March 12, 2010 09:04 AM Eastern Time Beacon Power Connects Flywheel Energy Storage System to California Wind Farm Project intended to demonstrate transmission line capacity enhancement and facilitate wind power growth TYNGSBORO, Mass.--(BUSINESS WIRE)--Beacon Power Corporation (Nasdaq: BCON), a leading provider of advanced products and services to support a more stable, reliable and efficient electricity grid, today announced that it has shipped, installed and successfully connected a Smart Energy™ 25 (Gen 4) flywheel energy storage system at a wind farm in Tehachapi, California. The system is part of a wind power/flywheel demonstration project being carried out for the California Energy Commission. The primary goal of the project is to demonstrate that advanced control technology with energy storage can help expand the delivery of wind energy by effectively increasing the capacity of constrained transmission facilities in the area. Tehachapi, California, is a high-potential wind resource area where, according to a report from the California ISO, up to 4,200 megawatts of wind power may be added in the coming years. “Successfully integrating renewable energy onto the grid is one of California’s top energy priorities. As California builds the infrastructure to achieve 33 percent renewable energy resources by 2020, this research will be important in operating the transmission grid with more renewables in the future,” said Energy Commissioner Jeffrey Byron. “In collaboration with the Commission’s Public Interest Energy Research (PIER) program, California ISO, and PG&E, Beacon Power completed a successful research project and field demonstration on the value of energy storage for maintaining reliability on the grid. It helped us better understand the communications and system control issues associated with integrating energy storage onto California’s electrical grid,” said Byron. “This is the first Gen 4 flywheel that we’ve shipped, installed and operated outside of Beacon’s facility, and it went very smoothly,” said Bill Capp, Beacon president and CEO. “It’s also the first of our systems intended to show how energy storage can help optimize the output of a wind farm. We’re pleased with the continuing good relationship we have with the California Energy Commission and the California ISO as they address the challenges of deploying intermittent renewable energy resources.” The project will incorporate “intelligent agent” controls and Beacon’s flywheel energy storage technology to demonstrate how to enable as much wind-generated electricity to be delivered as possible without exceeding the limits of the locally constrained transmission system. Energy storage and intelligent agent control technology have been identified as key elements of the Smart Grid, a U.S. DOE-funded and industry-supported initiative to modernize the country’s electrical transmission systems and make possible more efficient delivery of power, along with a more flexible, robust, and reliable grid. Under the scope of this project the Smart Energy™ 25 flywheel will normally provide frequency regulation. However, during times when the local sub-transmission line becomes constrained due to lack of reactive power or thermal overload, intelligent agents will override the regulation function and direct the flywheel to take action that in a full-scale commercial system would help alleviate the constraint. Once the constraint is resolved, the system will return to its primary function of performing frequency regulation. In this way the project will provide proof of concept of how flywheel energy storage can deliver additional value to a grid operator beyond its main function of frequency regulation. In addition to the California Energy Commission, which is funding the project, and Alternative Energy Systems Consulting (AESC), the prime contractor, other leading stakeholders include the California Independent System Operator (ISO) and Southern California Edison. About Beacon Power Corporation Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacon’s Smart Energy Matrix™, now in production, is a non-polluting, megawatt-scale, utility-grade, flywheel-based solution designed to provide less expensive, and more sustainable and effective frequency regulation services to the nation’s power grid. The Company’s business strategy is both to supply frequency regulation services from its own plants and to sell systems directly to 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. About Alternative Energy Systems Consulting Alternative Energy Systems Consulting, Inc. (AESC) provides high quality energy engineering and management consulting services to enable rapid deployment of efficient, cost-effective, reliable, and environmentally friendly energy systems. AESC’s customized technical solutions and services are provided to utilities, government agencies, and corporations that seek to improve energy production, delivery, and end use. The company’s development efforts include intelligent software agent technology, customized Visual Basic (VB), Excel, Access and SQL Server interface applications, as well as custom Java-based applications for interactive data display. AESC is a privately held company with four California offices located in San Diego, Carlsbad, Concord and Pasadena. For more information, visit www.aesc-inc.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 “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation’s current views about future events, financial performances, and project development. These “forward-looking” statements are identified by the use of terms and phrases such as “will,” “believe,” “expect,” “plan,” “anticipate,” 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 Beacon’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 Beacon’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 FERC’s requirement to update market rules to include new technology such as the Company’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, including not providing reactive power before 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.