Energy Efficiency Reimagined
NASDAQ: TGEN
Spring 2018 Investor Presentation
Safe Harbor Statement
2
This presentation and accompanying documents contain “forward-looking statements” which may describe strategies, goals, outlooks or
other non-historical matters, or projected revenues, income, returns or other financial measures, that may include words such as
"believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "potential," "will," "should," "could," "likely," or "may" and
similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and
unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by
such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any
forward-looking statements.
In addition to those factors described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”,
among the factors that could cause actual results to differ materially from past and projected future results are the following:
fluctuations in demand for our products and services, competing technological developments, issues relating to research and
development, the availability of incentives, rebates, and tax benefits relating to our products and services, changes in the regulatory
environment relating to our products and services, integration of acquired business operations, and the ability to obtain financing on
favorable terms to fund existing operations and anticipated growth.
In addition to GAAP financial measures, this presentation includes certain non-GAAP financial measures, including adjusted EBITDA
which excludes certain expenses as described in the presentation. We use Adjusted EBITDA as an internal measure of business
operating performance and believe that the presentation of non-GAAP financial measures provides a meaningful perspective of the
underlying operating performance of our current business and enables investors to better understand and evaluate our historical and
prospective operating performance by eliminating items that vary from period to period without correlation to our core operating
performance and highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.
Retired President and Vice Chairman of the board of
directors of Thermo Electron Corp. (now Thermo
Fisher Scientific)
Developed Thermo’s famous ‘spinout’ strategy,
resulting in the spinout of 24 public companies from
the parent
Raised nearly $5B from 1990 – 1998 as Thermo’s
CFO for the parent company and it’s various spinout
subsidiaries
Board of Directors of the American Stock Exchange
from 1994 – 2000
Former “Member of the Corporation” of Northeastern
University
John Hatsopoulos Co-Founder,
Chairman Emeritus, and Director
3
Heat, Power, and/or Cooling that is
Advanced Modular
Cogeneration Systems
Cheaper
Industry leading efficiency
Cleaner
Lower emissions thanks to efficiency and emissions technology
More reliable
Real time monitoring enables prompt service
All of Tecogen’s equipment is powered by internal combustion
engines that use clean, abundant natural gas and is equipped with
Tecogen’s patented Ultera emissions system
4
Market Leading Products
Cogeneration
electricity and hot water
Chillers
hot and cold water
Water Heaters
up to 200% efficiency
Energy
Production
On-site utility
Emissions
Reduction
criteria pollutant elimination
5
Sustainable Competitive
Advantage
Proprietary and patented
technology
Ultera Emission control
Inverter architecture
Permanent magnet generator
Natural gas engine optimization
In-house engineering and
installation
Fully integrated on-site service
and maintenance
Creates value proposition
for customers that drives
✓ Revenue Growth
✓ Robust Gross Margins
✓ Repeat Business
Tecogen is the market
leader in its class
6
Born to Innovate
2000: Investor
group led by
John and George
Hatsopoulos
acquires
Tecogen
2003: First (and only)
engine driven CHP
module to obtain full
California Electric Rule
21 Certification
2008: Roll out
of original
InVerde
cogeneration
unit
2013: Patent
awarded for
Ultera
emissions
technology
2014: IPO and
listing on
NASDAQ:
TGEN
2016: Roll out of
dramatically
upgraded InVerde e+
2017:
Acquisition of
American DG
Energy
2018: Inverter
obtains UL 1741
SA Certification
Originally founded as an energy technology
R&D center within Thermo Electron Corp.
