FuelCell Energy Signs With King County, Washington for Digester / Direct FuelCell Energy Project

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Thursday January 25, 8:36 am Eastern Time Press Release FuelCell Energy Signs With King County, Washington for Digester / Direct FuelCell Energy Project One Megawatt Fuel Cell Power Plant to Demonstrate Ability of Fuel Cell to Control Emissions and Utilize Renewable Fuel Source

DANBURY, Conn.--(BUSINESS WIRE)--Jan. 25, 2001-- FuelCell Energy, Inc. (Nasdaq: FCEL - news) and King County, Washington, jointly announced the signing of an agreement to install a Direct FuelCell® (DFC®) power plant using municipal wastewater digester gas as the fuel. FuelCell Energy was selected for the project through a competitive process last July to install and operate a 1MW DFC power plant at the County's South Wastewater Treatment Facility in Renton, Washington (King County). The two year demonstration project is cost-shared equally by FuelCell Energy and King County, through a cooperative grant to the County from the U.S. Environmental Protection Agency (EPA). Total value of the contract is $18.8 million. Operations are expected to commence during the third quarter of 2002.

``This megawatt-class commercial field trial of the DFC power plant represents the first advanced wastewater digester project for FuelCell Energy'', said Jerry Leitman, president and CEO of FuelCell Energy. ``This project will demonstrate the versatility of fuel use with the Direct FuelCell, as well as its capability to produce more electricity than other technologies using the same quantity of fuel. With 500 municipal waste-water treatment systems in the U.S., and a greater number of industrial wastewater treatment facilities that produce sufficient gas to supply our fuel cell power plants, we anticipate that generation of electricity at wastewater treatment plants will be a significant market for FuelCell Energy.''

``This is cutting edge technology that will help King County turn a waste byproduct into a valuable resource,'' said King County Executive Ron Sims. ``This is an important project as we look to meeting our future power needs in this new era of higher priced electricity.

A wastewater treatment system that uses an anaerobic digester process to stabilize solids and reduce pathogenic microorganisms produces a methane-rich gas that can be fed to the DFC power plant. According to industry sources, a 30 mgd wastewater treatment plant generates sufficient digester gas to fuel a one megawatt fuel cell power plant using carbonate technology.

Gregory M. Bush, manager, technology assessment and resource recovery at the Department of Natural Resources for King County, said, ``This is a very exciting project for King County. We are able to use a renewable gas resource product, in this case, a by-product of the wastewater treatment, to produce electricity to power our plant, and achieve a higher value in the process. We acknowledge the vision of EPA in seeing that wastewater treatment plants can contribute to the reduction of greenhouse gas and air pollution conventionally associated with electricity generation. We're pleased to play a part in validating digester/fuel cell systems because of the environmental benefits of producing power without combustion, thereby reducing air pollutants.''

Robert K. Bastian, senior environmental scientist for the EPA Office of Wastewater Management, commented, ``Once able to operate on a sustainable basis, it appears that fuel cells have the potential to improve the efficiency of energy recovery from digester gas, while greatly reducing air emissions -- including greenhouse gases -- from wastewater treatment plants. The 1MW Carbonate Fuel Cell demonstration project at King County provides an opportunity to show and document this potential improvement in energy recovery and reduction in air emissions from the conversion of methane produced by anaerobic sludge digestion to electrical power.''

FuelCell Energy's field trials are precursors to the DFC commercial market entry. Current field trials in operation or scheduled for 2001 include 250 kW DFC power plants at the University of Bielefeld and the Rhone Klinikum Hospital in Germany, at the headquarters of the Los Angeles Department of Water and Power, a 250 kW system in Japan for Marubeni and a 250 kW unit slated for the spring of 2001 at Mercedes-Benz U.S. International in Tuscaloosa, Alabama. Also slated for 2001 is a 3 kW DFC unit for the U.S. Coast Guard at the Cape Henry Lighthouse in Virginia to demonstrate fuel cell capabilities at remote sites. Discussions are underway with PPL EnergyPlus regarding site location for their first order of a 250 kW unit to be shipped later this year.

About Direct FuelCell® Technology

The growing demand in both private and public sectors for clean, efficient power in the US and around the world is driving interest in fuel cell technology. FuelCell Energy's DFC® technology, which uses a non-combustion, non-mechanical power generation process, has been proven to deliver cleaner, more efficient power than that generated by conventional power plants.

About FuelCell Energy, Inc. (www.fuelcellenergy.com)

Danbury, Connecticut-based FuelCell Energy, Inc. is a world-recognized leader in the development and commercialization of high efficiency fuel cells for electric power generation. The Company's Direct FuelCell technology eliminates external fuel processing to extract hydrogen from a hydrocarbon fuel. This results in a product whose cost, combined with high efficiency, simplicity and reliability, offers significant product advantages for stationary power generation. The Company has been developing DFC® technology for stationary power plants with the U.S. Department of Energy through the National Energy Technology Laboratory, whose advanced fuel cell research program is focused on developing a new generation of high performance fuel cells that can generate clean electricity at power stations or in distributed locations near the customer, including hospitals, schools, data centers and other commercial and industrial applications.

This press release contains forward-looking statements, including statements regarding the Company's plans and expectations regarding the development and commercialization of its fuel cell technology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, the risk that commercial field trials of the Company's products will not occur when anticipated, general risks associated with product development, manufacturing, changes in the utility regulatory environment, potential volatility of energy prices, rapid technological change, and competition, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.

-- K. (infosurf@yahoo.com), January 25, 2001

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