Beacon Power and NYSERDA Sign $2 Million Contract in Support of Stephentown Flywheel Plant

TYNGSBORO, Mass.--([ BUSINESS WIRE ])--Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, announced that it has signed a $2 million contract with the New York State Energy Research and Development Authority (NYSERDA).

"I am pleased to support this innovative project, which will both help the local economy and stabilize the statea�s power grid in a clean and sustainable way."

NYSERDA will provide partial funding for critical grid infrastructure elements at Beacona�s 20 MW frequency regulation plant in Stephentown, New York, including interconnection components to allow the plant to interface with the New York power grid. NYSERDA will also fund certain other project aspects, including a visitor information center to be built at the Stephentown site.

aNYSERDA is one of the most innovative and forward-looking energy organizations in the country,a said Bill Capp, Beacon president and CEO. aStarting more than five years ago when we began working together to demonstrate that flywheel energy storage could provide clean, responsive frequency regulation, right up to todaya�s significant funding agreement for Stephentown, NYSERDA has recognized the efficiency and value that our technology can bring to the state and its electricity users.a

Francis J. Murray, Jr., NYSERDA president and CEO said: aAdvanced energy-storage technologies like the one Beacon is incorporating into its plant are essential for New York to achieve substantial reductions in our greenhouse gas emissions and energy use. This Beacon project is a unique initiative that will help protect our environment, strengthen our clean energy economy, and demonstrate New Yorka�s leadership in developing smart grid systems that will increase our energy efficiency.a

aAs our country seeks to move toward a 21^st century clean energy economy, this flywheel energy storage plant that Beacon Power is building in Stephentown is exactly whata�s needed,a said Congressman Scott Murphy (NY-20). aI am pleased to support this innovative project, which will both help the local economy and stabilize the statea�s power grid in a clean and sustainable way.a

Beacon first demonstrated how its flywheel technology could respond to grid frequency regulation control signals in New York with a small-scale energy storage project in Amsterdam that was partially funded by NYSERDA in 2006. The Company broke ground at the Stephentown site in November 2009, after the project won approvals by the New York State Public Service Commission, the New York Independent System Operator (NYISO), and the local planning board.

Flywheel Energy Storage and Frequency Regulation

Frequency regulation is an essential grid service that is performed by maintaining a tight balance between electricity supply and demand. Beacona�s 20 MW plant has been designed to provide frequency regulation services by absorbing electricity from the grid when there is too much, and storing it as kinetic energy in a matrix of flywheel systems. When there is not enough power to meet demand, the flywheels inject energy back into the grid, thus helping to maintain proper electricity frequency (60 cycles/second).

Thanks to their ability to recycle electricity efficiently and act as ashock absorbersa to the grid, Beacona�s flywheel plants will also help support the integration of greater amounts of renewable (but intermittent) wind and solar power resources. Unlike conventional fossil fuel-powered generators that provide frequency regulation, flywheel plants will not consume any fuel, nor will they directly produce CO₂ greenhouse gas emissions or other air pollutants, such as NO_X or SO₂.

About NYSERDA

NYSERDA offers technical and financial support to help make New York State energy customers more energy efficient, and to help New York businesses develop clean energy solutions, increase energy efficiency, protect the environment and save money.

About Beacon Power

Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacona�s Smart Energy Matrixa", now in production, is a non-polluting, megawatt-scale, utility-grade, flywheel-based solution designed to provideless expensive, more sustainable, andeffective frequency regulation services to the nationa�s power grid. The Companya�s business strategy isboth tosupplyfrequency regulation servicesfromits own plants and to sellsystems directlyto utilities or grid operators in parts of North America and selected international markets. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit [ www.beaconpower.com ].

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: The Material contained in this press release may include statements that are not historical facts and are considered aforward-lookinga statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporationa�s current views about future events, financial performances, and project development. These aforward-lookinga statements are identified by the use of terms and phrases such as awill,a abelieve,a aexpect,a aplan,a aanticipate,a and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacona�s expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be successful in finalizing the DOE loan guarantee support for our Stephentown, New York, facility, or complying with the conditions or ongoing covenants of that support; our need to comply with any disbursement or other conditions under the DOE grant program; a need to raise additional equity to fund Beacona�s projects and its other operations in uncertain financial markets; conditions in target markets, including the fact that it has taken longer than anticipated for some ISOs to comply with FERCa�s requirement to update market rules to include new technology such as the Companya�s; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of the current situation in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.

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Beacon Power and NYSERDA Sign $2 Million Contract in Support of Stephentown Flywheel Plant