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FuelCell Energy Selected by Department of Energy

7 March 2000

FuelCell Energy Selected by Department of Energy to Develop Hybrid Fuel Cell/turbine Power Plant

    DANBURY, Conn.--March 3, 2000--FuelCell Energy, Inc. (AMEX: FCL) has received notice that it has been selected to develop a $3.125 million program by the U.S. Department of Energy (DOE), including 20 percent cost sharing, to support the design of an ultra-high efficiency, fuel cell/turbine hybrid power plant based on FuelCell Energy's Direct FuelCell(TM) (DFC(TM)). The system proposes an innovative combination of the Company's Direct FuelCell with a turbine without requiring any combustion in the turbine, or pressurization of the fuel cell. The Company must still conclude final negotiations with the DOE.
    The program will include four critical steps: development of a high utilization fuel cell, development of key system components, a sub-scale test of a DFC/turbine hybrid system utilizing the 250kW DFC power plant currently providing electricity for FCE's Danbury facility, and the conceptual design of a 40MW power plant.
    "The hybrid system would be a significant additional product offering to our planned distributed generation power plant line," said Jerry D. Leitman, president and CEO of FuelCell Energy.
    "This grant is good news for FuelCell Energy, the greater Danbury economy, and for the future health of our country's environment. I was delighted to work with the people of FuelCell Energy to make it possible," said Congressman Maloney.
    The objective of the Vision 21 Program is to help develop a twenty-first century energy plant that would generate electricity with net efficiencies greater than 75% (with natural gas) and less than 0.01 lb/million Btu of sulfur and nitrogen oxide emissions. A 40 - 50% reduction in carbon dioxide emission is targeted. DOE's selection of the Company considered these criteria.
    FuelCell Energy, Inc., based in Danbury, Conn., is a leader in the field of high efficiency fuel cells for electric power generation. The Company's Direct FuelCell(TM) (DFC(TM)) technology eliminates the external fuel processing to extract hydrogen from a hydrocarbon fuel. This results in a simpler and more efficient system compared with conventional fuel cells. DFC technology is being commercialized in cooperation with industry customers and the U.S. Department of Energy's advanced fuel cell research program, which is managed by the Office of Fossil Energy's National Energy Technology Laboratory.

    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.