Revolutionary Battery-Free Product Produces 10 kW for 2 Hours; Eyes Telecom Market

Austin, Texas (August 31, 2004) -- Active Power, Inc. (NASDAQ: ACPW), a leading manufacturer of battery-free backup power products, today announced that it successfully operated a prototype of its new battery-free energy storage system at 10 kilowatts (kW) for over 2 hours, a milestone that positions the new product well for the telecommunications segment.  

“The runtime of this prototype system is already 60 times that of our flywheel product and yet offers the same battery-free benefits,” stated Joe Pinkerton, Chairman and CEO of Active Power, Inc.  “A battery-free system that provides hours of backup time will allow Active Power to pursue the $4 billion telecommunications backup power market.”

As outlined earlier this year, the company has set forth the following additional milestones to be completed over the remainder of 2004:

• Unveil extended runtime technology publicly in Q3; and
• Ship first alpha units to customers in Q4.

Previous achievements include producing 80 kW for over 15 minutes, a mark that will enable this product to represent the first true alternative to lead-acid batteries in the 3-phase Uninterruptible Power Supply (UPS) market below 100 kilovolt-amps (kVA), which is approximately 45% of the overall $2 billion 3-phase UPS market.  The flexibility of the technology to provide a range of energy from 10 to 80 kW for a matter of minutes to hours allows the resulting products to fulfill a wide variety of customer power requirements and applications.

With over 500 units installed worldwide and several million hours of field operation, Active Power’s products are a proven alternative to battery-based systems.  The company offers the industry’s broadest range of battery-free power quality solutions: the CleanSource DC product line, which is compatible with all leading UPS brands and is available in the 100 kW to 2000 kW range, and the CleanSource UPS product family, available from 65 kVA to 3600 kVA.  Recognized by Frost & Sullivan for its ability to satisfy customer needs with new and innovative products, Active Power continues to rapidly expand its product line to address the needs of new market segments and geographies.  For more information visit www.activepower.com, e-mail sales@activepower.com or call 1-877-FLYWHEEL (359-9433).

About Active Power:
Active Power, Inc.  (www.activepower.com) designs, manufactures and markets battery-free power quality products that provide the consistent, reliable electric power required by today's digital economy.  An ISO 9001-registered company, Active Power is the first to commercialize a flywheel energy storage system, CleanSource® that provides a highly reliable, low-cost and non-toxic replacement for lead-acid batteries used in conventional power quality installations.


Cautionary Note Regarding Forward-Looking Statements:
This release may contain forward-looking statements that involve risks and uncertainties.  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. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

Active Power and our Active Power logo and CleanSource are registered trademarks of Active Power, Inc.  All other trademarks are the properties of their respective companies.


Active Power Contacts:
Michael Chibib
Investors
512.744.9453
mchibib@activepower.com

Derek Jones
Corporate Communications
512.744.9210
djones@activepower.com