Case Example of Alternative Transportation Opportunities

Laboratory for Sustainable Business Sustainability Clean, Reliable On-site Energy i i – i i i l – l i l i i SAFE HARBOR STATEMENT This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to our 2008 milestones and statements regarding our growth plans. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements, including, without limitation, the risk that the anticipated synergies of the Cellex Power Products, Inc. and General Hydrogen Corp. (now amalgamated as Plug Power Canada Inc.) acquisitions are not realized; the risk that unit orders will not ship, be installed and/or convert to revenue, in whole or in part; Plug Power’s ability to develop commercially viable on-site energy products; the cost and timing of developing Plug Power’s on-site energy products; market acceptance of Plug Power’s on-site energy products; Plug Power’s ability to manufacture on-site energy products on a large-scale commercial basis; competitive factors, such as price competition and competition from other traditional and alternative energy companies; the cost and availability of components and parts for Plug Power’s on-site energy products; Plug Power’s ability to establish relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; Plug Power’s ability to protect its Intellectual Property; Plug Power’s ability to lower the cost of its on-site energy products and demonstrate their reliability; the cost of complying with current and future governmental regulations; the impact of deregulation and restructuring of the electric utility industry on demand for Plug Power’s on-site energy products; and other risks and uncertainties discussed under “Item IA—Risk Factors” in Plug Power’s annual report on Form 10-K for the fiscal year ended December 31, 2007, filed with the Securities and Exchange Commission (“SEC”) on March 17, 2008, and the reports Plug Power files from time to time with the SEC. Plug Power does not intend to and undertakes no duty to update the information contained in this communication. OVERALL EFFICIENCY FOR CONVERTING CHEMICAL ENERGY TO LIGHT ENERGY Overall efficiency = 1.6% FUEL = COAL EO = 1.00 POWER PLANT E1 = 0.35 TRANSMISSION LINES E2 = 0.90 LIGHT - E3 = 0.05 Sustainable Energy – pg. 58 COMPETING MENTAL MODELS Centralized generation with de-centralized use Generation at point of use GLOBAL PERSPECTIVE North America Focus on back-up power (power following) Protecting the Source Europe Asia Focus on Combined Heat & Power (heat following) Reducing Consumption US Government support Gas Utilities are involved with fuel cell promotion European union support Focus on Combined Heat & Power (heat following) Reducing Consumption Gas Utilities are involved with fuel cell promotion Japanese government budget for fuel cell research, development, & demonstration ($1billion from 20052007) Activities Span 3 Continents BUILDINGS ACCOUNT FOR HALF OF ALL GREENHOUSE GAS EMISSIONS % 25 ry st du In Tr an sp or ta tio n 27 % Building 48% AIA GOALS TRANSPORTATION POSSIBILITIES TECHNOLOGY YR. ONSET OF DOMINANCE (Est.) FE IMPACT % (Est.) Hybrid 2026 – 31 40 – 50 Electric Hybrid 2026 – 31 10 Light Weight 2026 – 36 15 Fuel Cells 2050 5–7 A PATH FORWARD “The most important, surprising, and happy fact to emerge from energy studies is that for the last 200 years, the world has progressively favored hydrogen atoms over carbon… The trend toward “decarbonization” is at the heart of understanding the energy system” NATIONAL HYDROGEN VISION Major Findings  Hydrogen has the potential to solve two major challenges for America: energy security and environmental emissions (pollution and greenhouse gas emissions).  Hydrogen is an energy carrier that provides a future solution for America.  The transition toward a “hydrogen economy” has already begun.  The “technology readiness” of hydrogen energy systems needs to be accelerated.  