1. Transforming the Electric Grid with Storage
Beacon Power Corporation
Flywheel Energy Storage
Chet Lyons, Director of Marketing and Sales
April 15, 2011

2. Safe Harbor Statement
This presentation contains forward-looking statements, including the Company's beliefs about its business prospects and future results of operations. These statements involve risks and uncertainties. Among the important additional factors that could cause actual results to differ materially from those forward-looking statements are risks associated with the overall economic environment, the successful execution of the Company's plan of operation, changes in the Company's anticipated earnings, continuation of current contracts, changes in energy and other applicable regulations, and other factors detailed in the company's filings with the Securities and Exchange Commission, including its most recent Forms 10-K and 10-Q. In addition, the factors underlying Company forecasts are dynamic and subject to change and therefore those forecasts speak only as of the date they are given. The Company does not undertake to update them; however, it may choose from time to time to update them and if it should do so, it will disseminate the updates to the investing public.

3. 20 MW plant in Stephentown, NY
Company Overview
Supplier of fast response frequency regulation using flywheel energy storage:
Merchant service provider
Seller of turnkey plants
Operating in ISO-NE pilot program since November 2008
1 - 3 MW
Constructing 20 MW plant in NY; Received $43 million DOE loan guarantee; $2 million NY grant
14 MW operating
Developing 20 MW plant in PJM; Awarded $24 million DOE grant
Flywheels in ISO-NE
20 MW plant in Stephentown, NY

4. 1st 20 MW Plant — NYISO
STEPHENTOWN, NY – 14 MW operating, 20 MW to be complete in Q2 2011
Highlighted by the White House as being one of the
100 Recovery Act Projects that are Changing America

5. Fast response storage can reliably and cost effectively meet this need
ISO/RTOs forecast need for more Regulation with increased Renewables
Additional need for Regulation with more wind:
ISO-NE increase by 282% with 20% wind
CAISO increase by 300% with 33% wind
NYISO increase by 60% with 10% wind
PJM increase by 200% with 20% wind
*New England Wind Integration Study, 12/5/2010
Fast response storage can reliably and cost effectively meet this need

6. Regulating the Grid of the Future
CONVENTIONAL
SMART GRID + +
Regulation provided by generators varying output
Decreases efficiency
Increases fuel consumption
Requires more maintenance
Increases emissions
Store energy when supply exceeds load; inject energy when load exceeds supply
High round trip efficiency
Low operating cost
Near instantaneous response
Zero direct emissions

7. Flywheel Emissions Advantage
Metric Tons CO2
From KEMA study: 20 MW of Regulation over 20-year operating life
8hr/day
8hr/day
Dramatically Lower Emissions

8. Fast Regulation: Speed Matters…
Slow ramping Generator
Fast response
Flywheel Energy Storage
Advanced Storage provides fast accurate response
Sources:
- Kirby, B. “Ancillary Services: Technical and Commercial Insights.” Wartsilla, July, pg. 13

9. Data from ISO-NE pilot project shows Fast Regulation provides more Value
1 MW of Regulation
Flywheel
Generator
ACE Corrected
0.48 MWh
0.18 MWh
Against ACE
0 MWh
-0.07 MWh
Net ACE Correction
0.11 MWh
Fast resources provide more ACE Correction per MW;
Enabling less total procurement and cost

10. Regulatory Issues: Removing Market Barriers to Storage
In Feb 2007 FERC issued Order 890 which mandated inclusion of new technologies in Regulation market
Market barriers existed for storage to provide regulation
Market Entry Status
Midwest ISO, NYISO and PJM: Open
Made tariff changes necessary to integrate energy storage resources into their Regulation markets
CAISO Board of Governors voted on Feb. 3, 2011 to implement market rules to fully open their Regulation market to storage resources
ISO-NE began Alternative Technologies Regulation Pilot Program in 2008; plan to propose permanent market rule changes to stakeholders in Q2 2011
ERCOT (not under FERC jurisdiction) created Emerging Technologies Working Group in 2010; reviewing tariff changes

11. Regulatory Issues: Pay-for-Performance
FERC issued NOPR to reform Frequency Regulation Compensation (February 17, 2011)
FERC is concerned that current market rules “may be unjust and unreasonable because faster- ramping resources are compensated at the same level as slower ramping resources, even though they can respond more quickly and provide more ACE correction.”
Two-part Regulation payment: Capacity + Performance
1 MW of Regulation
Flywheel
Generator
ACE Corrected
0.48 MWh
0.18 MWh
Against ACE
0 MWh
-0.07 MWh
Net ACE Correction
0.11 MWh
Mileage
25 MW miles
8 MW miles
In all RTOs (except ISO-NE) both resources are currently compensated the same; NOPR mandates that fast response resources are paid for value

12. Regulatory Issues: State Policies
Massachusetts: Storage included in 2008 Green Communities Act and Green Jobs Bill
Created Alternative Energy Portfolio Standard for storage
Defined storage as a clean energy technology
““Clean energy research”, advanced and applied research into new clean energy technologies including: solar photovoltaic; solar thermal; wind power; geothermal; wave and tidal energy; advanced hydropower; energy storage for automotive applications; energy storage for grid applications;…”
California: AB 2514
Requires CA PUC to determine target amounts for each LSE to procure energy storage
Ohio, Hawaii, Pennsylvania, Connecticut, North Carolina and Oklahoma
Energy storage can be counted towards RPS/RES/AES goals