Beacon Power Announces Second-Quarter 2005 Results.

WILMINGTON, Mass. -- Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable and reliable electricity grid operation, today announced its financial results for the second quarter ended June 30, 2005.

For the second quarter of 2005, Beacon Power reported revenue of $318,000, compared with revenue of $126,000 in the second quarter of 2004. Revenues for the six months ending June 30, 2005 were $954,000 compared to $184,000 for the same period in 2004.

Beacon Power reported a net loss of $1.8 million, or ($0.04) per share compared to a net loss of $2.3 million, or ($0.05) per share for the second quarters of 2005 and 2004, respectively. For the six months ended June 30, 2005 the Company reported a net loss of $4.0 million or ($0.09) per share, compared to a net loss of $4.4 million, or ($0.10) for the six months ended June 30, 2004.

For the quarter ended June 30, 2005, the Company reported total costs and expenses of $2.0 million, compared with $2.4 million for the second quarter of 2004. Total costs and expenses for the six months ended June 30, 2005 were $5.0 million compared to $4.6 million for the same period in 2004.

Beacon Power ended the second quarter of fiscal 2005 with approximately $3.5 million in cash and cash equivalents. This amount includes $1.5 million invested by Perseus 2000 Expansion, L.L.C. on May 24, 2005 in exchange for 1,666,667 shares of Beacon's common stock, a warrant to purchase initially up to 800,000 shares of Beacon common stock at a price per share of $1.008, and an agreement to extend the term of an existing warrant by two years through May 23, 2007. In addition, on June 13, 2005, Perseus invested an additional $500,000 in the Company in exchange for 595,238 shares of Beacon common stock and a warrant to purchase initially up to 138,636 shares of Beacon common stock at a price per share of $1.008. Pursuant to the terms of the Investment Agreement with Perseus, the Company used the $500,000 to purchase 111,111 Class A preferred shares of NxtPhase T&D Corporation, a company with which Beacon has entered into an agreement for the acquisition of NxtPhase, subject to various closing conditions.

"At the mid-way point of the year, we're proceeding on schedule with the two Smart Energy Matrix(TM) demonstration systems we're building for installation in California and New York," said Bill Capp, Beacon Power president and chief executive officer. "In less than one year, our engineering team has been able to design, develop, assemble and integrate the world's first flywheel matrix to demonstrate how responsive energy storage can provide grid frequency regulation. The result of their efforts is that the system was successfully tested and approved for shipment to California later this month, pending completion of installation site preparations."

Capp added, "With field testing of the first prototype Smart Energy Matrix imminent, and the expected shipment of our second system to New York in the fall, we're beginning to see interest in this demonstration from energy officials and experts around the country. With the Energy Bill now becoming law, including new standards for grid reliability, we believe that our cleaner, better-performing technology will represent an appealing alternative for grid operators and utilities."

"We continue to meet with potential investors and other industry supporters. We believe that we will be able to raise sufficient funds to continue operations and begin development of the flywheel system for the Smart Energy Matrix," said James Spiezio, CFO of Beacon Power.

About Frequency Regulation

One of the most challenging aspects of today's electricity grid is that the amount of power generated and the amount consumed must be in exact balance at all times. When imbalances occur, the frequency of electricity (60 hertz in the U.S.) that end users require will not be maintained, which adversely affects grid stability. The constant balancing of power demand and production to maintain a stable frequency is called frequency regulation. Beacon's Smart Energy Matrix is a flywheel-based energy storage system that is intended to be a long-life, environmentally friendly solution for frequency regulation, with no fuel consumed and no emissions generated. More details, along with an informative animated presentation, are available at www.beaconpower.com.

About Beacon Power

Beacon Power Corporation designs sustainable energy storage and power conversion solutions that would provide reliable electric power for the utility, renewable energy, and distributed generation markets. Beacon's Smart Energy Matrix is a design concept for a megawatt-level, utility-grade flywheel-based energy storage solution that would provide sustainable power quality services for frequency regulation, and support the demand for reliable, distributed electrical power. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com.

