EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: James Spiezio
Beacon Power Corporation
978-694-9121
spiezio@beaconpower.com
CALIFORNIA ENERGY COMMISSION AWARDS Beacon Power
$1.2 MILLION CONTRACT FOR MAJOR ENERGY STORAGE PROJECT
Beacon's Flywheel-based Smart Energy Matrix System Prototype Will Be
Demonstrated in Frequency Regulation and Grid Stability Application
WILMINGTON, Mass. - February 14, 2005 -- Beacon Power Corporation (Nasdaq:
BCON), a company that designs advanced products and services to support more
reliable electricity grid operation, today announced that it has executed a
contract with the California Energy Commission to demonstrate an advanced energy
storage solution for frequency regulation and grid stability. At a business
meeting on December 1, 2004, the California Energy Commission had given its
approval to the project, leading to contract negotiations that have now been
finalized. The contract is expected to produce approximately $1.2 million of
revenue, with the majority of it in 2005.
Under the contract, Beacon Power will develop and install a system to
demonstrate the potential benefits of using flywheel energy storage to provide
frequency regulation of the grid, a service required by all grid operators. A
successful demonstration of frequency regulation with the California Independent
System Operator (ISO) will also serve to demonstrate the system's technical and
market feasibility in a large, important, growing market - stabilization of the
grid. The contract calls for the system to be delivered and installed during the
first half of 2005.
"Flywheel-stored power, which has long been in use but not yet for grid
applications, could offer the California ISO an alternative to keeping power
plants on spinning reserve to balance the system," said Energy Commissioner Art
Rosenfeld. "When proven viable, the technology can help save the grid operator
money on ancillary services," added Rosenfeld, who is the presiding member of
the Energy Commission's RD&D Committee.
Bill Capp, Beacon Power president and CEO, said, "This agreement with the Energy
Commission is another opportunity for Beacon to show how our flywheel energy
storage solutions can provide superior frequency regulation services and improve
grid reliability. We are already working under contract to NYSERDA in New York
to deliver a similar demonstration system. We're convinced that our Smart Energy
Matrix solution would provide a competitive alternative to conventional
regulation services, and we applaud the vision and leadership of these energy
authorities in California and New York."
Grid operators, such as the California Independent System Operator (ISO),
purchase frequency regulation services every day that are equivalent to 1-2% of
the amount of energy used daily. In 2003, the value of regulation services
purchased by four U.S. regional grid operators in open power markets exceeded
$400 million. The Beacon Smart Energy Matrix is being specifically designed to
address this sizeable and growing market with better performance and greater
cost effectiveness than existing methods.
"Flywheel technology has the potential to provide a rapid injection of energy
for several minutes to help keep the grid stable when we have a contingency --
for example, some kind of problem that causes a big power plant to drop off
line," said California ISO Interim Chief Operations Officer Jim Detmers. "By
helping out with this demonstration project, the ISO is fostering technology
that shows real promise to improve the control and reliability of the grid."
The demonstration will be a one-tenth-power prototype of Beacon's planned
megawatt-level system known as the Smart Energy Matrix. It is designed to
provide grid frequency regulation at a site located in San Ramon, California.
The demonstration will integrate Beacon flywheels and associated power
electronics into the local distribution grid. The project will also focus on
communication with and control of the demonstration-scale system by the
California ISO. Beacon Power is teaming with Connected Energy Corporation of
Rochester, New York, to develop the intelligent monitoring and control systems
that will be used in this California project, as well as two previously
announced in New York State.
"Through these demonstrations, we'll be able to show how advanced energy storage
solutions like ours can help operators manage a `smarter,' more resilient
electricity grid," Capp continued. "We believe that our technology will be more
responsive, more sustainable, and ultimately more cost-effective, and we look
forward to a successful demonstration in two very important states in the coming
months."
About Frequency Regulation
One of the most challenging aspects of today's electricity grid is that the
amount of power generated and the amount consumed must be in exact balance at
all times. When imbalances occur, the frequency of electricity (60 hertz in the
U.S.) that end users require will not be maintained, which adversely affects
grid stability. The constant balancing of power demand and production to
maintain frequency is called frequency regulation.
Beacon's Smart Energy Matrix is a flywheel-based energy storage system that is
intended to be a long-life, environmentally friendly solution for frequency
regulation, with no fuel consumed and no emissions generated. The equipment
could be located nearly anywhere, including at a substation or within the
distribution system, where additional benefits such as voltage regulation,
backup power, or reactive power can also be provided for even greater value.
The evolution of deregulated electricity markets has created an opportunity for
new companies and technologies to compete to provide frequency regulation
services to system operators. Beacon Power believes it is well positioned to
offer a unique and sustainable technology solution to provide this service cost
competitively, in a dynamic and growing market that has historically had limited
options.
About Beacon Power Corporation
Beacon Power Corporation (www.beaconpower.com) designs sustainable energy
storage and power conversion solutions that would 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,
utility-grade flywheel-based energy storage solution that would provide
sustainable power quality services for frequency regulation, and support the
demand for reliable, distributed electrical power. Beacon is a publicly traded
company with its research, development and manufacturing facility in the U.S.
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 on a commercial basis; the company has only
recently entered into the renewable energy market through its inverter products,
and hence, has only limited experience in this sector; 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, 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; 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; the power of controlling shareholders and the limited ability
of others to influence the outcome of matters put to the vote of shareholders.
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.