A123 Systems to Supply Advanced Energy Storage System to Dongfang Electric Corporation

WALTHAM, Mass., July 26, 2011 (GLOBE NEWSWIRE) -- A123 Systems, (Nasdaq:AONE) a developer and manufacturer of advanced Nanophosphatelithium ion batteries and systems, today announced a contract to supply a 500kW advanced energy storage solution to Dongfang Electric Corporation (DEC), the third largest manufacturer of wind turbines in the People's Republic of China and the country's largest exporter of power equipment. Expected to be installed at DEC's manufacturing facility in Hangzhou city, China Zhejiang Province, by the end of 2011, the system is designed as a demonstration project to help DEC evaluate how advanced energy storage can address the challenges associated with the rapid growth of wind power in China.

"The government has set ambitions goals to increase wind power in China to about 170GW by 2020, and DEC looks forward to doing our part to help reach this target. However, there will be infrastructure and interconnection challenges along the way that must be addressed," said Mr. He, general manager of Dongfang Electrical Machinery Co. "Advanced storage technology continues to show promise as a potential solution to the variability of wind energy generation, and installing this project with A123 will allow us to gain hands-on experience with grid-scale storage systems. Ultimately, we expect this to help us understand how we can leverage larger-scale energy storage deployments to facilitate the rapid adoption of wind energy across China."

This project will be A123's first energy storage system in China, where only about 72 percent of the country's total wind power generating capacity is connected to the power grid, according to data from the China Power Union. This is largely due to the unacceptable Low Voltage Ride Through (LVRT) capability—during periods of low grid voltage, wind farms are disconnecting and are slow to reconnect when voltage increases—and the general lack of ramp management technology, which results in the inability to predict the output of wind farms and leads to grid instability.

"We believe that China represents a significant market opportunity for our advanced energy storage technology, especially as a solution to addressing the LVRT and ramp-management problems standing in the way of the country's aggressive plans for wind power deployment," said Robert Johnson, vice president of the Energy Solutions Group at A123. "Today's announcement is a significant step toward developing a presence in China, and by aligning ourselves with an established organization like DEC, we believe we will gain a considerable strategic advantage. We are hopeful that DEC will find that our storage systems are optimal for enabling the widespread adoption of wind power, and believe this project could result in additional contracts going forward."

A123's advanced Nanophosphate lithium-ion energy storage systems offer customers a complete solution to improve grid stability and facilitate the integration of renewable energy sources. The robust, highly scalable design consists of modular energy storage racks, power electronics and communications and controls software, enabling grid operators to implement a turnkey package for frequency regulation, spinning reserve and other ancillary services.

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and commercial markets. Headquartered in Massachusetts and founded in 2001, A123 Systems' proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology. For additional information please visit www.a123systems.com.

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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:  changes or delays in the Chinese government's goals to increase wind power in China, the ability to address infrastructure and interconnection challenges in China, delays or inability of the demonstration project to meet its intended goals, delays in customer and market demand for DEC's products and services, delays in DEC's energy projects or delays in the implementation of the Company's solutions at such projects, delays in the development, production and delivery of the Company's products and solutions, adverse economic conditions in general and adverse economic conditions specifically affecting the markets and geographies in which A123 and DEC operate and other risks detailed in A123 Systems' quarterly report on Form 10-Q for the quarter ended  March 31, 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.

CONTACT: A123 Systems PR Contact:

         A123 Systems

         Dan Borgasano

         617-972-3471

         dborgasano@a123systems.com

         

         Edelman

         Courtney Kessler

         212-277-3720

         courtney.kessler@edelman.com

         

         A123 Systems IR Contact:

         ICR, LLC

         Garo Toomajanian

         617-972-3450

         ir@a123systems.com



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