Capstone Turbine Announces The Signing of a Memorandum of Understanding to Form a Joint Venture with Agile Turbine Technology & Brayton Energy

Business Wire, Nov 15, 2006

CHASTSWORTH, Calif. -- Capstone Turbine Corporation (Nasdaq:CPST) (www.microturbine.com) announced today the signing of a Memorandum of Understanding (MOU) to negotiate the formation of a joint venture with Agile Turbine Technology, LLC and Brayton Energy, LLC for the further development, production, marketing and sales of a family of inter-cooled recuperated gas turbine commercial vehicle engines, the first of which will be called the ICR 225.

The ICR 225 gas turbine generator set is designed to provide 225 kilowatts (300hp) of power for rapid acceleration, passing, hill climbing and sustained high power. Though very efficient in this mode, patented processes are designed to achieve equally high efficiency at 75 kilowatts (100 hp) when a vehicle is in traffic or cruising on highways. The low emissions characteristics of the turbine are well suited to meet 2010 emission requirements. Though the initial design of the ICR 225 is for transportation uses, it may also be used in the stationary market.

Agile Turbine Technology is a company that designs advanced vehicle engines. "The microturbine-based engines use patented technology to achieve high efficiency at both full load and partial load with very fast throttle response. The Agile engines represent the most cost-effective means for meeting efficiency and emission goals on either liquid or gaseous fuels" said Robin Mackay, Chairman and CEO of Agile Turbine Technology and one of the original founders of Capstone Turbine Corporation.

Brayton Energy is a research and development firm specializing in turbomachinery, high temperature heat exchangers and advanced combustion systems. Brayton's experienced engineering team, headed by James Kesseli, President, has pioneered many advancements related to microturbines and gas turbines.

"We are very pleased by this proposed venture as it opens the door for the development of the next generation of microturbine solutions for the vehicle market. Traditional reciprocating engine manufacturers are faced with increasing regulatory pressure to continue to reduce emissions while increasing efficiency. We believe the patented ICR turbine concept provides the right answer to both of these market requirements. The talented and professional team of Agile Turbine Technology and Brayton Energy provides the capabilities we have been seeking in the development of this novel gas turbine technology" said Mark Gilbreth, Interim President and CEO of Capstone Turbine Corporation.

Representatives from Agile Turbine Technology, Brayton Energy and Capstone Turbine Corporation are attending the Hybrid Truck Users Forum in San Diego, November 14-16. The 2006 meeting will feature the latest field performance data on hybrid trucks now in fleet assessment and the latest product and technical updates, among other things.

About Capstone Turbine Corporation

Capstone Turbine Corporation (www.microturbine.com; Nasdaq: CPST) is the world's leading producer of low-emission microturbine systems and was the first to market commercially viable microturbine energy products. Capstone Turbine has shipped more than 3,500 Capstone MicroTurbine systems to customers worldwide. These award-winning systems have logged millions of documented runtime operating hours. Capstone Turbine is a member of the U.S. Environmental Protection Agency's Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation's energy infrastructure and reducing emissions of pollutants and greenhouse gases. A UL-Certified ISO 9001:2000 certified company; Capstone Turbine is headquartered in the Los Angeles area with sales and/or service centers in New York, Mexico City, Milan, Nottingham, Shanghai and Tokyo.

This press release contains "forward-looking statements," as that term is used in the federal securities laws, about Capstone's business, with regard to, among other items the development and production of a microturbine solution for the vehicle market. The MOU described herein is non-binding and subject to negotiation and signing of a definitive agreement. There should be no expectations regarding revenue or profitable operations to Capstone at this preliminary stage, and even if we are successful in negotiating a definitive agreement, we may not achieve intended financial results as a result of numerous factors some, but not all of which are described in Capstone's SEC filings. This release speaks only as of its date and Capstone disclaims any obligation to revise the statements made herein.

"Capstone Turbine Corporation" and "Capstone MicroTurbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.