POWER AND ENERGY CORPORATION Dr. J. Paul Farrell President and CEO February 2012

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Executive Summary BUSINESS CASE

Replace Diesel-Electric Generators with RADIX Systems Power at 1/3rd or Less Current Cost


Market, Design, License & Support Outsource Manufacturing & Construction


Technology + Team = First-to-Market

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Management Team • J. Paul Farrell - Nuclear physicist & Founder and President of Brookhaven Technology Group; recipient of more than $8M in DOE/DOD research awards • James R. Powell - Former Head of the Reactor Systems Division at Brookhaven National Laboratory; winner of the prestigious Franklin Medal; inventor of Maglev • Philip O. Moor - Chair of American Nuclear Society President’s Committee on Small Modular Reactors and project lead on many nuclear energy initiatives, including both large & small modular reactor projects • And, established legal & business professionals with proven track records in start-up management, global product launches & corporate finance transactions All information proprietary to RADIX


RADIX is Unique Because… • Immediate Market Demand – 24/7/365 Reliable Power for OffGrid Users – Replaces High Cost Diesel Electric Power With Cost Effective Mini Modular Reactors (MMRs) – Targets: Military Bases (Domestic & Foreign) Industrial & Mining Sites Remote Communities Industry & Desalination Emerging Economies

• 21st Century Design – Affordable, Modular 10 MWe Power System – Developed from U.S. Army Study – Gen III++ SMR with Passive Safety – Factory Built & Delivered To Site – Licensable PWR Technology – Licensable All Metal UZrH Fuel with 10 Year Refuel Cycle

Immediate Market, Affordable, Safe & Licensable All information proprietary to RADIX


Why Purchase a RADIX MMR? • Drivers of Demand – Politics Of Fossil Fuel Dependence – Logistics of Fossil Fuel Delivery – Cost & Cost Stability – 24/7/365 Reliability – No Emission of CO2

• Solid Economic Business Case

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RADIX’ ’s MMR • • • • • • •

10 MWe (40MWt) IPWR Scalable & Deployable Powers approx. 10,000 to 14,000 residences Gen III+ Passive Safety & Economics Triga® UZrH1.6 - enriched 19.75% U-235 Fuel cycle 10 years Air or Water Cooled

Approx. 1.5 Acres

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Power Market Overview Net Electricity Generation by Region (trillion kilowatt hours)

• Distributed power is critical to meet global demand • Distributed systems = oil – – – –

Most expensive to operate Steep fuel premiums Significant CO2 output Counter to economic & national security objectives (N. America)

World Oil Prices (in three cases)

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(2008 dollars per barrel)


Target Markets Diesel Electric Plants • More than 350,000 diesel units globally - Power range = 1-10 MW each -

More than 32,000 MW of total capacity Used for primary or critical back-up power

RADIX Addressable Market • Initial entry - $4B/year • At Maturity (2030) = $153B globally / $90B U.S.

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Business Case Annual Ownership Costs (with 30Yr NPV) & Cost of Wholesale Power 10 MW RADIX vs. Diesel 2,000

Solid Lines (Left Axis) – Annual Plant Cost Dashed Lines (Right Axis) – Wholesale Power Price $/MWH

160 1,500 120

Diesel - $6 Start Fuel Price NPV : $1.5B



Diesel - $4 Start Fuel Price NPV: $1B

500 40



Whole Power Cost / MWH US$

Annual Plant Cost Millions US$


0 0








Year Diesel costs based on 2011 market values of $4/gal and > $6/gal in remote areas. Assumes diesel price increases 5% per year equivalent to a real year 30 price of $134 a barrel of oil. All information proprietary to RADIX


10 MW x 10 Year Cost of Operations Millions $600


A 10 MW diesel electric generator burns about 800 gallons of diesel fuel per hour (7,000,000 gallons per year)

Fuel Other


Fixed O&M Variable O&M


Capital Cost




With 10% Amortization Rate for Nuclear Fuel and Equipment


Diesel @ $4.00

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Diesel @ $6.00


RADIX Strategy Offer an MMR that is Affordable, Licensable & First-to-Market Leverage unique corporate history Provide compelling economic opportunities advantages for customers & investors Turnkey 10MW unit cost = approx $120M Focus on core competencies to assemble market participants and contract with customers Apply proven, readily licensable technology to develop and engineer MMR design

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SMR Competition Compare RADIX’ ’s Strategic Position Among SMRs • SMRs for on-grid power compete with natural gas; RADIX’ ’s MMR competes with diesel because RADIX’ ’s target market is off-grid distributed power • RADIX can outpace “Advanced” ” MMR designs • RADIX is only MMR in North America able to work with DOD • RADIX will be first to get U.S. regulatory approval – “Global Gold Standard” ”

RADIX also competes with providers of diesel, wind & solar power systems ranging from 1-10MWe

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Conclusion • Unique Business Strategy • Proven Management Team • RADIX is Market Driven – First-to-Market will Build Global Awareness & Opportunity – $150B+ Market

• Gen III++ SMR/IPWR Safety – Low Risk Due To Fast Timeline & Licensable Design

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