FuelCell Energy to Provide Direct FuelCell Power Plant to the U. S. Army Engineer Research and Development Center/Construction Engineering Research Laboratory

Business Wire, August 17, 2004

DANBURY, Conn. -- FuelCell Energy, Inc. (NasdaqNM:FCEL) has entered into a Cooperative Research and Development Agreement (CRADA) with the U. S. Army Engineer Research and Development Center/Construction Engineering Research Laboratory (ERDC-CERL) and will provide a 250-kilowatt Direct FuelCell(R) (DFC(R)) power plant to the Department of Defense (DoD) Fuel Cell Test and Evaluation Center (FCTec) for evaluation in a combined heat and power application. This distributed generation fuel cell system will supply electricity, and the byproduct heat will be coupled with an adsorption chiller.

The power plant will be located in Johnstown, PA at the FCTec, operated by Concurrent Technologies Corporation (CTC). CTC will operate and maintain the DFC300A in a combined power and cooling application utilizing natural gas as the supply fuel for the system. CTC will monitor, trend, and report on the operating and maintenance parameters of the DFC power plant and heat recovery equipment, including all auxiliaries. CTC will leverage the FCTec resources for the performance characterization of electrical and thermal output of the system. This information will allow FuelCell Energy to expand the knowledge of the DFC power plant's electrical and thermal operating parameters, efficiency, and system capabilities. The electrical output will provide a portion of the power requirement for CTC's Environmental Technologies Facility. The available high-temperature heat from the DFC power plant will be used to support the input energy needs of an absorption chiller system. The absorption process utilizes thermal energy to create chilled water to support the air conditioning requirement in the facility. Future application of the system will be to analyze the use of the available system heat output from the DFC power plant for tri-generation--the supply of electricity as well as chilled and hot water in a combined system.

"We are pleased to have the opportunity to work with the ERDC-CERL and CTC in this DFC power plant demonstration," said Herbert T. Nock, FuelCell Energy's Senior Vice President of Marketing and Sales. "We believe that the use of the heat output from the power plant for air conditioning and other uses adds further to the overall value equation presented by our DFC power plants, and we look forward to testing and evaluating the results at FCTec."

Under the 12-month program, FuelCell Energy will retain title to the unit and equally cost share the labor to operate and maintain the unit with ERDC-CERL. Through ERDC-CERL funding, FCTec will provide heat recovery equipment and mobilization costs as well as all material and utilities, including fuel and water, for the operation and maintenance of the power plant.

"The FCTec's mission is to significantly accelerate the development and commercialization of fuel cell power systems for military and commercial applications, and this new project between FuelCell Energy and FCTec will contribute to our ongoing Fuel Cell Demonstration Projects," said Dr. Michael Binder, U.S. Army ERDC-CERL Fuel Cell Project Manager.

The power plant at the FCTec is the same unit that accomplished a number of firsts when it operated in Boston at the Democratic National Convention, where it supplied electric power to a temporary media campus:

--First DFC power plant to operate in a micro-grid--a distributed generation system that operates independently from the local utility's transmission and distribution infrastructure

--First DFC power plant to operate in parallel with diesel generators

--First DFC power plant to automatically operate in islanded mode (separate from the micro-grid)

--First DFC power plant to provide temporary portable power.

About DFC power plants

Direct FuelCells efficiently generate clean electricity at distributed customer locations, including hospitals, schools, universities, hotels, and other commercial and industrial facilities, as well as in grid-support applications for utility customers. Direct FuelCells operate similar to large, continuously operating batteries, except they utilize a fuel to generate electricity such as natural gas or digester gas from wastewater treatment facilities. DFC power plants are hydrogen generators, and because of this are ready today and do not require the creation of a hydrogen infrastructure. This high-efficiency technology generates more electric power from less fuel and with less carbon dioxide emissions than traditional combustion methods. The sub-megawatt fuel cell power plant is a collaborative effort using Direct FuelCell(R) technology of FuelCell Energy and the Hot Module(R) balance of plant design of MTU CFC Solutions, GmbH, a subsidiary of DaimlerChrysler.

About FCTec

The U.S. Department of Defense (DoD) Fuel Cell Test and Evaluation Center (FCTec) is a national resource facility for the independent, unbiased testing and validation of fuel cell systems for both military and commercial applications. The FCTec's primary goal is to significantly accelerate the development and commercialization of fuel cell systems through comprehensive research, development, test and evaluation, integration, and optimization services. For more information about the FCTec, please visit www.fctec.com. FCTec is operated by Concurrent Technologies Corporation (CTC). CTC is an independent, nonprofit, applied research and development professional services organization providing management and technology-based solutions to a wide array of clients representing state and federal government as well as the private sector. Established in 1988, CTC operates from more than 35 locations throughout the United States with a staff of over 1,300 employees. For more information about CTC, please visit www.ctc.com.