Beacon Power Corporation designs, develops,
and commercializes advanced products and
services to support stable and reliable electricity
grid operation. Its Smart Energy Matrix is a nonpolluting,
megawatt-level, utility-grade flywheelbased
energy storage system that provides
sustainable frequency regulation services, an
energy-balancing service required by every
modern grid. The Company was founded in 1997
and is headquartered in Tyngsboro, Massachusetts.
50 Engineers Road, Hauppauge, NY 11788 * T: (631) 701-2345 * www.hirschintl.com
• Global leader in flywheel energy storage technology
» Validated technology; 3 MW of flywheel energy storage in operation performing
frequency regulation service on the ISO-NE power grid and earning revenue
• Poised to expand rapidly as the Company capitalizes on positive market trends and continues
deployment and commercialization of its proprietary flywheel technology
» Construction under way of first full-scale 20 MW plant in Stephentown, NY
• Recurring revenue model with high margins; Up to 80% EBITDA margin
• Long-term positive pricing trends and expectations; Favorable market tariffs directly support
Company business model
• Sustainable competitive advantage based on strong IP position; Company holds more than
60 U.S. and international flywheel-related patents
• Scalable business model
» Sufficient manufacturing capacity in place to build two 20 MW plants annually
» Modest incremental investment ($4-5 million) could expand production capacity to five
20 MW plants annually
• Significant financial support from the U.S. Department of Energy (DOE)
» First public company to receive DOE loan guarantee commitment (announced July 2009);
approximately $43 million of debt financing to be funded by the U.S. Treasury’s Federal
Financing Bank, to help fund 1st full-scale 20 MW plant in NY
» Awarded $24-million DOE stimulus grant (November 2009) to be applied to costs of 20
MW flywheel energy storage plant in the PJM Interconnection
• The worldwide market for regulation services is large
» Estimated $4-8 billion annually, with open U.S. markets representing about $1 billion
» Company has initiated activities in Europe and is investigating China and Japan
• Proven and experienced management team
Key Statistics
(as of March 2010)
Symbol...............................................BCON
Market Cap..................................$53.15M
Shares Outstanding................129.75M
52-Week Range...................$0.33-$1.09
Management
F. William Capp
President and Chief Executive Officer
Matthew L. Lazarewicz
Chief Technical Officer
James M. Spiezio
Vice President of Finance
Chief Financial Officer
Investor Relations
The Investor Relations Group
11 Stone Street
New York, NY 10004
Tel.: (212) 825-3210
Fax: (212) 825-3229
IRGnews.com
Tom Caden
Erika Moran
65 Middlesex Road • Tyngsboro, MA 01879 • www.beaconpower.com
Company Overview
Investment Highlights
Following successful pilots in New York and California, the Company is now operating 3 MW of
utility-grade flywheel energy storage on the ISO-NE power grid in Massachusetts. The Company
has broken ground and is building its first full-scale 20 MW plant in Stephentown, NY, funded by a
combination of a $43 million DOE loan guarantee and Company equity. In November 2009, DOE
announced a grant award to the Company of $24 million, which will finance half the cost of a
second full-scale 20 MW flywheel energy storage plant in the PJM Interconnection.
Beacon Power Regulation Plant in Stephentown, NY
(Artist rendition)
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Technology
Regulatory and Market Environment
A flywheel is an electro-mechanical energy storage device that converts electrical energy into
rotational (or kinetic) energy, and vice versa. It consists of a large cylinder levitated on magnetic
bearings in a near-frictionless environment that spins inside a vacuum housing. Although
simple in concept, the current fourth-generation Beacon flywheel system is the result of over
$200 million of investment and is protected by significant intellectual property in the form of
patents, know-how and software. Flywheels recycle electricity from the grid by absorbing it
when the supply is greater than demand, then injecting it back when needed to meet demand,
thereby stabilizing the frequency of the grid. This technology has a number of performance
advantages, including: extremely high cycle life, low operating costs, fast response and zero
direct greenhouse gas emissions. Gen4 25 kWh/100 kW Flywheel
The primary method used to supply frequency regulation today is to ramp slow-moving fossil
fuel power plants up and down, which produces significant emissions. These generators also
incur the costs of higher fuel consumption, increased maintenance and a loss of energy sales.
Flywheel-based regulation is faster and more responsive, uses no fuel, and requires minimal
maintenance. In addition, the low operating costs of flywheel technology, combined with
existing market mechanisms for establishing prices, result in EBITDA margins of up to 80%.
Flywheels provide more reliable regulation, while generating zero direct emissions. As shown
in the chart to the right, based on a study funded by the DOE, the flywheel is on the forefront of
“green” technology and has proven to be much more effective compared to other generation
0
20
40
60
80
100
120%
I deal
Resource
Flywheels Average
California
Hydro
Combustion
T urbine
Steam
T urbine
Combined
Cycle
Percent Effectiveness, as compared to 'State-of-the-Art'
Within each Independent System Operator (“ISO”), there is a market tariff
and set of market rules that determine who is allowed to bid into regulation
markets, how much regulation providers are paid for their services, and
what costs providers incur to participate. The New York ISO, Midwest ISO,
and PJM Interconnection markets now have tariffs that enable energy
storage-based frequency regulation. The Company is continuing to
leverage FERC Order No. 890, which requires ISOs to open their regulation
markets in other areas.
The Company’s strategy is to build merchant plants in open-bid markets,
and sell turnkey systems in regulated markets, both in the U.S. and abroad,
where the system costs will be included in the rate base.
and regulation technologies, including pumped hydro and combustion turbines, the current workhorses of frequency regulation technologies.
FERC has acknowledged that some storage technologies (such as flywheels) can respond faster and more accurately to regulation signals,
and that market tariffs that provide higher compensation may be appropriate.
Recent Developments
1/7/10: Beacon is now able to compete on a favorable basis in the Midwest Independent System Operator (Midwest ISO) frequency regulation
market, thanks to the latest in a series of supportive rulings by the Federal Energy Regulatory Commission (FERC).
12/17/09: Beacon successfully connected and integrated an additional megawatt (MW) of flywheel energy storage on the New England
power grid. This brings to 3 MW the total capacity now in operation and earning revenue from frequency regulation services.
12/9/09: Beacon has consummated the sale of 38.1 million units at a price to the public of $0.544 per unit, as previously announced on
December 4, 2009. Net proceeds, assuming no exercise of the warrants and additional investor rights warrants, and after underwriting
discounts and commissions and estimated expenses, are approximately $19.2 million.
11/24/09: The U.S. Department of Energy (DOE) awarded Beacon Power a stimulus grant valued at $24 million, for use in the construction of
the Company’s second 20 MW flywheel energy storage plant, to be located in Chicago, Illinois.
11/19/09: Beacon Power was joined today by state and local officials at a formal groundbreaking event in Stephentown, New York, signaling
the start of construction for the nation’s first full-scale 20-megawatt (MW) flywheel frequency regulation plant.
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