Active Power Unveils Revolutionary New Technology; Thermal and Compressed Air Energy Storage is First Minute-for-Minute Battery Alternative.

AUSTIN, Texas -- Active Power, Inc. (NASDAQ:ACPW), a leading manufacturer of battery-free backup power products, today announced the details behind its latest breakthrough in alternative energy storage. The new technology, based upon the innovative combination of several mature technologies, constitutes a monumental achievement in energy storage by providing the extended runtimes of lead-acid batteries without any of the well-known shortcomings of these cells. This Thermal and Compressed Air Storage (TACAS) technology will be incorporated into Active Power's newest product that will begin shipping as an alpha unit late this year, the CleanSource(R) XR.

CleanSource XR stores energy in the form of heat and compressed air. During a utility outage, the compressed air is routed through a thermal storage unit to acquire heat energy. The heated air spins a simple turbine-alternator to produce electric power. Air that exits this small turbine is below room temperature and can be used to cool the protected load. Tanks that store the compressed air become cold during discharge, absorbing heat from the ambient environment and ultimately converting this heat into additional backup power. CleanSource XR also contains a small, continuous-duty flywheel that handles small fluctuations in power and supports the critical load during the brief period required for the air turbine to reach full speed in the case of an extended outage.

"Our technical team created a product that is truly revolutionary: it provides minutes to hours of instantaneous backup power without batteries while simultaneously providing backup cooling to a protected load. CleanSource XR transforms what customers don't want - heat in their data centers or telecom huts - into the reliable backup power they do want," said Joe Pinkerton, Chairman and CEO of Active Power. "We believe CleanSource XR will set a new standard in the $10 billion backup power industry."

Used almost universally in Uninterruptible Power Supply (UPS) systems, lead-acid batteries have long been considered a necessary evil because no minute-for-minute alternative existed. TACAS technology is expected to be competitive in cost and footprint to backup power batteries without the HAZMAT or environmental issues associated with these cells. The new system will handle the same challenging range of ambient temperatures and step-loads as Active Power's flywheel-based products. Unlike flywheels, however, a single TACAS module will provide up to 15 minutes of backup power at full load and can be configured to provide up to several hours of backup power for lighter loads.

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 CleanSource TACAS technology, 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 backup power 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.

Active Power and our Active Power logo, and CleanSource are registered trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.