For more information, please contact James Spiezio, Chief Financial Officer at Beacon Power Corporation, tel. [phone]; fax [phone]; email [e-mail], or send mail to 234 Ballardvale Street, Wilmington, MA 01887. Visit Beacon Power on the Internet at www.beaconpower.com

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995:

Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" 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 and financial performances. These forward-looking statements are identified by the use of terms and phrases such as "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 Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so; conditions in target markets; no experience manufacturing any product on a commercial basis; limited commercial contracts for sales to date; little experience managing operations in geographically dispersed locations; the dependence of sales on the achievement of product development and commercialization milestones; the uncertainty of the political and economic climate of any foreign countries into which Beacon hopes to sell or in which it operates, including the uncertainty of enforcing contracts and the potential substantial fluctuation in currency exchange rates in those countries; significant technological challenges to successfully complete product development; dependence on third-party suppliers; intense competition from companies with greater financial resources; possible government regulation that would impede the ability to market products; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; the possible need in the future to hire and retain key executives, particularly in light of the substantial workforce reductions during 2001 and 2002; the volatility in the stock price of companies operating in the same sector; the difficulties that often arise in integrating operations of companies after a merger or acquisition; the power of controlling shareholders and the limited ability of others to influence the outcome of matters put to the vote of shareholders. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power Corporation expressly does not undertake any duty to update forward-looking statements.

BEACON POWER CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)

                      Three months ended         Six months ended
                            June 30,                  June 30,
                       2005         2004         2005         2004
                   ------------ ------------ ------------ ------------

Revenue            $   318,304  $   126,484  $   954,438  $   183,891
Cost of goods sold     333,956      308,088    1,004,464      383,867
                   ------------ ------------ ------------ ------------
Gross profit           (15,652)    (181,604)     (50,026)    (199,976)

Operating
 expenses:
  Selling,
   general and
   administrative    1,108,571    1,212,428    2,280,949    2,288,690
  Research and
   development         150,293      921,266      636,531    1,969,506
  Loss on sales
   and contract
   commitments         508,859            -    1,056,566            -
  Depreciation and
   amortization         22,918       43,199       41,109       89,785
                   ------------ ------------ ------------ ------------
     Total operating
      expenses       1,790,641    2,176,893    4,015,155    4,347,981
                   ------------ ------------ ------------ ------------

Loss from
 operations         (1,806,293)  (2,358,497)  (4,065,181)  (4,547,957)

Other income, net       41,512       92,292       55,399      133,025
                   ------------ ------------ ------------ ------------
Loss to common
 shareholders      $(1,764,781) $(2,266,205) $(4,009,782) $(4,414,932)
                   ============ ============ ============ ============

Loss per share,
 basic and diluted $     (0.04) $     (0.05) $     (0.09) $     (0.10)
                   ============ ============ ============ ============
Weighted-average
 common shares
 outstanding        44,801,287   43,273,817   44,299,825   43,197,760
                   ============ ============ ============ ============


                BEACON POWER CORPORATION AND SUBSIDIARY
                      CONSOLIDATED BALANCE SHEETS
                              (unaudited)

                                                June 30,  December 31,
                                                   2005          2004
                                           ------------- -------------
Assets
Current assets:
  Cash and cash equivalents                $  3,465,625  $  5,097,188
  Accounts receivable, trade                    127,415        52,105
  Inventory                                           -       222,593
  Unbilled costs on government contracts        241,790             -
  Prepaid expenses and other current
   assets                                       447,707       817,396
                                           ------------- -------------
    Total current assets                      4,282,537     6,189,282

Property and equipment, net                     252,840       258,647
Restricted cash                                 310,011       310,011
Investments                                     500,000             -
Other assets                                    559,978       327,646
                                           ------------- -------------

Total assets                               $  5,905,366  $  7,085,586
                                           ============= =============

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                         $    149,481  $    389,189
  Accrued compensation and benefits             177,188       130,609
  Other accrued expenses                        568,344       393,569
  Accrued contract loss                         455,339             -
  Restructuring reserve                         890,871     1,062,644
                                           ------------- -------------
    Total current liabilities                 2,241,223     1,976,011

Stockholders' equity:
  Common stock                                  466,669       437,888
  Deferred stock compensation                  (208,470)     (707,167)
  Additional paid-in-capital                136,536,697   134,411,911
  Deficit accumulated during the
   development stage                       (132,943,179) (128,933,397)
  Less: treasury stock, at cost                (187,574)      (99,660)
                                           ------------- -------------
    Total stockholders' equity                3,664,143     5,109,575

Total liabilities and stockholders' equity $  5,905,366  $  7,085,586
                                           ============= =============