact 3.5' x 3.0'
• Does not require coupling between the gearbox and
  the generators because of low short-circuit
  current
• Higher efficiencies in all operational loads than
  commercial doubly fed or wound field synchronous
• Totally enclosed TEWAC, for contamination
  applications
• An IP54 air-cooled option for less demanding
  application
• Low weight on-board gantry crane

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Gearbox Architecture

• Purpose designed for wind turbine configuration
• Versus modifications of speed reduction gearboxes
• Distributed load path gearbox design
• Split load path to reduce strain on gears
• Multiple load paths multiple out put paths
• Simpler design
• Input is a single gear, not need planetary gear
  configuration

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Gearbox Architecture

• Distributed load path configuration
• Secondary benefit
• Multiple output paths
• Allows multiple smaller generators
• Potential generator replacement without the lead
  time delay and cost of the external crane
• Reduced maintenance costs
• Improved Return and certainty

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Designed for Ease of Maintenance and
Serviceability

• C-93 designed for ease of assembly, installation
  and maintenance
• Service Lift for up-tower access
• Full head-room and walk-around
• 2 ton jib crane services
• Brakes
• Generators
• Pinion cartridges
• Yaw motors
• Hydraulics and cooling systems
• Hub access through nacelle ports

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Design For Service

• Rotor hub access
• Technicians climb inside versus outside the hub
• Inside access likely results in more and better
  attention to hub
• Pitch bearings
• Pitch gears and motor actuators
• Electrical controls and energy storage systems
• Better maintenance likely results in less cost
  and more Return

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Predictive Maintenance

• Sensors and data recording required
• Vibration
• Oil particle count
• Accelerometer
• Temperature
• Electrical parameters
• Data recording
• Analysis for prediction of maintenance
  requirements
• Basic trend monitoring and alarm functions
• More to learn, upside potential
• Visual inspection ports for gears picture worth
  thousand words

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Manufacturing
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Cedar Rapids, Iowa Manufacturing Plant

• Plant Manager Bob Loyd PE
• 32 years of heavy equipment manufacturing
  experience
• Facility
• 215,000 square feet of working space
• Capacity of over 400 units per year
• Location central to major road and rail services
• Significant investments made to ensure state of
  the art operations
• On-Site Manufacturing Engineering Team
• On-Site Planning and Production Coordination
• Service Parts Support

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Quality Strategy

• Certify suppliers and require inspection
  documentation
• Provide full time Quality Engineers at key
  suppliers factories
• Audit suppliers deliveries vs. 100 receiving
  inspection
• Maintain ISO certification
• Utilize Lean/Six Sigma approach
• Extensive lot and serial control documentation
• Extensive turbine system testing program priorto
  shipment
• Employee activity sign-off and accountability

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Sourcing Strategy

• Global sourcing perspective
• Domestic USA
• International
• In House Make
• Multiple sources
• Optimize competition
• Minimize risk
• Framework Contracts
• Develop long term partnerships
• Share the risk accountability
• Warranty and spare part commitments
• Sourcing with Stakeholder buy-in from
• Quality Group
• Engineering
• Manufacturing
• Quality Product on time Delivery a given

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Expectations for our Supply Chain partners
Meeting Clipper Windpower ( our customers)
requirements
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We strive to build long-term partnerships
High Performing Suppliers

• Partner - Long-term Framework Contract
• Exceeds requirements in Quality, Cost, Delivery,
  Responsiveness
• Proven record of Value Improvement
• Provides innovation and technology support
• Provides full-time site support as required

• Bid - Competitive Quote, Limited Order Duration
• Achieves required Quality, Cost, Delivery,
  Responsiveness
• Manages scope change without cost creep
• Provides on site support for delivery problems

• Exit - No New Business
• Fails to achieve QCDR requirements
• High level of cost creep post contract
• Exit if no performance improvement

Poor Performing Suppliers
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Quality, Cost reduction, Technology..

• No undeclared Quality defects,
• Drive should be 100 to spec fit-for-purpose
• If defects are found they should be captured at
  the Suppliers facility i.e. zero escapes.
• For any Quality Concessions submitted Root cause
  of non-compliance must be carried out to ensure
  effective close out
• NO repeats
• Cost Reduction
• Continuous review of internal processes to reduce
  waste
• Suggestions to lower cost of manufacturing
• Elimination of non-value added tasks
• Technology
• Constantly staying at the forefront of your core
  competencies
• Ability to evolve
• Alignment with Clippers supply chain design
  requirements

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Delivery lead time are critical success factors

• On-time Delivery
• Late Delivery Unhappy Customers
• Delivery Performance must improve
• Engineering changes impact schedules
• Steel crisis having impact, must be managed
• Effective capacity planning and production
• Right quantity, right time, right quality
• Lead Time
• Continuous reduction of supply time
• Speed of delivery wins projects
• Accurate Current Lead Times are Essential
• A Commitment is a commitmentstand by it!

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Clippers Commitment to Suppliers

• Delivery
• Improved scheduling and forecasting
• Quality
• Clear specifications
• Achievable specifications
• Cost Reduction
• Effective evaluation implementation of supplier
  cost reduction ideas
• Continuous feedback
• Technology
• Prompt Communication of future needs

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Key Contacts
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Supply Chain Management Organization
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In Summary
Wind Energys growth requires strong, committed
suppliers Clippers commercial performance and
technology offer suppliers confidence in our
financial and future strength Agility and
pre-emptive actions are needed to support an
increasingly demanding marketplace Delivery
delays and undeclared quality defects are
unacceptable
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Questions?