Active Power Receives Additional Orders from China; Manufacturing Facilities to Benefit from Flywheel Technology.

AUSTIN, Texas -- Active Power, Inc. (NASDAQ:ACPW), a leading manufacturer of battery-free power quality products, received orders for two Cat(R) UPS 750 kVA systems to be installed at manufacturing facilities in China by year's end. These installations will represent Active Power's second and third installations in China.

The units will be installed in an optical lens factory and a rayon fiber plant. Because of the sensitive nature of the equipment used in these types of facilities, UPS systems are used to ensure that clean, constant power is supplied. Power from the utility typically suffers from such anomalies as surges, sags, brownouts, and overvoltages, which wreak havoc on sensitive machinery. Although battery-based UPS systems have traditionally been deployed, Active Power's flywheel-based UPS technology, marketed worldwide as Cat(R) UPS, has been increasingly used to provide clean, uninterruptible power when coupled with an engine generator. While battery-based systems suffer the detrimental effects of frequent power anomalies, the flywheel-based solution can endure virtually unlimited duty cycles with no degradation in performance or usable life. In growing industrial markets like China where the electrical grid is inconsistent, the flywheel UPS offers a much more robust and cost effective solution than the traditional battery-based alternative.

"The customers evaluated several solutions before finally deciding on Caterpillar's flywheel solution," stated Peter Lau, Manager, Electric Power Segment, Caterpillar China Power Systems. "The lifetime costs, as well as the difficult environments in which it can operate were big factors in the decision-making process. We are quite excited about the opportunities we see for the Cat UPS in China."

"Active Power continues to expand its global reach through Caterpillar with these additional sales into China. The opportunities in China are substantial and the flywheel UPS is a nice fit in this market," said Joe Pinkerton, Chairman and CEO of Active Power. "We continue to see momentum build for our flywheel UPS line in the developing world, particularly in the industrial sector."

With over 150,000 kilowatts installed worldwide and nine million hours of field operation, Active Power's CleanSource products are a proven alternative to problematic battery-based systems. CleanSource flywheel technology uses the kinetic energy from a constantly spinning steel flywheel to power a critical load during a utility failure until a backup generator is brought on line. With the addition of the new extended runtime CleanSource XR, Active Power continues to offer the broadest range of battery-free power quality solutions: the CleanSource DC product line, which is compatible with all leading UPS brands and is available in the 100 - 2000 kW range; the CleanSource UPS product family, available from 65 kVA to 3600 kVA; and now CleanSource XR, ranging from 5 kW to 85 kW. Recognized by Frost & Sullivan for its ability to satisfy customer needs with new and innovative products, Active Power continues to rapidly expand its product line to address the needs of new market segments and geographies. For more information visit www.activepower.com, e-mail [e-mail] or call toll free 877-FLYWHEEL (359-9433).

About Active Power:

Active Power, Inc. (www.activepower.com) designs, manufactures and markets battery-free power quality products that provide the consistent, reliable electric power required by today's digital economy. An ISO 9001-registered company, Active Power is the first to commercialize a flywheel energy storage system that provides a highly reliable, low cost and non-toxic replacement for lead-acid batteries used in conventional power quality installations.

Cautionary Note Regarding Forward-Looking Statements:

Any forward looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

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