Proton Energy Systems Receives $1.1 Million to Continue Work on Contract for Advanced Fuel Cell Development

Contract with the Naval Research Laboratory is funded by the Defense Advanced Research Projects Agency

WALLINGFORD, Conn., June 1 -- Proton Energy Systems, Inc., a subsidiary of Distributed Energy Systems Corp. , announced today the receipt of $1.1 million in additional funding to continue its Phase II project with the Naval Research Laboratory, or NRL, for advanced fuel cell technology development.

This award is based on Proton's progress in Phase I and Phase II for the development of a one kilowatt-scale prototype system for critical defense and aerospace applications. This effort is part of a Defense Advanced Research Projects Agency, or DARPA, "Water Rocket" program that applies Proton's technology to advanced space propulsion and energy systems. This program supports a broader "Orbital Express" initiative aimed at developing next generation serviceable satellites planned to provide significant improvements in U.S. military space operations capability.

Design goals of this high-pressure hydrogen/oxygen regenerative fuel cell system are reversibility, space operation, lightweight packaging, and fewer system components over state-of-the-art fuel cell designs.

Proton completed Phase I of this contract in early 2003 demonstrating the ability to electrolyze water to generate hydrogen and oxygen gases at pressures exceeding 3,000 psi. The efficient compression of these gases, a key feature in space-based, high energy density applications, is made possible by Proton's solid-state electrolysis cell stack design, called HIPRESS(TM).

Proton's Senior Vice President, Robert Friedland commented, "We are pleased that DARPA and NRL have chosen Proton and its contractor team to continue this project. Government sponsorship is an important part of advancing our regenerative fuel cell technology, which we believe will have far-reaching implications for military, aerospace, homeland defense and commercial applications."

Proton's contractor team for this effort includes Aerojet and ATK Thiokol Propulsion, who provide expertise on space and satellite technology implementation. The team also includes Schafer Corporation, Kare Technical Consulting and Myers Manufacturing Company, who provide additional aerospace expertise.

About Proton Energy Systems, Inc.

Proton Energy Systems, Inc. designs, develops, and manufactures Proton Exchange Membrane, or PEM, electrochemical products that it employs in hydrogen generating devices and in regenerative fuel cell systems that function as power generating and energy storage devices. Proton's HOGEN(R) hydrogen generators produce hydrogen from electricity and water in a clean and efficient process using its proprietary PEM technology. For more information visit http://www.protonenergy.com/.

About Distributed Energy Systems Corp.

Distributed Energy Systems Corp. creates and delivers products and solutions to the emerging decentralized energy marketplace, giving users greater control over their energy cost, quality and reliability. As the parent company of Proton Energy Systems (http://www.protonenergy.com/) and Northern Power Systems (http://www.northernpower.com/), Distributed Energy Systems delivers a combination of practical, ready-today energy solutions and the solid business platforms for capitalizing on the changing energy landscape. For more information visit http://www.distributed-energy.com/.