Beacon Power Begins Formal Field Test of Smart Energy Matrix Frequency Regulation System in New York; Second Demonstration System Expected to Start Formal Field Testing in California in Several Weeks.

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 initial functional testing on its scale-power Smart Energy Matrix flywheel frequency regulation system in New York State has been completed, and that the system has been commissioned and begun its formal field trial. The system will be evaluated for approximately six months, during which time it will be monitored and controlled by U.S. Department of Energy (DOE) program officials. The objective of this demonstration is to show that Beacon Power's flywheel energy storage can be a more cost-effective, responsive, and environmentally friendly alternative to conventional frequency regulation methods. The system was delivered earlier this year under contract to the New York State Energy Research and Development Authority (NYSERDA), with partial funding from the U.S. DOE.

"We're very pleased to achieve this important milestone in the development of our flywheel systems," said Bill Capp, Beacon president and CEO. "Our progress in this area has been continuous and is the result of a highly focused and dedicated team effort. With rising fossil fuel prices, increased electricity demand, and a fragile power grid, clean, fast-responding solutions like Beacon's frequency regulation flywheel systems have the potential to deliver better performance and sustainable value to grid operators."

The Amsterdam, New York-based system was installed in March 2006. It is connected to the grid at a manufacturing facility, where it may also be used later on to provide back-up power support. This next phase of the contract consists of a rigorous "hands off" test regimen, designed to show durability, responsiveness, and performance to specifications designed for frequency regulation ancillary services on utility grids.

"As part of this final stage of testing, our goal is to obtain approvals from NYSERDA and the New York Independent System Operator, as to the system's suitability for providing grid frequency regulation," added Capp. "In parallel, we're applying what we learn from our demonstrations to design our next-generation flywheel. This advanced system will be the core component of full-power Smart Energy Matrix regulation services plants, which we expect to begin building and installing in 2007. Given our progress with both demonstration units, we're now focusing some of our engineering, finance and other resources on balance-of-system components that will be needed to site, build, own and operate our first 20 MW flywheel-based regulation services plant."

Beacon's second demonstration system, installed at a grid substation in San Ramon, California, is completing an extended period of pre-field trial preparation. This preparation included minor upgrades based on the experience gained from the system in New York, establishing secure communications control links, and development and approval by the California Energy Commission of extensive field-test procedures. It is expected that the formal field trial, which will also be independently monitored by the U.S. Department of Energy, will begin within the next several weeks. Results are expected to be reported before the end of 2006.

About Beacon Power

Beacon Power Corporation designs sustainable energy storage and power conversion solutions to 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, non-polluting, utility-grade flywheel-based energy storage solution that would provide sustainable grid-level services for frequency regulation. 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; retaining key executives and the possible need in the future to hire and retain key executives; 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.