(now Thermo Fisher Scientific)
7
Deep and Diverse Customer Base
Cogeneration
25%
Chiller & Other
Products
14%
Service
Contracts
26%
Installations
23%
Energy
Production
12%
2017 Revenue by StreamInstalled Base at YE ‘17
Over 2,500 units
installed to-date
Two streams of stable revenue provide
balance to faster growing and more
volatile product and installation revenues
NOTE: Energy Production
revenue acquired in May, 2017Broad Source of Sales
Direct Sales Effort
ESCOs
Building Management
Companies
Engineering Firms
Energy Efficiency
Consultants
8
Multi-Unit
Residential
39%
Hospitality &
Recreation
11%
Other
15%
Industrial &
Manufacturing
10%
Education
15%
Health Care
10%
Substantial Growth Opportunities
Untapped potential for application of
emissions technology to automotive
and fork truck industriesEvolving market
conditions
encourage
adaption
Inexpensive
and
abundant
natural gas
Improving
regulatory
environment
Direct cash
incentives
Federal
investment
tax credit
Demand
response
incentives
and demand
charge
avoidance
Grid
resiliency
and blackout
protection
$40+ billion market potential for CHP*
9
*Global Market Insights: Global Combined
Heat and Power Market Report. April, 2017
Cogeneration:
Electricity and Heat
Modular and scalable
Best in class electrical efficiency
60-125 kW, scalable to 1MW+
Remote monitoring
✓ Proprietary inverter
✓ CERTS certified
microgrid system
✓ Blackout protection
✓ Cost effective
heat and power
Ideal for
• Locations with many beds and showers: hotels,
dormitories, apartment buildings, prisons
• Light manufacturing and industrial facilities with
hot water requirements
• Fitness centers
10
Chillers (Mechanical CHP):
Heating and Cooling
Ideal for
• Hospitals
• Indoor agriculture
• Light manufacturing and industrial
facilities with both cooling and heating
requirements
• Sports facilities: Swimming pools, ice
rinks
The only natural gas engine
driven chiller on the market
30-60% cheaper to operate than equivalent electric
chillers
Three sizes
RT: 50 tons, air-cooled
STx: 15-200 tons, water-cooled
DTx: 300-400 tons, water-cooled
50-400 tons of cooling capacity
“Free” waste heat and clean carbon dioxide
emissions stream may be repurposed for indoor
agriculture applications
11
Water Heaters:
Up to 300% Efficiency
Ideal for
• Customers with high
natural gas prices
• Food and beverage
processing facilities
• Nursing homes, spas,
apartment buildings
The world’s most efficient
water heater
2-3x the efficiency of a conventional boiler cuts
energy consumption and carbon dioxide
emissions in half
Compact natural gas or propane fueled heat
pump
Creates both hot and chilled water
simultaneously
Available in three configurations
Water-source
Air-source
Air-source “split system:” enables remote
installation of air-source evaporator
12
Energy Production:
On-site Utility
Sells heat, power, and/or
cooling directly to customer
Stable source of revenue with robust margins
Future contracted revenue of over $50 million
(undiscounted)
Acquired on May 18, 2017
Acquisition creates a vertically integrated clean technology company with a complete end-to-end
distributed generation offering – design, manufacturing, financing, installation, and maintenance.
13
Emissions Reduction:
Criteria Pollutant Elimination
Non-invasive emissions system
Reduces criteria pollutants (Nox, NMOG, CO) to near zero
fuel-cell equivalent levels
Patent protected and insured
Installed on virtually all Tecogen equipment
Simple retrofit to existing engines with no performance
loss
Proven in Tecogen, Ford, GM, Caterpillar, Generac, etc.
14
South Coast Air Quality Management District (SCAQMD) of southern California has reset its
Best Available Control Technology (BACT) standard for non-emergency engine-driven
generators to a level that rich-burn engines can only achieve when equipped with Ultera
Fork trucks that operate indoors must meet strict
emissions standards
Affordability, distribution network, and power profile
make propane the fuel of choice
Batteries and fuel cells greatly compromise performance
Funded in part by the Propane education & research
Council (PERC)
Test of retrofitted fork truck exceptionally successful
Propane powered
fork trucks
Successful Phase 1 and 2 testing validated proof of
concept
Contract in place with research institute to optimize
catalyst formations for gasoline powered engines
Future phases to focus on development of a
commercially viable prototype
Gasoline powered
passenger and
light duty vehicles
Wholly-owned subsidiary charged with the effort to commercialize Ultera for non-stationary applications
Ultera Technologies, Inc.
