Beacon Power Announces Successful Completion of Flywheel System Acceptance Testing by NYSERDA; New York State Energy Research and Development Authority (NYSERDA) and U.S. Department of Energy Approve Demonstration System Shipment.

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, announced that it has successfully completed the pre-shipment acceptance testing for a scale-power Smart Energy Matrix demonstration unit, built under contract to the New York State Energy Research and Development Authority (NYSERDA) and the U.S. Department of Energy. The acceptance tests were conducted at Beacon Power's facility in Wilmington, Massachusetts. The system is expected to be installed and connected to the grid at the demonstration host site in Amsterdam, New York, during March 2006.

"We are pleased that Beacon Power's Smart Energy Matrix demonstration system has completed factory acceptance testing, which is the last milestone prior to shipment," said Peter Smith, president of NYSERDA. "This project is part of NYSERDA's continuing commitment to identify and deploy advanced technologies that have the potential to improve the reliability and performance of our electrical grid infrastructure, for the benefit of consumers in New York State."

"Successfully testing and gaining approval to ship our second Smart Energy Matrix demonstration system is another step toward proving that our flywheel technology is viable for wider commercial deployment," said Bill Capp, Beacon Power president and CEO. "With one demonstration system already in California and this one soon to be installed in New York, we can show how Beacon's high-energy flywheels provide a cleaner and better-performing alternative to conventional fossil fuel-based frequency regulation services - and do so cost-effectively. The NYSERDA system was enhanced to enable it to also provide uninterruptible power to the site, as well as volt-amperes reactive power, or VARs, which help stabilize power to electrical equipment. Having these additional capabilities allows us to demonstrate that the Smart Energy Matrix can also meet the technical requirements for several other commercially viable applications," Capp added.

During the acceptance testing, the ability of Beacon's Smart Energy Matrix to follow signals required for frequency regulation and to provide VAR support was confirmed. Testing for these functionalities involved verification of key performance parameters including: system communications (with a new graphical user interface that further simplifies monitoring and operation); compliance with a range of application-specific charging and discharging profiles; and demonstration of normal system operation and shutdown modes.

In addition to supporting the system demonstrations in New York and California, Beacon continues its progress to develop its next-generation 25-kWh flywheel, which will be the core component of the full-power Smart Energy Matrix. That project remains on schedule, with a prototype expected to be ready for testing in late 2006.

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 thereby 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.

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 or supplying frequency regulation services on a commercial basis; limited commercial contracts for sales to date; 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 recent volatility in the stock price of companies operating in the same sector; 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.