AES Installs A123Systems H-APU™ Energy Storage System at Facility in Southern California

WATERTOWN, Mass.- A123Systems, a developer and manufacturer of advanced NanophosphateTM lithium-ion batteries and battery systems, announced the delivery and installation of its first Hybrid Ancillary Power Units (H-APU) with AES Energy Storage, LLC, a subsidiary of The AES Corporation (NYSE: AES), one of the world’s largest global power companies. The H-APU is designed to create another way for AES’ existing facilities to meet the power industry’s need for capacity, by supplying power plant reserve requirements and other ancillary services which enable the increasing use of renewable energy sources.

A123 is under contract to provide multiple Hybrid Ancillary Power Units in 2008 and 2009 for use in grid stabilization applications in several AES facilities across the world. The initial unit, installed at one of AES’s Southern California power plants, is capable of delivering 2 MW of power at close to 90% efficiency.

“We believe A123’s H-APU product line addresses the demanding performance requirements of grid stabilization and offers an innovative solution for the utility industry. When fully deployed in 2009, we believe this will be the largest fleet of battery storage systems in operation on the electric grid,” said Dave Vieau, Chief Executive Officer of A123 Systems.

The Hybrid Ancillary Power Unit energy storage system can serve two functions. First, A123’s H-APU will absorb (charge) energy from the grid during times when the frequency or voltage is too high and inject (discharge) that energy back to the grid when it is too low. A123’s H-APU is expected to allow greater use of variable sources of energy such as wind and solar by rapidly absorbing or injecting energy as these sources vary. The H-APU is expected to provide variable service much faster than existing power plants responding in seconds rather than minutes. And, because it is recycling energy already in the system, it will provide these services without unnecessary emissions.

Second, the Hybrid Ancillary Power Units are designed to provide backup services by storing energy until it is needed by the grid in the event of a power plant or other asset failure. In some markets, the portion of thermal power plant capacity normally reserved for ancillary services to provide reserve capacity and frequency regulation services can be freed up to operate at a higher capacity and produce more electricity and associated revenue.

“We believe fast-responding, high-efficiency energy storage systems, such as A123’s H-APU, will make power systems more efficient and responsive. This technology gives Independent System Operators’ (ISOs) a powerful new tool to balance varying load with the increasingly varying supply created by renewable sources. They also create an efficient, low-cost way for plants to meet reserve requirements,” said Chris Shelton, President of AES Energy Storage, LLC.

AES is working with industry leaders to selectively deploy energy storage solutions to improve the capacity, responsiveness, and efficiency of its existing thermal, renewable, and distribution facilities. As one of the world’s largest global power companies, with operations in 29 countries, AES is comprised of a platform of more than 120 power facilities and 12 million distribution customers.

Pending final approvals, the H-APU will be used to provide ancillary services for the California power market. For more information on the A123 offering for utilities, visit www.a123systems.com.