Active Power Ships First CleanSource XR Unit

AUSTIN--(BUSINESS WIRE)--Dec. 16, 2004

Active Power, Inc. (NASDAQ: ACPW) today announced the shipment of its first CleanSource(R) XR evaluation unit to one of the largest producers of electricity in the United States. The CleanSource XR unit will be tested under a variety of conditions for both backup power and load-shifting applications.

CleanSource XR stores energy in the form of heat and compressed air. When power is needed, the compressed air is routed through a thermal storage unit to acquire heat energy. The heated air spins a simple turbine-alternator to produce 5 to 85 kW of electric power for up to several hours. Unlike commonly used lead-acid batteries and engine-generators, CleanSource XR is non-toxic and produces zero emissions.

"With its ability to provide battery-free and emission-free power for minutes to hours, CleanSource XR represents a major step forward in the field of energy storage," said Joe Pinkerton, Chairman and CEO of Active Power, Inc. "While our initial focus is backup power, we are excited about the commercial potential of using CleanSource XR to help relieve the strain on the utility grid and make better use of the generation assets utilities have in place today."

Active Power will ship additional CleanSource XR evaluation units over the next few months to customers interested in both backup power and utility load-shifting applications. Evaluation unit testing will continue through the first half of 2005. Volume production capabilities and product sales of CleanSource XR are expected in the second half of 2005.

With over 150,000 kilowatts installed worldwide and ten million hours of field operation, Active Power's CleanSource products are a proven alternative to problematic battery-based systems. CleanSource flywheel technology uses the kinetic energy from a constantly spinning steel flywheel to power a critical load during a utility failure until a backup generator is brought on line. Active Power offers a broad range of battery-free power quality solutions: the CleanSource DC product line, which is compatible with all leading UPS brands and is available in the 100 - 2000 kW range; the CleanSource UPS product family, available from 65 kVA to 3600 kVA; and now CleanSource XR, ranging from 5 kW to 85 kW. Recognized by Frost & Sullivan for its ability to satisfy customer needs with new and innovative products, Active Power continues to rapidly expand its product line to address the needs of new market segments and geographies. For more information visit www.activepower.com, e-mail info@activepower.com or call toll free 877-BUYACPW (289-2279).

About Active Power:

Active Power, Inc. (www.activepower.com) designs, manufactures and markets battery-free power quality products that provide the consistent, reliable electric power required by today's digital economy. An ISO 9001-registered company, Active Power is the first to commercialize a flywheel energy storage system that provides a highly reliable, low-cost and non-toxic replacement for lead-acid batteries used in conventional power quality installations.

Cautionary Note Regarding Forward-Looking Statements:

This release may contain forward-looking statements that involve risks and uncertainties. Any forward looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

Active Power and our Active Power logo and CleanSource are registered trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.

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