Active Power Announces Caterpillar Agreement -- GlobalDistribution of New, Battery-Free UPS...

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AUSTIN, Texas--(BUSINESS WIRE)--Aug. 3, 2000

Active Power Technology Embedded in Caterpillar's

Power Quality Solutions

Active

Caterpillar announced the battery-free system today as the latest addition to its Electric Power product line-up. The two companies signed an agreement in 1999 to develop and market a fully integrated flywheel UPS system designed and manufactured to Caterpillar specifications and based on Active Power's flywheel R&D.

"The introduction of the Cat UPS further validates our flywheel technology, opens our flywheel-based products up to a huge global market and will make our firm a recognized player in the $5 billion (annual) UPS industry," emphasized Joe Pinkerton, Founder and Chief Executive Officer of Active Power. "The growing need for higher reliability in electric power is a major issue at Internet data and telecommunications centers, broadcasting facilities, and critical manufacturing plants, R&D and medical campuses."

Active Power (www.activepower.com) designs, manufactures and markets environment-friendly power-storage equipment used in UPS systems -- products required by today's digital economy for consistent, reliable electric power. Its systems enable the industrial power market to reduce or eliminate power surges, sags and outages costing U.S. firms an estimated $30 billion annually in lost productivity and manufacturing processes (Electric Power Institute, 1999).

Caterpillar, the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines, posted 1999 revenues of $19.7 billion.

In September 1997, Active Power, an eight-year-old firm, became the first company to commercialize a flywheel energy storage system that could provide a highly reliable, low-cost and non-toxic replacement for lead-acid batteries used in traditional power quality systems. In 1998, Discover Magazine recognized the firm's product for Innovation in its category "because of its anticipated revolutionary impact on society." It holds the promise of large-scale displacement of lead-acid batteries in conventional UPS systems, the editors concluded.

The economical, space-efficient Cat UPS protects critical systems from power disturbances and provides uninterruptible transition to Caterpillar standby generator sets. Its online capability precisely corrects for power disturbances and when combined with a Cat generator set provides protection against extended brownouts and blackouts.

The Cat UPS offers unlimited cycle life, the smallest available footprint, lower life cycle costs and increased reliability while reducing maintenance and environmental concerns. Cat UPS boasts an industry leading 98 percent efficiency compared to 90-94 percent for conventional UPS systems. This new UPS uses energy stored in a clean, safe and environment-friendly flywheel that eliminates the temperature restrictions, hazards, space and failure potential associated with battery-based UPS systems.

The Cat UPS holds numerous competitive advantages over conventional systems including low space requirements, fast recharge, greater temperature tolerance, minimal maintenance, improved reliability, higher efficiency, minimal heat rejection, gen set compatibility, high overload capability and unlimited cycle life. These advantages correlate to more reliable protection of critical power at lower cost.

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