Applying Ultera to Mobile Vehicles
15
Sustained Positive
Financial Results
16
Record annual revenue in 2017 of
$33.2 million
Sustained step change to profitability
achieved in 3Q’16
Six consecutive quarters of positive
operational results
Adjusted EBITDA of $1.1 million for
the year of 2017, $533K in 4Q’17
Non-GAAP Adjusted EBITDA is defined as net income (loss)
attributable to Tecogen Inc., adjusted for interest, depreciation and
amortization, stock based compensation expense and one-time
merger related expenses. See slide 23 for reconciliation.
-$1,500
-$1,000
-$500
$0
$500
$1,000
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Adjusted EBITDA
Quarterly with T4Q Average (dotted line) - $Thousands
4Q and FY’17 Results
4Q'17 4Q'16 YoY Chg FY'17 FY'16 YoY Chg
Revenues 10,264,163 7,111,108 44% 33,202,666 24,490,386 36%
Cost of sales 6,469,082 4,407,486 47% 20,248,262 15,189,708 33%
Gross profit 3,795,081 2,703,622 40% 12,954,404 9,300,678 39%
General and administrative 2,477,998 2,096,131 18% 9,520,497 7,994,361 19%
Selling 713,448 419,171 70% 2,271,826 1,636,704 39%
Research & development 295,864 142,368 108% 936,929 667,064 40%
Total operating costs 3,487,310 2,657,670 31% 12,729,252 10,298,129 24%
Income (loss) from
operations 307,771 45,952 573% 225,152 (997,451) N/A
Interest and other income 6,593 2,413 173% 27,626 11,988 130%
Interest expense (40,056) (43,809) -9% (155,082) (175,782) -12%
Consolidated net Income (loss) 274,308 4,556 6220% 97,696 (1,161,245) N/A
(Income) loss attributable to
noncontrolling interest (5,327) 0 N/A (50,260) 64,962 N/A
Net income (loss)
attributable to Tecogen Inc. 268,981 4,556 6098% 47,436 (1,096,283) N/A
17
Company Information
Tecogen, Inc.
45 First Ave
Waltham, MA 02451
NASDAQ: TGEN
www.tecogen.comContact
John Hatsopoulos, Chairman Emeritus
781.622.1120
John.Hatsopoulos@Tecogen.com
Jeb Armstrong, Director of Capital Markets
781.466.6413
Jeb.Armstrong@Tecogen.com
Contact Information
Energy Efficiency Reimagined
18
Management team
Board of Directors
Detailed financial information
Cogeneration InVerde e+ data
Cogeneration savings case study
Tecochill chiller data
Indoor agriculture
Ilios water heater data
Ultera emission technology diagram
Emission reduction comparison chart
Standby generator emissions test results
AVL car emissions test results
Fork truck emissions test results
Appendix
19
Tecogen Inc Company Information
NASDAQ Ticker TGEN
Recent Stock Price ~$3.05/sh
52-week Range $2.05 - $4.15/sh
Shares Outstanding (12/31/17) 24.76 million
Market Capitalization ~$76 million
Ownership of Directors, Officers,
and their family trusts (12/31/17) 19.6%
Long term Debt (12/31/17) $850 thousand
Total Assets (12/31/17) $50.7 million
Member: Russell Microcap ® Index
Management Team
20
Benjamin
Locke
Chief Executive Officer
• Co-CEO from 2014 to 2018
• Joined company as general
manager in 2013
• Director of Business
Development at Metabolix
from 2001 to 2013
• Previously served as Vice
President of Research at
Innovative Imaging Systems
Robert
Panora
President, COO
• General Manager of
Tecogen’s product group
since 1990
• Manager of Product
Development, Engineering,
and Operations since 1984
Bonnie
Brown
Chief Accounting Officer
• CFO of American DG Energy
from 2015 to merger
• Previously CFO of Tecogen
from 2007 to 2014
• Joined Tecogen in 2005 as
Controller
• Partner at Sullivan, Bille, PC,
a regional accounting firm
prior to joining Tecogen
Jack Whiting
General Counsel
• Prior to joining Tecogen in
2018, was VP, General
Counsel & Secretary of
GeNO LLC (2012-2017),
Levitronix LLC (2009-2011),
and American Renal
Associates (2002-2008)
• Associate General Counsel
of Thermo Electron from
1996 to 2002
Board of Directors
21
Angelina Galiteva
Director, Board Chairwoman
▪ Chair of the Company since 2005
▪ Founder and Chair of the Board for the
Renewables 100 Policy Institute, a non-
profit entity dedicated to the global
advancement of renewable energy
solutions since 2008
▪ Chairperson at the World Council for
Renewable Energy and Board member of
the Governors of the California ISO
John Hatsopoulos
Director, Chairman Emeritus
▪ CEO and Director since the Company‘s
organization in 2000
▪ Co-Founder for Thermo Electron Corp.,
now Thermo Fisher Scientific (NYSE:
TMO)
▪ As Thermo Electron CFO, grew company
from a market capitalization of ~$100
million in 1980 to over $2.5 billion
Charles Maxwell
Director, Chair of Audit Committee
▪ Company Director since 2001
▪ 40 years of energy sector specific
experience with major oil companies and
investment banking firms
▪ Former Senior Energy Analyst with
Weeden & Co.
