A123 Systems and NSTAR to Launch Advanced Energy Storage Pilot Project

Project to Showcase System and Customer Benefits of Innovative Energy Storage Solutions

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| Source: A123 Systems, Inc.

BOSTON and WALTHAM, Mass., Dec. 19, 2011 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium ion batteries and systems, today announced that it is launching a pilot project with NSTAR to study and showcase the performance and reliability benefits of implementing A123's Grid Storage Battery (GBS) within a suburban electric grid. The system, NSTAR's first battery energy storage project, is proposed for installation at a substation in Medway, Mass. and is expected to be operational in 2012.

"We're very interested in learning more about how advanced energy storage can help continue to improve electric service reliability for our customers," said Lawrence Gelbien, vice president of engineering at NSTAR. "Launching this pilot project with A123 will allow us to gain invaluable hands-on experience with clean, efficient energy storage technology and, ultimately, it will help determine how we can utilize larger-scale energy storage projects on our system."

Under the terms of the agreement, one of A123's two-megawatt (2MW) GBS solutions is proposed to be interconnected to the power grid at NSTAR's substation in Medway. It will be owned and operated by A123, and will be designed to provide area regulation services, which are used to address momentary differences between electric power supply and demand. A123 expects to earn revenue from these area regulation services from ISO-New England (ISO-NE) as part of the Alternative Technology Regulation (ATR) Pilot Program, which allows "non-generating resources" such as advanced energy storage systems to receive compensation for area regulation and other ancillary services. In addition, the pilot project is expected to allow A123 to learn more about how its GBS performs in real-world applications in order to facilitate further product improvements designed to reduce total cost of ownership.

"Working with leading utilities like NSTAR enables us to showcase the economic and operational viability of our advanced GBS solutions and helps to further validate our position as the leading provider of storage technology for electric grid services," said Robert Johnson, vice president of the Energy Solutions Group at A123 Systems. "We expect that this pilot project will allow us to demonstrate how energy storage can generate revenue for area regulation services. Further, we believe that owning and operating our own real-world storage system will allow us to enhance our product offerings to continue delivering cost-effective, efficient solutions that seamlessly integrate with existing grid infrastructure and technologies."

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company's proprietary Nanophosphate® technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please visit www.a123systems.com.

The A123 Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6600

About NSTAR

NSTAR is the largest Massachusetts-based, investor-owned electric and gas utility. The company transmits and delivers electricity and natural gas to 1.4 million customers in Eastern and Central Massachusetts, including more than one million electric customers in 81 communities and 300,000 gas customers in 51 communities. For more information, visit www.nstar.com.

Safe Harbor Disclosure

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the performance, reliability and expected benefits of A123's products for area regulation services, delays in customer and market demand for area regulation services, delays in NSTAR's area regulation services project, delays in the implementation of A123's  solutions at such project and the project's generation of revenue, delays in the development, production and delivery of A123's  area regulation service products and solutions, the ability of the project to facilitate future product improvements, adverse economic conditions in general and adverse economic conditions specifically affecting the markets and geographies in which A123 and NSTAR operate and other risks detailed in A123 Systems' quarterly report on Form 10-Q for the quarter ended September 30, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123's expectations only as of the date of this release and should not be relied upon as reflecting A123's views, expectations or beliefs at any date subsequent to the date of this release.

A123 Systems PR Contact:
A123 Systems
Dan Borgasano
617-972-3471


A123 Systems IR Contact:
ICR, LLC
Garo Toomajanian
617-972-3450


NSTAR Contacts:
Caroline Allen
617-424-2460


Michael Durand
508-441-5831