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

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.

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

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

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

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

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

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, 2007. pg. 13

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

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

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

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