Markus Bayegan. R&D at ABB. Chief Technology Officer ABB. ABB Group Nov 04

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1 Markus Bayegan Chief Technology Officer ABB R&D at ABB ABB Group - 1 -

2 R&D pipeline produces outstanding results Recent technology success stories Industrial IT Automation System 800xA Improvements for industrial processes (e.g. steel, paper) New features for motors, drives and soft-starters Upgrades in flexible AC transmission systems (FACTS) Wide area grid management to stabilize power transmission Augmented reality to improve robot programming ABB Group - 2 -

3 Technology a major asset for ABB Cutting-edge technology gives our core power and automation business a distinct advantage over our competition ABB Group - 3 -

4 ABB Group R&D driving forces at ABB Towards optimized power infrastructure and reliable grids Reliable and robust products and systems Functional integration, fewer parts Safe and environmentally friendly Easy to engineer, install, operate, maintain Remote monitoring, diagnosis, support Optimum asset utilization Towards optimized manufacturing and customer processes

5 Mission of industrial R&D Link between customer needs and technology offerings Dynamic and vital source for technology based innovation Spearhead for technological breakthroughs in relevant areas Connected to scientific community Monitoring most recent developments in science and technology world Attractive recruiting agent for high calibre technical personnel ABB Group - 5 -

6 R&D priorities Create more value through technology Be responsive to external world Build partnerships with customers and universities ABB Group - 6 -

7 Key technologies Power electronics Electrical insulation Communication ABB Group - 7 -

8 Key technologies (2) Sensors and actuators Control and optimization Software development ABB Group - 8 -

9 Cutting-edge technologies Current research programs ABB Group Securing and developing ABB s core competence Power device technology Power transmission and distribution applications Power electronics Mechatronics and robotics application Control and optimization Automation networks and devices Software architecture and processes Advanced material Manufacturing technologies

10 Power device technologies Electrical insulation Improved polymer with embedded field control Improved electric field configuration for compact products 245 kv plug to gas insulated switchgear Dry insulation, maintenance free Arresters Polymeric housing for high mechanical stress PASS M00 Most compact MV SF6 breaker ABB Group

11 Power device technologies (2) ABB Group Current interruption Broad implementation of self-blast technology One technology platform for various breaker applications Motor drives platform for contact movement HECS generator breaker 10 percent more power 20 percent lower volume 12 percent lower weight LTB 170 kv New motor drive with less moving parts ELK kv Very compact with new breaker

12 Power device technologies (3) Improving material properties Thin metallized polypropylene films with self-healing insulation after breakthrough in capacitors Oil-filled Dry Fast curing epoxy resins to cut down production time ABB Group Housing material for transformers: first combined flame retardant and shock resistant Distribution transformer with cycle time reduced by 80 percent

13 Power electronics Converter technologies Topologies and control Semiconductor utilization Hardware integration Semiconductor packaging Cooling technologies Electrical interference Simulation methodology Electrical machines Power converters ABB Drives product family IGBT platform (chip design, packaging, process development) ABB Group HVDC Light (series connection of IGBTs, control algorithms)

14 Power transmission and distribution applications Monitoring transmission flows in large grids Optimizing electrical transmission Maximizing use of installed grids Ensuring secure operation at maximum load Minimizing transmission losses Connecting grids with different operational parameters Coupling various power generation sources to grid Providing environmentally friendly transmission and distribution Advanced technologies for better control of transmission flows and voltages ABB Group

15 Ensuring reliable power supply GPS Signal Wide Area Monitoring and Control CH F A + SL FACTS P FACTS P P FACTS (Flexible AC transmission systems) for network control I HVDC and HVDC Light ~ = Innovations enhance network flexibility for better stability and reliability ABB Group = ~

16 FACTS: helping to prevent blackouts ABB Group Maximum available power supply Maximum power quality Minimum transmission losses Minimum investment cost Minimum environmental impact

