The California Energy Commission, in partnership with the U.S. Department of Energy and the California Independent System Operator (ISO), has begun the formal field trial testing of Beacon's flywheel-based frequency regulation system. The scale-power Smart Energy Matrix demonstration system, located at a Pacific Gas & Electric substation in San Ramon, California, will be extensively tested in the coming months as part of its qualification process. The field trial is the final stage of evaluation and is expected to be completed before the end of 2006.

"This is the next major step in demonstrating that Beacon flywheel technology is ideally suited to provide frequency regulation on the grid," said Bill Capp, Beacon president and CEO. "As with our other system now undergoing formal field testing in New York, this Smart Energy Matrix is expected to show that Beacon's clean and efficient energy storage systems can meet grid operator requirements responsively and cost-effectively. With preliminary testing in California now complete and several system improvements and upgrades in place, we believe we are well prepared for the field trial that will now take place."

"California's energy challenges are serious and immediate," added Capp. "If full-power Beacon Smart Energy Matrix frequency regulation plants were to be built in California, in addition to providing frequency regulation services, they would free up valuable existing generation assets. These generators could then be used to deliver base-load power to help meet the state's growing need. Our goal in this formal field trial process is to obtain acceptance of our technology by the Energy Commission and the California ISO, so that we are in a position to deploy frequency regulation power plants here on a commercial scale."

The company has announced plans to build megawatt-scale flywheel-based frequency regulation plants around the United States and to own and operate them on an independent merchant basis, or in conjunction with partners. In 2005, the value of frequency regulation services in the open and accessible U.S. markets was more than $600 million.