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The attached news release crossed the wires this morning at 5:30 a.m. PT,
8:30 a.m. ET.

Link to news release on our website:




Megan Ravel
Investor Relations
650-960-3000, ext. 6253


MOUNTAIN VIEW, CA (June 20, 2001) - Catalytica Energy Systems, Inc.
(Nasdaq: CESI) today announced that its Xonon(tm) Cool Combustion system
operating on a gas turbine at Silicon Valley Power (SVP) has successfully
achieved 8,000 hours of ultra-low emissions power production. Performance
data gathered throughout the 8,000 hours of operation confirms Xonon's
ability to consistently deliver nitrogen oxides (NOx) emissions below 2.5
parts per million (ppm) and to operate reliably under commercial gas turbine
operating conditions over an extended period of time.
"We have been very pleased with Xonon's performance," stated Craig
Kitchen, president and CEO of Catalytica Energy Systems. "Achieving the
milestone of 8,000 hours of operation provides valuable evidence supporting
the long-term endurance and reliability of our product. Operating Xonon
under unattended commercial conditions for this period of time demonstrates
not only that Xonon can enable a gas turbine to achieve ultra-low NOx
emissions, but also that it can do so while withstanding normal combustor
operating conditions and without affecting gas turbine performance."
Kitchen continued, "We believe that the results we have seen to date verify
that Xonon is a commercially viable NOx control technology, and should
further enhance the integrity of our product in the marketplace."
Deputy Air Pollution Control Officer Peter Hess P.E., DEE, of the Bay Area
Air Quality Management District, commented, "We are encouraged by Xonon's
performance results and its potential for reducing NOx emissions in an
environmentally-friendly manner. Technologies that can enable clean power
are becoming more and more important both in the San Francisco Bay Area and
nationwide as trends are shifting toward the need to site power sources
close to the load. We view Xonon as a promising technology to satisfy
community power needs without adversely affecting air quality."
Since its installation at SVP, a municipally-owned utility site,
the Xonon-equipped 1.4 megawatt (MW) Kawasaki gas turbine has served
alternately as a demonstration of Xonon's performance and reliability during
unattended full-load operation, and as a development and test engine in
support of commercial program initiatives for customers. During this time,
the Xonon-equipped turbine has accumulated 8,000 hours of clean, reliable
power generation on the commercial utility grid, serving the electricity
needs of approximately 1,500 homes in Santa Clara, California. The first
commercial installation of Xonon-equipped gas turbines is scheduled for
later this year, when three Kawasaki M1A-13X (1.4 MW) turbines will enter
service in Massachusetts to supply the primary power needs of a U.S.
government healthcare facility.
The Xonon operation at SVP has been supported and recognized by a number of
important third-party organizations including the California Air Resources
Board, the California Energy Commission, the U.S. Department of Energy, the
U.S. Environmental Protection Agency (EPA), the Electric Power Research
Institute, and the Gas Technology Institute, many of which have participated
in its funding. In February 2000, Xonon's operation at SVP met the EPA
criteria for an emissions control technology that is "achieved in practice."
This designation enables state and local agencies to require that new power
projects consider Xonon in their permit applications. In August 2000,
Catalytica won the EPA's first Clean Air Excellence Award for Xonon. Most
recently, Xonon successfully completed an evaluation process by the EPA's
Environmental Technology Verification (ETV) Program, which verified
Catalytica Energy Systems' ultra-low emissions claim of less than 2.5 ppm
NOx for its Xonon technology.
Catalytica Energy Systems designs and develops advanced products for
more effective energy production. Its proprietary technologies include the
use of catalysts to create solutions to ease the environmental impact of
power generation. The Company's first product, Xonon Cool Combustion, is a
breakthrough combustion technology that achieves ultra-low emissions levels
for gas turbine power production. Xonon prevents the formation of
pollution, particularly nitrogen oxides (NOx), a primary contributor to
smog, through a proprietary catalytic combustion process. Find Catalytica
Energy Systems on the worldwide web at

This news release contains forward-looking statements regarding the
performance of Catalytica Energy Systems' Xonon Cool Combustion system over
extended periods of time, Xonon's ability to perform reliably, Xonon's
ability to consistently deliver NOx emissions less than 2.5 ppm,
incorporation of Xonon into the Kawasaki M1A-13X turbine, the scheduled
delivery of Xonon-equipped M1A-13X gas turbines by Catalytica Energy Systems
and Kawasaki for a Massachusetts' power project, the deployment of
Xonon-equipped M1A-13X turbines at project sites, the market demand for
technologies that can enable clean power production, and the competitive
position of Catalytica Energy Systems. Actual results could differ and such
differences could be material. These statements involve risks and
uncertainties, including without limitation, the risk that there may be
unanticipated technical, commercial, or other factors related to Xonon's
performance, the incorporation of Xonon into the M1A-13X turbines, the
arrangements between Kawasaki and Catalytica Energy Systems for the supply
of M1A-13X gas turbines, that marketing, project development, and
installation timelines and regulatory review outcomes are uncertain, and
that results may differ from those stated and the other risks set forth in
the Catalytica Energy Systems' Form 10-K for the year ending December 31,
2000, filed with the Securities and Exchange Commission. Catalytica Energy
Systems undertakes no obligation to update publicly any forward-looking
statements to reflect new information, events, or circumstances after the
date of this release. Investors are encouraged to review Catalytica Energy
Systems' Form 10-K for the year ending December 31, 2000, filed with the
Securities and Exchange Commission, for additional factors that could affect
Catalytica Energy Systems' future performance.
# # # #

Editor's Note: Xonon and Cool Combustion are registered trademarks of
Catalytica Energy Systems, Inc. Mountain View, CA, USA

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