17 Mechatronics and robot applications New concepts for mechanical structures Easier robot programming Knowledge-based application programs New mechanical arm for heavy-duty pre-machining operations IRB 940 Tricept TeachSaver: offline programming of robot foundry cleaning ABB Group ArtVis: augmented reality for robot programming VirtualArc for tuning of process parameters

18 Augmented reality: making the complex simple Operator sees program input overlaid on object that is being worked on Huge potential for engineering applications Makes programming easier ABB Group

19 Control and optimization 800xA platform for system integration Optimization in industry lines Oil and Gas: enhanced oil production well monitoring Metals: advanced process control for hot/cold rolling mills Power generation: boiler control Pulp and paper: online mill performance Cement: production more economic ABB Group

20 Automation networks and devices Networks Enabling digital field Industrial ethernet Safety, security and reliability Wireless communication Sensors and actuators Mobile asset management Wireless robots Intelligent devices Advanced signal processing ABB Group Diagnostics Plug and operate

21 Software architecture and processes Software quality Efficient technology migration Security and integrity assurance Software development process Capability maturity model-based improvement (CMMI) Automated testing Reduction of system installation time by 75 percent ABB Group Plug and operate of field devices reduces commissioning time by 50 percent

22 Monitoring material technology (nano) Nano-composites for electrical insulation Thin films for electrical contacts Nano-tubes for electrical conduction Coatings and surface treatments Conductive composites for indicators Transparent conductive nano-layer inside liquid crystal display ABB Group No voltage 2 kv voltage 3 kv voltage

23 Boosting productivity in our own factories Improved processes to serve customers better ABB Group Sweden Time from order to delivery reduced from 60 to 15 days Poland Manufacturing lead time reduced from 110 to 14 days Czech Rep. Offer and order handling reduced from days to minutes Switzerland Reduction of inventories by 30 percent Finland Time to market reduced by 30 percent U.S. Cycle time reduction by 50 percent Others Reduction of set-up time by 75 percent and lead time by 25 percent

24 Successful R&D needs reliable transformation process ABB Group Monitoring and analyzing Scientific progress Competitor approaches Customer needs Forecasting Technology development Market needs Strategic planning Platform development Product and system development Execution Resources Target oriented approach

25 Successful R&D needs global network Universities are incubators of future technologies Industrial research to transform science into technology platforms Product development to generate products and systems on platforms Meeting customer needs ABB Group

26 Universities: partnership for technical excellence ABB Group Massachusetts Institute of Technology U.S. Carnegie Mellon University U.S. Stanford University U.S. Cambridge University U.K. Imperial College U.K. Federal Institute of Technology CH Chalmers University SE Royal Institute of Technology SE RWTH Aachen DE Technical University Berlin DE Karlsruhe University DE Tsing Hua University CN and more than 50 other partners

27 Research close to customers and universities Global labs for power and automation technologies ABB Group Raleigh U.S. Wickliffe U.S. Västerås SE Baden CH Ladenburg DE Krakow PL Oslo NO Vaasa FI Beijing CN Shanghai CN Bangalore IN

28 Worldwide recognition for innovative power Charlotte Skourup MIT: 100 Young Innovators 2004 (augmented reality) Christian Rehtanz MIT: 100 Young Innovators 2003 (transmission systems) Alexander Fay MIT: 100 Young Innovators 2002 (Industrial IT) Uno Gäfert IEEE Dakin award 2004 (electrical insulation) Ekkehard Schade Dyke award 2004 (high current vacuum arcs) Peter Isberg Thureus award Royal Swedish Society 2004 (nanotechnology) Wall Street Journal Gold Award 2002 (wireless proximity sensor) and many more ABB Group

29 Generating value with R&D Supporting sales: depending on individual business percent of present sales based on product innovation from last 5 years Creating intellectual property: average number of annual patent applications exceeds 1,400, total patent portfolio more than16,000 Sharing knowledge: more than 150 scientific publications annually ABB Group

30 ABB Group