Beacon Power Begins Earning Revenue from Commercial Frequency Regulation Services.

Company's Smart Energy Matrix Flywheel System Now Operating in Pilot Program on ISO New England Grid

TYNGSBORO, Mass. -- Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, announced that it has begun earning revenue from commercial frequency regulation with a one megawatt (MW) Smart Energy Matrix flywheel storage system connected to the ISO New England grid.

ISO New England's Alternative Technologies Pilot Program allows Beacon to generate revenue for regulation services, while permanent market rules are developed. This process is expected to take approximately 18 months. If at the end of the 18-month period permanent rules are not yet in place, the pilot program and its revenue component will continue until such rules are in place.

The pilot program was approved by the Federal Energy Regulatory Commission (FERC) as part of ISO New England's compliance with FERC Order No. 890. Order No. 890 is intended to promote greater competition in electricity markets, strengthen the reliability of the grid, and allow so-called "non-generation" resources (which include Beacon's flywheel technology), to participate in regulation markets on a non-discriminatory basis.

As part of the process of modifying its market rules, ISO New England and Beacon will be working together to optimize performance by adjusting the control signal sent from the ISO to the Beacon Smart Energy Matrix. This "fine-tuning" by the ISO will allow it to maximize regulation effectiveness and will also determine the regulation service payments to be paid to Beacon. ISO New England has a multi-part payment model for regulation that is being adapted for application to energy storage-based regulation systems.

"This is a major achievement in Beacon Power's history, and initiates the transition from a development-stage to a commercial company," said Bill Capp, Beacon president and CEO. "With the growing deployment of renewable energy sources we are seeing strong interest in our regulation service from grid operators, federal policy makers and public utility commissioners. We look forward to steadily increasing our operational availability and to adding more capacity this year and next."

The 1 MW Smart Energy Matrix is located and running within Beacon's Tyngsboro, Massachusetts, headquarters. Beacon has previously announced that it will connect an additional 2 MW to this system by the end of 2008, and add 2 MW more (for a total of 5 MW) in the first quarter of 2009. The additional 4 MW, which are now under construction, will be located adjacent to the Company's facility.

About Beacon Power

Beacon Power Corporation designs, develops and is taking steps to commercialize advanced products and services to support stable, reliable and efficient electricity grid operation. The Company's primary business strategy is to commercialize its patented flywheel energy storage technology to perform frequency regulation services on the grid. Beacon's Smart Energy Matrix, which is now in production, is designed to be a non-polluting, megawatt-level, utility-grade flywheel-based solution to provide sustainable frequency regulation services. 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: This 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 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, especially in view of the current situation in the financial markets; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether the Company will be successful in obtaining DOE loan guarantee support for its New York facility; conditions in target markets, including the fact that some ISOs have been slow to comply with the FERC's requirement to update market rules to include new technology such as the Company's; the Company's 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; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; the uncertainty of the political and economic climate, and the different electrical grid characteristics and requirements of any foreign countries into which we hope to sell or operate, including the uncertainty of enforcing contracts, the different market structures, and the potential substantial fluctuation in currency exchange rates in those countries; 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, including the effect of the patent litigation initiated last year against us; 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. 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 expressly does not undertake any duty to update forward-looking statements.