Beacon Power

8/14/2019 Beacon Power

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Beacon Power CorporationBeacon Power Corporation(NASDAQ: BCON)(NASDAQ: BCON)

Energy StorageEnergy Storage--based Grid Servicesbased Grid Services

September 2008September 2008


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Safe Harbor Statement

This presentation contains forward-looking statements, including the

Company's beliefs about its business prospects and future results ofoperations. These statements involve risks and uncertainties. Amongthe important additional factors that could cause actual results to differmaterially from those forward-looking statements are risks associatedwith the overall economic environment, the successful execution of the

Company's plan of operation, changes in the Company's anticipatedearnings, continuation of current contracts, changes in gaming andother applicable regulations, and other factors detailed in thecompany'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 andtherefore those forecasts speak only as of the date they are given. TheCompany does not undertake to update them; however, it may choosefrom time to time to update them and if it should do so, it willdisseminate the updates to the investing public.


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Beacon Investment Opportunity

Recurring revenue with high margins

Favorable pricing expectations

First commercial revenues expected in Q408

Global market opportunity Substantial barriers to entry for other sustainable

technologies

Patent protected technology

Recycle surplus electricity with minimal cost

then monetize it for grid efficiency


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Because we recycleenergy, our operating costs are

low and we expect EBITDA margins of up to 80%

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Our Business Model

Provide servicesto grid operators:

When there is too much power on the grid, we storeit in our advanced flywheel energy storage system

When there is not enough power on the grid, wedischarge our system and put power into the grid

This balancing service, called frequency regulation,is required by grid operators around the world


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What is Frequency Regulation?

(A two-minute animation)

Also available on www.beaconpower.com


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Build, Own and Operate Business Model

Selling services that are essentialto the grid (24/7)

Serving large open andestablished markets

Endorsed by the customer

(i.e. grid operators) Achieves carbon reduction

NOT dependent on utilities

NOT dependent on selling equipment

NOT dependent on an emerging market

NOT dependent on subsidies


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Beacon Smart Energy Matrix Advantages

Up to 100 times faster than incumbents

Available separately without generation

High reliability; 20-year projected life

Lowest operational cost

Significant carbon emissions reduction

Frees up generation capacity (1-3% potential)


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Flywheel Emission Advantage

Metric

TonsCO2

From KEMA study: 20 MW of Regulation over 20-year operating life

0

100,000

200,000

300,000

400,000

500,000

600,000

Coal Peaker Coal Baseload Gas Peaker Gas Baseload Pumped Hydro Beacon

Flywheel

Over 80% reduction in CO2 emissions vs. present methods

8hr/day

8hr/day

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Flywheel Product Evolution

Gen 1

2000

Gen 2

2001

Gen 3

2004

Gen 4

2006/2007

Over 500,000 hours of operationin the field

Technology is product of 5 years ofR&D and testing at a cost of $160 MM

Only company with the technologyto produce flywheels that can beapplied to the electrical grid

2006/2007

Successful demonstrationsin California and New York

2008

Commercial operationand service revenue

starts


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1st Commercial Plant - Tyngsboro, MA

First MW 90% completeoperational in September

Up to 5 MW in Tyngsboro, MAat Beacons headquarters

ISO-NE pilot program andfirst service revenuesscheduled to beginNovember 18

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First 20 MW Plant New York

Interconnection Processwith NYISO

System impact studiesexpected by year-end

Site permitting

Environmental and specialuse permits approved in July

Land purchased in July

ISO developing control algorithm to

optimize performance

First commercial 20MW flywheel energy storage plant

under development in Stephentown, NY

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U.S. Markets for Regulation Services

Open frequency regulation markets: >$680 million (2007)

Midwest ISO market expected to open in 2008

With MISO, open markets should be >$1 billion

CaliforniaISO

ERCOT ISO

NY ISO ISO

New England

PJMInterconnection

MISO


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Open U.S. Markets for Regulation

N/A

$37

N/A(new open

market)

$61

$62

$48

AveragePricing*

Not FERC regulated less transparent Highest wind penetration

Approx 100and growing

ERCOT

MarketAverage MWMarket Size Market Status and Beacon Developments

ISO NE 130 Pilot program unanimously approved August 5, 2008,

scheduled to begin on November 18, 2008

NYISO 220 Tailored market rules now under review by stakeholders May also qualify to participate sooner as a generator,

but with less favorable economics

PJM 1000 Market open

MISO Est. 1000(new open

market)

FERC ordered new tariff for Energy Storage Resources MISO filed tailored tariff in May 2008 Expect open market by June 2009

CAISO 360 Stakeholder process developing tailored market rules

for Energy Storage Resources Expect higher price for fast response

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* Average 12 month prices paid by ISO/RTO per MW service hour through July 08


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The California ISO Study

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The California ISO study predicted that half of all renewableelectricity generated would come from wind power

There will be an increased need for frequency regulation as wind

power becomes a greater percentage of total electrical supply

Source: Integration of Renewable Resources. California Independent System Operator. November 2007.

Increased Need for Regulation from Wind PowerTotal MW Produced at 20% Renewable Penetration

Geothermal,

3,041MW Wind, 7,741MW

Biomass,

1,088MW

Residential Solar,

633MWConcentrated

Solar, 1,411MW


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Compelling Economics

20 MW plant cost goal = $25 million (2010)*

*First plant will be approximately 2x

Up to 80% EBITDA margin zero fuel consumed,high efficiency and minimal maintenance required

Equipment designed for 20-year life

20 MW plant revenue/year = approx. $10 million

(Based on 2008 NY-ISO pricing)

Additional revenue streams from carbon savings


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Historical Balance Sheet

3,5795,155Total Liabilities

945Other Liabilities

374200Other Assets

1,9822,698Other Current Assets

$ 27,100

4,210

32,255

12,673

$ 16,685

June 30,2008

Long-Term Debt

39,778Total Assets

December 31, 2007(in thousands)

$ 36,199Total Stockholders Equity

3,579Current Liabilities

7,004Property and Equipment, net

$ 30,417Cash and Cash Equivalents

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Historical Income Statement

(12,163)

(12,682)12,805

4,748

123

$ 969

2006

Year Ended 12/31

(12,918)

(13,620)13,760

8,387

141

$ 1,389

2007

(6,413)(10,975)Operating Loss

Six Months Ended 6/30

(10,719)

11,020

6,036

44

$ 48

2008

(6,156)Net Loss

3,483R&D Expense

2007(in thousands)

6,443Total Operating Expenses

30Gross Profit

$ 842Revenue

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Clean-Tech Growth Opportunity

Key Take-Aways:

Clean-Tech Achieves carbon reduction

Disruptive Technology

Recycle surplus electricity Increases efficiency of electrical powergrids

Market Leader No direct competitors using energy storage

Substantial Barriers to Entry Serving large open and established markets

Endorsed by the customers, i.e. grid operators

Now Going Commercial After extensive R&D and testing, and vetting and approval by customers

Open U.S. Grid Market exceeds $1 billion


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Beacon Power CorporationBeacon Power Corporation(NASDAQ: BCON)(NASDAQ: BCON)

Energy StorageEnergy Storage--based Grid Servicesbased Grid Services

September 2008September 2008

Documents

Beacon Power