A123 Systems Solidifies Leadership Position in Delivery of Lithium Ion Technology

These projects, scheduled to be completed by the end of 2011, extend the business relationship established between AES Energy Storage and A123 Systems in 2008 to develop and deploy multi-megawatt energy storage systems to increase the capacity, improve responsiveness and enhance efficiency of assets on the electric grid. In 2009, the companies announced the commercial operation of a 12 MW frequency regulation and spinning reserve project using SGSS at AES Gener’s Los Andes substation in the Atacama Desert in Chile, the first energy storage system deployed in the country.

"A123’s SGSS provide nearly instantaneous response to grid operator requests for power absorption or injection, making our technology an ideal energy resource for helping utilities perform frequency regulation and other ancillary services," said Robert Johnson, vice president of A123’s Energy Solutions Group.

"A123 and AES Energy Storage have demonstrated the commercial viability of using utility-scale lithium ion batteries for grid stabilization services, and this 44MW order highlights the continuing mutual success of this business relationship as utilities and grid operators increase demand for more cost-effective, energy-efficient ancillary services."

A123’s industry-leading SGSS offer utilities a complete solution to quickly and cost-effectively hybridize power plants to increase efficiency, improve grid stability and facilitate the seamless 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, synchronous reserve and other ancillary services.

To date, A123 has delivered more than 20MW of SGSS units to customers worldwide, making the company the largest producer of lithium ion batteries for ancillary services for the power grid.

"With this new order, AES Energy Storage continues to build on its ability to effectively deliver energy storage services to electric grid operators around the globe," said Chris Shelton, President of AES Energy Storage, LLC. "Our project development and operating capabilities combined with A123’s expertise in grid-scale products provides quality reliability services for power grid operators."

AES Energy Storage delivers the benefits of large-scale energy storage systems to utilities, power stations, ISOs and renewable developers. AES Energy Storage will deploy the SGSS units to deliver frequency regulation and synchronized reserve, ancillary services that help system operators reliably maintain the near instantaneous and continuous balance between generation and load.

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.

www.a123systems.com