NEWS RELEASE

Approved - 27 January 2010

FOLLOW-ON BUSINESS INVESTMENT SPARKING NEW OPPORTUNITIES FOR APPLIED SUPERCONDUCTOR

A north east technology firm is leading the race to improve the efficiency and stability of energy distribution around the national electricity network.

And at the same time, the Superconducting Fault Current Limiter (SFCL) technology developed by Blyth-based Applied Superconductor Ltd (ASL) is also helping to reduce related carbon emissions levels.

SCFLs are currently being successfully tested and utilised by three major UK electricity network operators - Electricity North West, Scottish Power and CE Electric.

And with ever greater commercial opportunities in the offing for ASL, the company is now taking its business development plans on to the next stage with the help of a £600,000 follow-on investment package shared equally between NEL Capital, the venture capital arm of regional fund management firm NEL Fund Managers, and NorthStar Equity Investors.

The two companies made initial investments in ASL in 2007, which helped enable the development and initial launch of the SCFL technology.

ASL has since secured commercial relationships with several major players in the power distribution industry, and also has a number of further projects and collaborations in the pipeline which will also contribute to the company’s future expansion.

A further £50,000 has been invested by the ASL management team and a number of private investors.

SCFLs provide a new way for electricity distributors to manage the problems brought about when faults caused by anything from equipment failure to lightning strikes affect their systems.

By acting as both a superconductor and a resistor as circumstances require, and allowing energy flow in two directions, SCFLs provide network managers with a lower-cost and more flexible way than has traditionally been used to address these faults, thus cutting energy losses and improving network stability.

And they also provide a solution to the need to connect a growing amount of renewable energy generating equipment to the distribution network, thus contributing to the reduction of CO2 emissions.

Herbert Piereder, chief executive at ASL, says: “The UK is very much the place to be for developing this kind of technology – the Government has recognised their important role in meeting its 2020 carbon reduction targets, and the energy regulator OFGEM has put valuable measures in place to assist with their development and implementation.

“There’s now very much a race going on between the companies working in this area to realise the technology’s potential and bring a mature product to the marketplace.

“Our strong existing relationships with three of the major electricity distributors give us real credibility in a notoriously conservative market, as well as a significant advantage over many of our competitors, and we’re confident that we have the knowledge and structure to remain in the vanguard of firms working in this field over the next decade.

“Our immediate focus is very much on the UK, but the transferable nature of this technology, the overseas links of the companies with which we’re already working and the need to address the faults that occur in every electricity network would indicate that there will also be major overseas opportunities for us in the medium and long term.

“The ongoing involvement of NEL and NorthStar, allied to the firm backing we’ve received from both One North East and the New & Renewable Energy Centre (NAREC), gives us the chance to refine our technologies and reinforce our strategic market positioning, thus giving us the best possible chance of success.”

  1. Yvonne Gale, fund manager at NEL Capital, adds: “ASL has a clear vision of the commercial and environmental impact that its technology can have for its customers – it has already built up strong relationships with major power distributors and now has everything in place to make even greater progress in the next few years.”

Ian Richards, Portfolio Manager at NorthStar says: “ASL have shown great foresight in identifying an innovative solution to a serious technical problem faced by power companies, and it’s fantastic that a North East firm is leading the way in this very advanced field.  ASL will strengthen our portfolio of excellent technology companies.”

One North East Deputy Chief Executive, Malcolm Page, adds: “It is great news that this investment will help ASL take its business development plans to the next stage. The fact that this project has the backing of such major energy network operators demonstrates the importance of the product to the future of the industry.”

For more information about NEL’s investment criteria, visit www.nel.co.uk or contact Barrie Hensby on 0845 111 1850.  For more information about NorthStar Equity Investors’ investment criteria, visit www.northstarei.co.uk or contact Marion Bernard on 0191 229 2700.
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For further press information, please contact Julian Christopher at Footprint Public Relations on 07891 005034 or via julianchristopher@btinternet.com

Notes to Editors

NEL Fund Managers
NEL Capital is the venture capital division of NEL Fund Managers Ltd. NEL Fund Managers Ltd is authorised and regulated in the UK by the Financial Services Authority and is a member of the British Venture Capital Association.

NorthStar Equity Investors
NorthStar has been backing science, technology and innovation-based companies across the region with funds from ONE North East and the European Regional Development Fund:

Proof of Concept Fund (POC)
POC investments are made between £60,000 and £90,000 and take the form of a convertible loan providing capital at the critical earliest stages of business creation to stimulate the growth of young companies and new technologies.  To date more than £24m has been raised by the POC portfolio in follow on funding from a range of equity investors including angels and institutional investors.

Co-Investment Fund (CoIF)
Specialising in high growth technology investments between £100k and £1m, CoIF leads multi-million pound syndicated deals.  £43m has been invested alongside the CoIF on a deal by deal pari passu basis from a range of equity investors including angels, angel networks, corporates and global fund management companies.