There is a “chicken-and-egg” issue regarding the development of a hydrogen economy. BARRIERS FACING THE HYDROGEN ECONOMY H2 generation • • • • • Water supply Safety perceptions CO2 emissions Regional (electrolysis) power and/or CH4 availability Costs/kW; coupling PV with electrolysis and a fuel cell triples the costs Storage • High pressure storage vessels (materials) • Low wt% H2/storage system (metal hydrides) • Cost of compression Distribution • • • • Cost of “new” delivery infrastructure Materials issues – embrittlement Pipeline availability and location Continued availability of low cost gasoline/natural gas DOE HYDROGEN ROADMAP 2000 Public Policy Framework 2010 Security Climate H2 Safety } Hydrogen Industry Segments 2030 Gasification of coal/biomass Photolytic water splitting Electrolysis using renewable and nuclear Bio-processes Nuclear thermo-chemical water splitting Pipelines Delivery On-site “distributed” facilities Trucks, rail, barges Storage Conversion Applications 2040 Public confidence in Hydrogen as an energy carrier Outreach and acceptance Reforming of natural gas Production 2020 Pressurized tanks (gases & liquids) Combustion Fuel refining Space shuttle Portable power Solid state (hydrides) Integrated central distributed networks Mature technologies for mass production Solid state (carbon, glass structures) Fuel cells Advanced combustion } Mature technologies for mass production Stationary distributed power Commercial fleets Utility systems Bus fleets Distributed CHP Government fleets Market introduction of personal vehicles Sustainable Paths to Hydrogen Renewable Energy Biomass Heat Mechanical Energy Electricity Thermolysis Conversion Electrolysis Photolysis Hydrogen Source: John Turner DOLLARS FOR MAJOR PROJECTS Projects In billion 2006 $’s Federal Highway System $418 NASA Moon Program $106 Rural Electrification and Telephone (loans) $57 Yucca Mountain $50 (projected) World War I $349 World War II $3245 MILITARY BUDGET VS. PLAN B Plan B Military Budget Basic Social Goals World Military Expenditure $975 Billion $68 Billion Earth Restoration Goals $93 Billion Total $975 Billion Total $161 Billion Plan B could be funded by 15% of the Military Budget MILITARY BUDGET VS. PLAN B BASIC SOCIAL GOALS (PLAN B) MILITARY BUDGET EARTH RESTORATION GOALS (PLAN B) Country Budget ($ billion) Goals Funding ($ billion) Goals Funding ($ billion) United States 492 Universal primary education 12 Reforesting the earth 6 Protecting topsoil on cropland 24 Russia 65 Adult literacy 4 China 56 6 United Kingdom 49 School lunch programs for 44 poorest countries Japan 45 4 Stabilizing water tables 10 France 40 Assistance to preschool children and pregnant women in 44 poorest countries Germany 30 Reproductive health and family planning 7 Restoring fisheries 13 Saudi Arabia 19 Universal basic health care India 19 Closing the condom gap Protecting biological diversity 31 Total 93 Italy 18 All Other 142 World Military Expenditure 975 Total Restoring rangelands 33 2 68 9 Putting it Together Planet Communication Learning Organization Sustainability Technology Technical Nutrients Values Procedure Technology Development Design Trust Process Development People Commitment Ownership Biological Nutrients Product New Product Development Profit Reliability Product Cost Profitability Sales TREND IN ENVIRONMENTAL BOOK PUBLISHING 1800 1,574 1600 1,606 1,495 1400 1200 1000 803 800 600 383 400 225 200 7 0 16 96 322 HOW OPTIMISTIC ARE YOU THAT THE PRISM CO2 EMISSIONS REDUCTIONS CAN BE MET? Very optimistic 13% Somewhat optimistic 29% Somewhat pessimistic 38% Very pessimistic 20% As a percentage of the total HOW OPTIMISTIC ARE YOU THAT THE PRISM CO2 EMISSIONS REDUCTIONS CAN BE MET? By Sector 0% 20% 40% Utility, energy company, and associated trades Government/regulator Non-government organization and academia Supplier and consultant 60% Limited Portfolio 8 Price of electricity likely to increase 260% by 2050 with a limited portfolio 7 Trillion kWh/yr 6 5 4 3 2 1 0 2000 2010 2020 2030 2040 2050 Coal Gas Oil Hydro Solar w/CCS w/CCS Nuclear Wind Biomass Demand with no policy Policy-induced demand reduction Full Portfolio 8 Price of electricity likely to increase 45% by 2050 with the full portfolio 7 5 4 3 Trillion kWh/yr 6 2 1 0 2000 2010 2020 2030 2040 Coal Gas Oil Hydro Solar w/CCS w/CCS Nuclear Wind Biomass 2050 Demand with no policy Policy-induced demand reduction WHY ENGAGE IN THE TRIPLE BOTTOM LINE Enterprise Sustainability Value Driven Economic Driven Increasing Environmental Sustainability Multi-Generational INDIGENOUS Human Labor (Simple Tools) HOPEFULNESS Harmony with Nature Environmental Healing Systemic Actions Over Time Human Activity Unrestrained Simple Solutions Fail Animal Labor (Complex Tools) Bold Action HOPELESSNESS & DESPAIR IGNORANCE OF CONSEQUENCES Emergence of Environmental Problems Mass Production Machines Human Activity With Limits AWARENESS/ DENIAL Environmental Deterioration Consequences Observed Bold Action • Sustainability Education Environmental Collapse • Earth Restoration Actions • Global GHG Regulations • Global Water Standards Computers • Global Diet Support