World's First Commercial High Temperature Superconductor Power Grid Product Enters Manufacturing Phase at American Superconductor


Developed by American Superconductor in collaboration with Tennessee Valley Authority, SuperVAR® Grid Stabilization Product Now Available for Utility, Wind Farm and Industrial Applications

WESTBOROUGH, Mass., Jan. 30 / -- American Superconductor Corporation (NASDAQ:AMSC), a leading electricity solutions company, and the Tennessee Valley Authority (TVA), the nation's largest public power provider, today announced the start of production of two SuperVAR® dynamic synchronous condensers. AMSC's SuperVAR dynamic synchronous condenser is a new product that stabilizes grid voltages, increases service reliability, and can help maximize transmission capacity. These two SuperVAR systems are expected to be the world's first commercial high temperature superconductor product to be utilized on the grid. AMSC expects to ship the first of the two SuperVAR machines in late 2006, with the second system to be shipped in early 2007. TVA retains an option to purchase three additional SuperVAR machines.

The two SuperVAR systems purchased by TVA will each be rated at 12 megaVAR (MVAR) -- 4MVAR higher than the advanced prototype. The 33% higher reactive power rating was selected to provide a more powerful, more broadly applicable grid solution. The skid-mounted system is about the size of a container ship cargo box and is able to fit readily into electrical substations.

"In today's digital economy, keeping voltage levels constant and stable is vital," said Terry Boston, TVA Executive Vice President of Power System Operations. "That's what our customers expect, and we believe that's what this new product will help us deliver. We believe SuperVAR machines will help protect the transmission system from voltage fluctuations and help ensure TVA's continued delivery of affordable, reliable power to the people of the Tennessee Valley."

The release to production of the 12MVAR machines follows the rigorous, accelerated life test of AMSC's advanced prototype SuperVAR synchronous condenser at a TVA electrical substation serving a steel mill operated by the Hoeganaes Corporation in Gallatin, Tennessee. Since it was first synchronized with the TVA grid in January 2005, the advanced prototype SuperVAR synchronous condenser has operated successfully through well over five million voltage sags and surges (2,300 steel mill melt cycles).

"This initiation of commercial production of SuperVAR synchronous condensers is particularly timely," said Greg Yurek, CEO of American Superconductor, "because the recently passed Energy Policy Act of 2005 highlights the need for increased investment in the reliability and modernization of the nation's transmission grid, including mandatory reliability standards. AMSC's SuperVAR system provides the kind of advanced technology solution that will help utilities meet the new reliability standards. In combination with our D-VAR®, PQ-IVR(TM), and DVC(TM) products, AMSC is now one of the few companies in the world to have a complete offering of products and solutions for large-scale power reliability issues."

SuperVAR machines serve as "shock absorbers" for the grid, dynamically injecting or absorbing reactive power (measured in volt-amperes-reactive or VARs) to minimize sudden and large voltage fluctuations. Voltage regulation is critical to the success of a variety of industries that require reliable as well as very high quality electric power; for industrial usage it helps to keep equipment running at high production rates preventing the shutdown of sensitive electronic manufacturing equipment; for utilities it can help to stabilize the grid, and for wind farms it provides the ability to ride through high voltage situations as well as provide the dynamic voltage regulation and control required to meet the interconnection standards.

Developed by American Superconductor in collaboration with TVA, SuperVAR machines help improve the reliability and quality of electric power provided by utilities. According to industry experts, the global addressable market for FACTS (Flexible AC Transmission System) devices, of which the SuperVAR machine is a part, is approximately $170 million per year. The SuperVAR machine was recently selected by the editors of IEEE Spectrum as one of the "Best Technology Projects of 2006." Visit www.spectrum.ieee.org/jan06/2604 for more information. It was also selected by R&D magazine on October 20, 2005, as one of the top 100 R&D projects in the world.

To learn more about AMSC's SuperVAR machine, please visit: http://amsuper.com/products/motorsGenerators/quickVAR.cfm

About Tennessee Valley Authority (TVA)

TVA is the nation's largest public power provider and is completely self- financed. TVA provides power to large industries and 158 power distributors that serve approximately 8.6 million consumers in seven southeastern states. More information is available at http://www.tva.gov/.

About American Superconductor Corporation (NASDAQ:AMSC)

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 www.amsuper.com.

Source: American Superconductor Corporation

CONTACT: Lisa-Marie Barker, +1-508-621-4375, lbarker@amsuper.com;
Investors: Kevin Bisson, +1-508-621-4220, investor@amsuper.com, both of American Superconductor or Myra Ireland of TVA, +1-423-751-7153, mhireland@tva.gov, for American Superconductor

Web site: www.spectrum.ieee.org/jan06/2604
http://amsuper.com/products/motorsGenerators/quickVAR.cfm
http://www.tva.gov/
http://www.amsuper.com/

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