CARB Certifies World's First Turbine Engine for Commercial Vehicle Use; Capstone MicroTurbines Serve as Propulsion Power Generator for Hybrid-Electric Vehicle Applications.

Business Editors & Automotive Writers

CHATSWORTH, Calif.--(AutomotiveWire)--Feb. 9, 2001

The California Air Resources Board (CARB) has certified the world's first turbine engine for use in commercial hybrid electric vehicles.

Using a CARB-approved test cycle for testing emissions of microturbine systems, the nitrogen oxide (NOx) emissions of the alternative-fueled 30-kilowatt Capstone MicroTurbine is 0.26 grams per brake horsepower-hour using CNG (compressed natural gas), 0.53 using LPG (propane). Particulates using either fuel are virtually undetectable.

In comparison to emissions figures published in CARB's database, the natural gas-fueled Capstone MicroTurbine(TM) power system has 80% fewer NOx emissions than the next-lowest-emitting CARB-certified heavy-duty bus and truck CNG engine.

"CARB-certification of the ultra-low emissions of our microturbine for hybrid electric vehicles is a most important step forward. This is clear validation that there is a solution -- available and on the road today -- that meets upcoming California and EPA (Environmental Protection Agency) emissions requirements, a claim no other heavy-duty engine manufacturer can make," said Capstone President & Chief Executive Officer Dr. Ake Almgren.

In hybrid electric vehicle applications, the lightweight Capstone MicroTurbine serves as an onboard generator to recharge the hybrid's batteries, greatly extending range and payload capacity. To date, Capstone MicroTurbines have been integrated into buses operating in cities in the United States and abroad.

Certification to a CARB-defined test cycle is essential for widespread engine acceptance not only in California, but throughout the nation. Many vehicle manufacturers, transit authorities and others, even in countries outside of North America, look to CARB-certified emissions performance to make their long-range purchasing decisions.

A diesel-fueled version of the Capstone MicroTurbine is currently available and EPA-sanctioned for sale in all states other than California. Capstone has submitted this diesel model for CARB certification.

Hybrid Electric Vehicle (HEV) background

(photos at www.microturbine.com/carb)

"Commercialization of hybrid bus technology has opened the playing field for nontraditional transportation propulsion sources, such as microturbine engines," said Capstone HEV Development Manager Mark Aramli. "This CARB certification unequivocally proves that the Capstone MicroTurbine is the world's cleanest-burning heavy-duty bus and truck engine, even without the post-combustion exhaust treatment utilized by other commercial engine manufacturers.

"The Capstone MicroTurbine HEV engine is road-proven technology that has been in operation for years and tens of thousands of real-world revenue-service miles," Aramli said.

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. Fuel consumption is about half that of a comparable nonhybrid bus.

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. Tempe test operated 10 of the buses throughout a scorching summer last year with no microturbine-related problems. AVS has delivered other Capstone-Energized hybrid electric buses to Atlanta, Tempe, the Washington D.C. area and elsewhere.

The Los Angeles Department of Transportation (LADOT) has taken delivery of three 30-foot Capstone-Energized hybrid buses and is soon expected to receive an additional 32-foot Capstone-Energized bus. One or more of the 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 its integration of Capstone MicroTurbines into the LADOT buses.

In New Zealand, four Capstone-Energized buses have been in public service in the city of ChristChurch for nearly a year. Tokyo Electric Power Company (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 Capstone MicroTurbines, is expected to enter public service in about two months. Several of the others will use Capstone's new 60-kilowatt engine.

Beyond bus applications, Capstone MicroTurbines are currently being integrated into a Fuji refuse truck, a Solectria (www.solectria.com) parcel delivery van that will be used by the Boston post office, a Tomoe Electronic Industrial TurboLoco 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.

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 10 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," 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 and risk factors identified, among other places, under "Risk Factors" in Capstone's registration statement on Form S-1, SEC File No. 333-48524. Capstone cautions readers 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: 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