Beacon Power Applies for DOE Grants to Fund up to 50% of Two 20 MW Energy Storage Plants

Also Positions to Raise Capital as Needed
TYNGSBORO, Mass.--(Business Wire)--
Beacon Power Corporation (Nasdaq: BCON) announced that on August 26th it applied
to the U.S. Department of Energy (DOE) for grants totaling $46.7 million to
support funding of the Company`s next two 20 MW flywheel energy storage plants.

Beacon applied under the Smart Grid Demonstrations program of DOE Funding
Opportunity Announcement DE-FOA-0000036, which authorizes approximately $615
million that DOE expects to allocate across seven Areas of Interest. The Company
submitted two applications under Area of Interest 2.2, "Frequency Regulation
Ancillary Services." DOE anticipates making grant awards within this Area for
one or two storage-based frequency regulation plants totaling an aggregate
amount of up to $50 million.

One of the Company`s proposed plants would be located in Glenville, New York, at
a site within the New York Independent System Operator (NYISO) region. The other
plant is located within an area operated by the PJM Interconnection (PJM).

Beacon Power believes its proposed plants meet or exceed every DOE grant program
performance requirement. These include fast response, zero direct CO2 emissions,
10-year minimum system life and demonstrated frequency response capability. DOE
demonstrated its support of Beacon`s technology in July by making a conditional
loan guarantee commitment for the Company`s first 20 MW energy storage plant,
planned for Stephentown, New York. As with all such applications, there is no
assurance that DOE will approve either or both grant applications, or that if
approved, the grants would be for the same amount or on the same terms as
requested by the Company.

Beacon Power president and CEO, Bill Capp, commented, "Beacon has now reached
the point where we are ready to deploy our technology on a broad commercial
basis. We are currently operating two megawatts of our Smart Energy Matrix
flywheel energy storage systems on the New England power grid. We`ve proven that
the technology is effective at providing frequency regulation services and that
we can generate revenue. We look forward to DOE making its grant awards, which
they anticipate will begin in December 2009."

Beacon continues to explore a number of possibilities for obtaining a
significant portion of the additional capital required to build its plants from
strategic partners. However, to maximize its financial flexibility, the Company
filed a universal shelf registration statement on September 1, 2009, on Form S-3
with the Securities and Exchange Commission (SEC). The shelf registration
statement must first be declared effective by the SEC. Upon being declared
effective, the shelf registration would permit Beacon to offer and sell from
time to time up to $60 million of common stock, preferred stock, warrants, units
or other types of equity securities described in the registration statement in
one or more future public offerings.

Beacon does not currently have any commitments or intentions to sell securities
under this registration statement. Future offerings thereunder would be made
only by means of a written prospectus or other permitted documents. In that
event, the Company would file a prospectus supplement with the SEC outlining the
type of securities, amounts, prices, use of proceeds and other terms. The terms
of any future offering would be established at the time of such offering subject
to market conditions.

A registration statement relating to these securities has been filed with the
SEC, but has not yet become effective. Securities may not be sold, nor may
offers to buy be accepted, prior to the time that the registration statement
becomes effective. This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any sale of
these securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities law of any
such state or jurisdiction.

About the DOE Smart Grid Demonstration Projects

Projects under DOE`s Funding Opportunity Announcement (FOA) will be funded, in
whole or in part, with funds appropriated by the American Recovery and
Reinvestment Act of 2009 ("Recovery Act"). The goal of the FOA is to encourage
regionally unique technology demonstrations to verify the viability of smart
grid technology, quantify smart grid costs and benefits, and validate new smart
grid business models, at a scale that can be readily adapted and replicated
around the country. Consistent with the purpose of the Recovery Act, the DOE is
expected to give selection preference to projects that can be completed
expeditiously.

These demonstration projects are also intended to support the goals of the
Energy Storage Competitiveness Act which includes the accelerated development
and strengthening of energy storage manufacturing capabilities of the U.S. and
the establishment of regional solutions and best practices in implementing smart
grid technologies.

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 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, financial performances, and project development. These
"forward-looking" statements are identified by the use of terms and phrases such
as "will," "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`s expectation. These factors include: a short operating
history; a history of losses and anticipated continued losses from operations;
uncertainties relating to the success of Beacon`s DOE grant proposals; the
complexity and other challenges of arranging project financing and resources for
one or more frequency regulation power plants, including uncertainty about
whether we will be successful in finalizing the DOE loan guarantee support for
our New York facility, or complying with the conditions or ongoing covenants of
that support; a need to raise additional equity to fund the project and Beacon`s
other operations in uncertain financial markets; conditions in target markets,
including the fact that some ISOs have been slow to comply with FERC`s
requirement to update market rules to include new technology such as the
Company`s; our 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; 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 generally.
These factors are elaborated upon and other factors may be disclosed from time
to time in Beacon Power filings with the Securities and Exchange Commission.
Beacon Power expressly does not undertake any duty to update forward-looking
statements.

Beacon Power Corporation
James Spiezio, 978-694-9121
spiezio@beaconpower.com
or
Gene Hunt, 978-661-2825
hunt@beaconpower.com

Copyright Business Wire 2009