Active Power to Increase Manufacturing Capacity;Market Demand For CAT UPS Drives Expansion Needs.

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--Oct. 24, 2000

Active Power, Inc. (Nasdaq:ACPW), of Austin, announced today that the company is expanding its manufacturing facilities by ten-fold to meet anticipated demand for its innovative, flywheel-based power-quality products.

Active Power, Inc. recently added 27,000-square feet of manufacturing space and will significantly increase its manufacturing workforce in order to triple its manufacturing capacity by end of the second quarter of 2001. The company also has signed a lease for an additional 127,000-square feet of manufacturing space and plans to move into this facility in the spring of 2001 with production beginning as early as the third quarter of 2001. This expansion, when fully scaled up, will result in a ten-fold increase in capacity over current levels.

"This increase in manufacturing space and capacity is essential for us to meet our growth plans. The rapid build out of Internet and Web hosting facilities and the compelling advantages of our battery-free solutions are driving the market demand for the Active Power solutions," said Joe Pinkerton, CEO of Active Power (www.activepower.com).

"Active Power's manufacturing expansion is critical in meeting the growing customer demand for CAT quality power solutions through our world-wide dealer network." said Jim Parker, Director Electric Power Generation Group of Caterpillar, Inc.

Active Power Solutions

Active Power designs, manufactures and markets power quality products that provide the consistent, reliable electric power required by today's digital economy. Targeting a large segment of the $11 billion power quality market, Active Power's battery-free power quality solutions eliminate power disturbances, which cost U.S. industry alone $30 billion annually in lost data and productivity. (Source: Electric Power Research Institute, 1999).

Active Power is the first company 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. Leveraging its expertise in flywheel technology, and by partnering with Caterpillar Inc., the company has also developed a battery-free uninterruptible power supply (UPS), which is marketed under the Caterpillar brand name.

Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Headquartered in Peoria, Ill., the company posted 1999 sales and revenues of U.S. $19.7 billion.

Safe Harbor Provision

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. Please refer to Active filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

CleanSource is a trademark of Active Power, Inc. All other trademarks are the properties of their respective companies.