▪ Board Chairman of American DG Energy,
Inc.
Keith Davidson
Director
▪ Company Director since 2016
▪ President of DE Solutions, a consulting and
engineering firm serving the distributed
energy markets
▪ Former Director of the Gas Research
Institute and past President of the
American Cogeneration Association
▪ 25 years of experience in energy and
environmental technology development
and implementation
Ahmed Ghoniem
Director
▪ Company Director since 2008
▪ Ronald C. Crane Professor of Mechanical
Engineering at MIT
▪ Director of the Center for 21st Century
Energy and Head of Energy Science and
Engineering at MIT
▪ Associate Fellow of the American Institute
of Aeronautics and Astronautics
Deanna Peterson
Director
▪ Company Director since 2017
▪ Chief Business Officer of AVROBIO since
2016
▪ Vice President of Business Development at
Shire Pharmaceuticals from 2009 to 2015
▪ Led development, priorization and
execution of Shire‘s overall corporate and
business development strategies
Year-End 2017 Financial Metrics:
Revenues, Margins, Growth
Four diverse revenue streams
Record product sales
Long term service contracts provide
steadily improving cash flow
Turnkey installation through Tecogen
service operations facilitates both
product sales and service revenue
Energy production via ADG sites
provides stable and reliable cash flow
Maintained total gross margin near 40%
22
$ in thousands 2017 2016
YoY
Growth
2017 % of
Total Rev
Revenue
Cogeneration $ 8,186 $ 7,795 5.0% 24.7%
Chiller (includes HEWH) 4,806 2,928 64.1% 14.5%
Total Product Revenue 12,991 10,722 21.2% 39.1%
Service Contracts and Parts 8,697 8,541 1.8% 26.2%
Installation Services 7,680 5,227 46.9% 23.1%
Total Service Revenue 16,377 13,768 19.0% 49.3%
Enery Production 3,834 0 N/A 11.5%
Total Revenue $ 33,203 $ 24,490 35.6% 100.0%
Cost of Sales
Products $ 8,012 $ 7,189 11.4%
Services 10,202 8,000 27.5%
Energy Production 2,035 0 N/A
Total Cost of Sales $ 20,248 $ 15,190 33.3%
Gross Profit $ 12,954 $ 9,301 39.3%
Net Income (Loss) attributable
to Tecogen Inc. $ 47 $ (1,096) 104.3%
Gross Margin
Products 38.3% 33.0%
Services 37.7% 41.9%
Aggregate Products and Services 38.0% 38.0%
Energy Production 46.9% N/A
Overall 39.0% 38.0%
>20% product
revenue growth
Record breaking
revenues
Contribution
from ADG sites
Consistent Financial Progress
*Adjusted EBITDA is defined as net income (loss) attributable to Tecogen Inc,
adjusted for interest, depreciation and amortization, stock based compensation
expense and one-time merger related expenses.
