CARB Certifies Diesel Capstone MicroTurbine for Commercial Hybrid Electric Vehicles; Capstone's Diesel Engine Proven Cleaner than Best CARB-Certified Natural Gas Engine.

Business Editors & Automotive Writers

CHATSWORTH, Calif.--(BUSINESS WIRE)--March 21, 2001

The California Air Resources Board (CARB) has certified Capstone Turbine Corp.'s (Nasdaq:CSPT) diesel-fueled microturbine power system for use in commercial hybrid electric vehicles (HEVs).

Using a CARB-approved cycle for testing emissions of microturbine systems, the nitrogen oxide (NOx) emissions of the 30-kilowatt Capstone MicroTurbine using common diesel No. 2 is 0.70 grams per brake horsepower-hour, more than 75% cleaner than the lowest-emitting CARB-certified heavy duty bus and truck diesel No. 2 engine.

Particulates (diesel "soot") were measured at 0.01 g/bhph, a level comparable to the best natural-gas-fueled heavy duty bus and truck engines. "Diesel particulates have been characterized as a carcinogen by CARB," said Dr. Ake Almgren, president and chief executive officer of Capstone Turbine. "This 0.01 figure is near the lower limit of detectability. It is 80% lower than CARB's most stringent requirements, so we are very pleased with that result."

Capstone last month announced CARB certification of its gaseous-fueled microturbines for hybrid electric vehicles. Emissions of the microturbine, using either compressed natural gas (CNG) or propane as fuel, were also significantly lower than all other CARB-certified engines using those fuels.

Capstone's microturbine engine achieves these low levels with none of the post-combustion pollution controls, catalysts or particulate traps used by other CARB-certified engines. In hybrid electric buses and other commercial HEV applications, the Capstone MicroTurbine serves as an onboard generator to replenish the vehicle's batteries. This greatly enhances range and passenger capacity, enabling a bus, truck or service vehicle to operate for a full service day without recharging. Fuel economy is approximately double that of a conventional engine vehicle.

"Our diesel microturbine has almost half the NOx emissions of the best CARB-certified CNG engine. There is a prolific diesel infrastructure in North America and abroad. And while our CNG and propane systems are even cleaner, many transit authorities and fleet operators simply do not have ready access to these alternate fuels. Now there is no need for them to wait for cleaner fuels. With Capstone-Energized HEVs, those operators can now use diesel fuel and have a cleaner-than-CNG fleet," Almgren said.

Hybrid Electric Vehicle (HEV) backgrounder (photos at www.microturbine.com/carb)

"This CARB certification proves that the Capstone MicroTurbine is the world's cleanest burning heavy duty bus and truck engine, regardless of fuel type," said Capstone HEV Business Development Manager Mark Aramli. "Just as importantly, this is road-proven technology that has been in operation for years and tens of thousands of real-world revenue-service miles. We now have single or twin-pack systems capable of powering mini-buses to full-size 40-foot transit buses."

In addition to being cleaner than traditional bus engines, the Capstone MicroTurbine is also smaller, lighter and quieter. With a single moving assembly, no gearbox, no pumps or mechanical subsystems, and no need for oil, lubricants or coolants, better reliability and greatly reduced maintenance has been demonstrated on Capstone-Energized(TM) buses operating in the United States and abroad.

The first Capstone-Energized hybrid bus was built by Advanced Vehicle Systems (www.avsbus.com) of Chattanooga, Tenn., and went into public service in 1997. Two years later, Tempe, Ariz., placed what was then the world's largest hybrid electric bus order: 31 buses with an option to buy 169 more. AVS has delivered other Capstone-Energized hybrid electric buses to Atlanta, Tampa, Fla., the Washington D.C. area and elsewhere.

The Los Angeles Department of Transportation (www.ladottransit.com) has taken delivery of three 30-foot Capstone-Energized hybrid buses and will soon receive an additional 32-foot Capstone-Energized bus. The 30-foot buses are currently in commercial revenue service on LADOT's Lincoln Heights -- Chinatown service in downtown Los Angeles. ISE Research (www.isecorp.com) recently won the University of California at San Diego "Most Innovative New Product" business award for their integration of Capstone MicroTurbines into the LADOT buses.

In New Zealand, three Capstone-Energized buses have been in public service in the city of ChristChurch for a year. Tokyo Electric Power Co. (www.tepco.co.jp/index-e.html) recently ordered delivery of one of these Designline (www.designline.com) buses for public service evaluation by transit operators throughout Japan.

In the first commercial shipment of microturbines into mainland China, a major manufacturer of electric vehicle charging stations has partnered with a bus manufacturer, the city of Beijing and several universities to build 10 Capstone-Energized 40-foot buses by year-end. The first bus, which, like the LADOT buses, will use two 30-kilowatt Capstone MicroTurbines, is expected to enter public service in about a month. Several of the others will use Capstone's new 60-kilowatt engine.

Beyond bus applications, Capstone MicroTurbines are currently being integrated into a Fuji (www.fhi.co.jp) refuse truck, a Solectria (www.solectria.com) parcel delivery van that will be used by the Boston post office, a Tomoe Electronic Industrial TurboLoco(TM) light-rail tunneling vehicle, and, in its first passenger vehicle application, Hyundai (www.hyundai-motor.com) will work with Enova Systems (www.enova.com) to use a Capstone MicroTurbine in one of its Santa Fe sport utility vehicles and in medium-sized buses.

About Capstone Turbine

Capstone Turbine Corp. (www.microturbine.com)(Nasdaq:CPST) -- winner of Financial Times Energy's (www.ftenergy.com) 2000 Global Energy Award for Most Innovative Commercial Technology -- is a leading producer of low-emission microturbine systems. In 1998, Capstone was the first to offer commercial power products utilizing microturbine technology, the result of more than ten years of focused research. Worldwide, more than 1,000 commercial production Capstone MicroTurbine systems serve, among others, the following applications:

-- Hybrid electric vehicles (HEVs): onboard generation

-- Resource recovery: converting oilfield and biomass waste gases into
electricity

-- Micro-cogeneration: combined heat/power/chilling solutions

-- The 9s market: power quality and reliability

This news release contains "forward-looking statements," as that term is used in the federal securities laws, about Capstone's business, including statements regarding expected growth in applications over the next several years. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," "we see" or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. These risks and uncertainties include those risks, uncertainties, marketplace competitors and risk factors identified, among other places, under "Risk Factors" in Capstone's registration statement on Form S-1, Securities and Exchange Commission File No. 333-48524. Capstone cautions you not to place undue reliance on these statements, which speak only as of the date of this release. Capstone undertakes no obligation to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Note to Editors: More information on items noted above is available at:

UCSD Most Innovative Award to ISE: http://www.microturbine.com/whatsNew/Data/ISE-award2.pdf

TEPCO and Designline bus: http://www.microturbine.com/whatsNew/tepco.htm

Capstone-Energized Hyundai Santa Fe: http://www.microturbine.com/whatsNew/enova.htm

Boston Post Office parcel van: http://www.microturbine.com/whatsNew/timelessTech.html

Capstone's new 60-kilowatt system: http://www.microturbine.com/whatsNew/pressrelease.asp?article=48

FT Energy Award: http://www.microturbine.com/whatsnew/pressrelease.asp?article=56

Note: High-resolution photos available at: http://www.microturbine.com/carb