World's Highest Railway Chooses Echelon Technology


(San Jose, CA - July 26, 2006) - Echelon Corporation (NASDAQ: ELON), a
global networking company providing technology and solutions for
controls, smart metering, and energy and environment management, today
announced that its LonWorks(r) control technology has been chosen by
Sifang Rolling Stock Research Institute for use in China's new high-tech
train to Lhasa, Tibet. The Quinghai-Tibet railway, the world's longest
high altitude railway, is using Echelon's technology to monitor and
control various systems, including monitoring a state-of-the-art oxygen
supply system for passengers. The railway made its inaugural voyage
earlier this month.

Reliability and proven performance are necessities in any
public transit system. The LonWorks control networking platform is the
platform of choice for many passenger and transport rail systems. The
underlying protocol of the LonWorks platform is a passenger train
control standard. Known as IEEE 1473L, it is in use today in New York
City subway cars, Helsinki Light Rail, Paris Metro, San Francisco BART,
and other transit systems, and is the required communications platform
for the Chicago Transit Authority's next generation subway cars. The
American Association of Railroads utilizes the protocol and Echelon's
power line signaling technology in its electro-pneumatic braking system
standard. Additionally, the LonWorks networking platform is used
extensively in train stations and way stations, and for remote
monitoring and control of track switching mechanisms in harsh
environments.

"We required a proven, reliable, standards-based networking
technology for this train to improve passenger safety at high
altitudes," said Liu, Baoming, Vice President, Sifang Rolling Stock
Research Institute. "Echelon's LonWorks technology is the best choice
for monitoring safety applications and it integrates easily with other
sub-systems on the train, making it cost-effective as well."

The latest of China's impressive engineering feats, the $3.2 billion
railway project reaches 16,640 feet above sea level at its highest
point. In order to keep passengers from suffering from altitude
sickness, pressurized cars and special train engines that can function
with little oxygen are used to reduce the effects of the high altitudes.
Echelon's technology is used in the control network to monitor the
oxygen supply system, one of the first of its kind in the world, which
provides individual oxygen supply for passenger at high altitudes and is
integrated with the train's traditional heating, ventilation and
air-conditioning (HVAC) system. In addition, Echelon's technology is
used to monitor braking, door, lighting, and power supply systems for
safety and environmental monitoring purposes.

Sifang Rolling Stock Research Institute and the China Academy of Rail
Sciences have standardized on Echelon's LonWorks networking platform for
safety monitoring on next generation passenger trains in China -
effectively making it a de facto standard for high speed rail travel in
the world's largest passenger rail transport market. Echelon's LonWorks
networking platform monitors safety features on over 4,500 high speed
passenger train cars including brakes, doors and power supply. Since
2002, China's Ministry of Railways has recommended Echelon's LonWorks
platform as one of the approved control network standards for passenger
trains.

"Sifang Rolling Stock Research Institute is a driving force in making
LonWorks technology the de facto standard for rail transportation in
China and we are pleased to have such an experienced partner," said Ken
Oshman, Echelon's chairman and CEO. "This latest application underscores
the reliability and versatility of LonWorks technology, even under
harsh conditions, and the safety benefits that can be achieved by any
organization with similar challenges."

About Sifang Rolling Stock Research Institute

Sifang Rolling Stock Research Institute is a division of
China Northern Locomotive and Rolling Stock Industrial Group, one of the
largest institutes dedicated to passenger cars in China. Sifang is a
major research institute and original equipment manufacturer for China's
railway industry and is based in Qingdao, China.

Further information regarding Sifang can be found at
http://www.srsri.com.

About Echelon Corporation

Echelon Corporation (NASDAQ: ELON
is a pioneer and world leader in control networking
- networks that connect machines and other electronic devices - for the
purpose of sensing, monitoring and controlling the world around us.
Echelon's LonWorks platform for control networking was released in 1990
and has become a worldwide standard in the building, industrial,
transportation, and home automation markets. Launched in 2003, Echelon's
Networked Energy Services (NES) system is an open, extensible, advanced
metering infrastructure that can bring benefits to every aspect of a
utility's operation, from metering and customer services to distribution
operations and value-added business. In 2005 Echelon released the
world's first embedded control network infrastructure, the Pyxos(tm)
platform. The Pyxos platform extends the benefits of networking inside
machines to the sensors and actuators that make them function and
expands the reach and power of LonWorks control networks.

Echelon has been a leader in the advanced metering infrastructure
market, providing the underlying network technology for the world's
largest advanced meter management (AMM) project in Italy, with over 27
million connected electricity meters and more recently, winning tenders
to provide the NES system to 700 thousand to 1.1 million customers for
utilities in Sweden, The Netherlands and Australia.

Echelon is based in San Jose, California, with international offices in
China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands,
and the United Kingdom. Further information regarding Echelon can be
found at www.echelon.com.

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