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

BOSTON and WALTHAM, Mass., Dec. 19, 2011 (GLOBE NEWSWIRE) -- A123 Systems

(Nasdaq:AONE), a developer and manufacturer of advanced
Nanophosphate(R) 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(R) 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.