Steady growth in the backlog
translates directly to revenue and
bottom-line growth
23
Year Ended December 31
$ in thousands 2017 2016
Non-GAAP financial disclosure
Net income (loss) attributable to Tecogen Inc. $ 47 $ (1,096)
Interest expense, net 127 164
Depreciation & amortization, net 588 264
EBITDA 763 (668)
Stock based compensation 184 166
Merger related expenses 156 0
Adjusted EBITDA* $ 1,103 $ (503)
Quarter Ended December 31
$ in thousands 2017 2016
Non-GAAP financial disclosure
Net income attributable to Tecogen Inc. $ 269 $ 5
Interest expense, net 33 41
Depreciation & amortization, net 185 65
EBITDA 487 111
Stock based compensation 45 49
Merger related expenses 0 0
Adjusted EBITDA* $ 533 $ 160
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
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Weekly BacklogData: Product and Installation Services
$ thousands
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
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Revenues: Trailing 4 Quarters
Products
Services
Energy Production (ADGE)
$ thousands
30%
34%
38%
42%
46%
50%
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Trailing 4 Quarters (%)
G&A and Selling Costs as % of Revenue
Gross Margin
Consistent Financial Progress
Energy production revenue
acquired in May, 2017
Declining operating costs as a percent
of revenue demonstrates scalability
with revenue growth 24
InVerde e+ Data
25
Best in class efficiency: 33% electrical, 94% overall (LHV)
Ideal for markets with commercial electric rates over $0.12/kWh
Variable speed operation from 10kW to 125 kW with superior part-
load efficiency
Fully scalable to multi-MW system
Cloud-based real-time performance monitoring
Indoor and outdoor installation
Dimensions (indoor 7’6”x4’0”x5’9” / outdoor 7’10”x4’11”x6’4”)
Weight (indoor 4,300 lbs / outdoor 4,800 lbs)
Acoustic Level: 69 dBa @ 20’
Operating Temperature Range: -4⁰ to 104⁰ F (-20⁰ to 40⁰ C)
Smart Inverter Technology
UL 1741 certified
Unique CERTS-Microgrid capability enables grid-independent
operation
Only inverter-based CHP system that meets NFPA’s Type 10
Emergency Power Supply System rapid blackstart standard
Demand Response capable for automatic dispatching
Energy savings can pay
back initial investment in
as few as 2-5 years
Cogeneration Case Study
26
Location: 205 West End Ave, New York City
What: Two InVerdes that went into service in
April, 2016
Cumulative Savings: $300 thousand over first 24
months of operation
Expected Payback Period: 4 to 6 years before
NYSERDA rebate
Total Electric Generation: 2,219 MW-Hours
Average Electrical Efficiency: 27.1%
Total Efficiency: 63.3% with 51.5% of captured
heat utilized
50
70
90
110
130
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
28.0%
Apr-
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Electricity Generation: MWH (RHS)
Electrical Efficiency
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$0
$3,000
$6,000
$9,000
$12,000
$15,000
$18,000
Apr
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Electrciity Savings
Heat Savings
Cumulative Savings (RHS)
Source of Operational Data: NYSERDA DG Integrated Data System
Tecochill Data
27
Only natural gas engine driven chiller available
Widely deployed across North America
Utilizes less than 1% of the electricity of competing electric
chillers, which can be supplied by small retail generator (<3kW)
Eliminates exposure to on-peak electric demand charges
Cloud-based real-time performance monitoring and system
control
Variable engine speed operation for excellent part load
performance and longer life
RT Series STx Series DTx Series
Cooling Capacity (tons) 50 150-200 300-400
Dimensions
Length 18’4” 13’10” 14’3”
Height 7’11” 4’4” 7’0”
Width 5’6” 6’9” 7’7”
Operational Weight (lbs) 8,300 11,750 23,650
Indoor Agriculture
28
Tecochill natural gas
powered chillers provide a
unique value proposition
for indoor farming
Rapidly growing market poised
for exponential growth
