Beacon Power Breaks Ground on 20-Megawatt Flywheel Energy Storage Plant

Beacon Power Corporation (Nasdaq: BCON), was joined today by state and
local officials at a formal groundbreaking event in Stephentown, New York,
signaling the start of construction for the nation's first full-scale
20-megawatt (MW) flywheel frequency regulation plant.

Speakers at the event included Garry Brown -- Chairman of the New York
Public Service Commission; Kimberly Harriman -- Assistant Secretary of
Energy, Office of Governor David A. Paterson; Rana Mukherji -- Vice
President, Market Structures, New York Independent System Operator; Peter
Douglas -- Director, Energy Efficiency Research, New York State Energy
Research and Development Authority; and David Connors -- Regional
Representative, Office of U.S. Senator Kirsten E. Gillibrand.

Stephen G. Whitley, President and CEO of the New York Independent
System Operator, commented: "New York's competitive electricity market
attracts investments in new energy technologies, such as Beacon Power's
flywheel energy storage system, that build the smarter grid of tomorrow.
Advances in energy storage are a key component in expanding renewable energy
across New York while sustaining a reliable power grid for New York
consumers."

"Today's groundbreaking is a perfect example of federal, state and
private investment coming together to ensure that the nation's first plant
of this kind will be built in Stephentown," said U.S. Senator Kirsten E.
Gillibrand. "This new flywheel frequency regulation plant will advance
stable, reliable and efficient electricity grid operation in the state. I
look forward to continuing to work with Beacon Power as they move forward
with this investment."

"This is a truly significant milestone in our company's history, and
it represents equally important progress toward the development of a smarter
grid in New York State and the nation in general," said Bill Capp, Beacon
president and CEO. "Our flywheel systems provide an essential
grid-stabilizing service, and they do it faster and much more efficiently
than today's conventional methods, most of which consume fossil fuel and
produce harmful CO2 greenhouse gas emissions. We're grateful for the
consistent support we've received from the organizations represented here
today, as well as from the U.S. Department of Energy, and we look forward to
playing our part in helping this state build a cleaner and more secure
energy future."

Initial construction work on the 20 MW plant will start this month,
including site clearing, adding drainage and fencing, and some landscaping.
Full construction is expected to begin in late Q1 2010, and be completed in
16 to 18 months.

Flywheel Energy Storage and Frequency Regulation

Frequency regulation is an essential grid service that is performed by
maintaining a tight balance between electricity supply and demand. Beacon's
20 MW plant has been designed to provide frequency regulation services by
absorbing electricity from the grid when there is too much, and storing it
as kinetic energy in a matrix of flywheel systems. When there is not enough
power to meet demand, the flywheels inject energy back into the grid, thus
helping to maintain proper electricity frequency (60 cycles/second).

According to a 2008 study by Pacific Northwest National Laboratory, a
DOE research institution, 1 MW of fast-responding flywheel-based regulation
can be expected to provide the equivalent of 2 MW of conventional
slow-responding regulation, based on a mix of conventional regulation
resources like those used in California. In areas with less hydropower-based
regulation than California, the comparative advantage of flywheels may be
even greater.

Thanks to their ability to recycle electricity efficiently and act as
"shock absorbers" to the grid, Beacon's flywheel plants will also help
support the integration of greater amounts of renewable (but intermittent)
wind and solar power resources. Unlike conventional fossil fuel-powered
generators that provide frequency regulation, flywheel plants will not
consume any fuel, nor will they directly produce CO2 greenhouse gas
emissions or other air pollutants, such as NOX or SO2.

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 Stephentown, 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.