To grow 5x over five years according to Agrilyst
Cannabis is primary near-term driver
Leafy greens, herbs, and tomatoes are also
attracting capital
Typically located near urban centers
Often have older infrastructure and higher
electricity rates
Tecochill chillers virtually eliminate need to
upgrade electrical infrastructure
Removes heat generated by lighting and
dehumidifies the air
Virtually pure carbon dioxide exhaust can be
utilized to help speed plant growth
Ilios Data
29
World’s most efficient water heater
2-3x the efficiency of a conventional boiler
Can generate 15 to 25 tons of free cooling
while producing hot water
Dimensions: 5’x3’x6’
Weight: 3,200 lbs
Air-source Heat Pump Water-source Heat Pump
Ultera Emission Technology
30
Second Stage
Catalyst
Virtually Pure
CO2 stream
First stage
eliminates NOx
Second stage
eliminates CO
Lowering exhaust
temperature prevents
reformation of NOx in
second stage
Fuel Cell Slayer: Enables internal combustion engine to achieve emissions similar to a fuel cell
Design fits well
within existing
fork truck
architecture and
does not require
significant
reengineering
Ultera on roof of outdoor InVerde
Engine tuned to
run slightly rich
Heat
Exchanger
First Stage
Catalyst
Internal
Combustion
Engine
Stationary Emissions
Reduction Comparison
31
1) Tecogen emissions based upon actual third party source test data
2) Microturbine and Fuel Cell NOx data from California Energy Commission, Combined Heat and Power Market Assessment 2010,
by ICF International
3) Stationary engine BACT as defined by SCAQMD prior to reset of BACT to Rule 1110.2 standard on 2/2/18.
4) Limits represent CARB 2007 emission standard for Distributed Generation with a 60% (HHV) Overall Efficiency credit
5) CO data not available for microturbine and fuel cell
0
5
10
15
20
25
30
Tecogen Ultera Microturbine Fuel Cell Engine BACT
Em
is
si
on
s
[p
pm
@
1
5%
O
2]
NOx CO
CARB CHP NOx Standard4
CARB CHP CO Standard4
70 ppm
(Note 5) (Note 5)
AVL Automotive
Emissions Test Results
32
Ultera Reduction of CO Concentration – US06 Cycle
Standard Vehicle Emission System With the addition of the Ultera System
Graphs present the reduction of measured CO concentration where CO concentration (ppm)
is represented by the red line and the vehicle speed (in km/h) is represented by the blue line
and depicts patterns of acceleration and deceleration.
CO is nearly eliminated by the Ultera System
AVL Automotive
Emissions Test Results
33
Ultera Reduction of NMHC Concentration – US06 Cycle
Standard Vehicle Emission System With the addition of the Ultera System
Graphs present the reduction of NMHC (non-Methane hydrocarbons) where NMHC
concentration (ppm) is represented by the black line and the vehicle speed (in km/h) is
represented by the blue line and depicts patterns of acceleration and deceleration.
Stand-By Generator
Emissions Test Results
34
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
CO @ 15%
O2 (ppm)
NOx @ 15%
O2 (ppm)
Ultera Performance on Caterpillar 15 Liter Natural Gas Generator
Fork Truck Emissions
Test Results
35
0
100
200
300
400
500
600
700
800
900
1000
250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000
CO
[pp
m
]
Runtime [sec]
Pre Ultera System
Post Ultera System
400 F (204 C) Ultera Temperature
0
10
20
30
40
50
60
70
80
90
100
250 30 350 40 4 0 50 550 60 650 70 750 80 850 900 950 1000
NO
x
[pp
m
]
Runtime [sec]
Pre Ultera System
Post Ultera System
400 F (204 C) Ultera T mperature
Heavy Lift Test: Exceptional Results
99% CO reduction
58% THC reduction
24% NOx reduction
Fork Truck Emissions
Test Results
36
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1100 1160 1220 1280 1340
CO
[pp
m
]
Runtime [sec]
CO - Pre Ultera
CO - Post Ultera
Low NOx Tuning Test (low loading) 0
10
20
30
40
50
60
70
80
90
100
1100 1160 1220 1280 1340
NO
x
[pp
m
]
Runtime [sec]
NOx - Pre Ultera
NOx - Post Ultera
Near-zero NOx levels achieved with simple engine control tuning (reprogramming)