The project proposal from Proton is consistent with the Connecticut Clean Energy Fund's mandate to support projects that promote the commercialization of fuel cells and illustrate their importance as a clean, reliable distributed energy source.

"Connecticut's fuel cell industry is stimulating economic expansion in our state, is creating jobs, and is investing in research at our universities," said Karen Mendes, Project Manager for the Connecticut Clean Energy Fund. "Our support of Proton's project is another example of the progress of fuel cell technology and our success in bringing clean energy projects forward in Connecticut."

This demonstration project, which will use Proton's UNIGEN(R) RFC system, will offer a peak shaving/Uninterruptible Power Supply (UPS) backup power system for voice and data network equipment. The UNIGEN RFC system will serve as a peak shaver for the local grid during high congestion periods while using off-peak power to produce hydrogen fuel. The system will also serve as a 5kW backup power system for the site's selected critical loads.

Proton is teaming with Emerson Network Power, a pioneer in powering communications networks, on this $890,000 project. According to Project Manager Iris Shiroma, Proton is delighted about this venture with Emerson Network Power and is thankful to the Connecticut Clean Energy Fund for providing the pathway toward the commercialization of fuel cells.

Senior Vice President of Proton's Hydrogen Technology Group, Rob Friedland commented, "We are happy to be teamed with Emerson Network Power on this exciting project. With help from the Connecticut Clean Energy Fund, the major telecommunication companies are willing to evaluate fuel cells in communications networks, which is an important first step toward widespread adoption."

Emerson Network Power, with more than 65 years of history and experience in powering communications networks and a unique understanding of the industry, will lead the installation of the system. Emerson will also provide the enclosure of the system, which will house the RFC technology for the duration of the demonstration project.

About Connecticut Clean Energy Fund - An investment fund created by the Connectiicut General Assembly, the Connecticut Clean Energy Fund promotes the development and use of clean energy to benefit the citizens of Connecticut. Administered by Connecticut Innovations, CCEF is financed by a surcharge on ratepayers' electric utility bills. For more information visit http://www.ctcleanenergy.com.

About Proton Energy Systems, Inc. - Proton Energy Systems, Inc. designs, devellops, 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. (Nasdaq: DESC) 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 .

This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Statements contained herein concerning Proton's and Distributed Energy's goals, guidance, revenue projections and other statements that are not statements of historical fact, including statements concerning the fuel cell demonstration project, may be deemed to be forward-looking information. Without limiting the foregoing, words such as "anticipates," "believes," "could," "estimate," "expect," "intend," "may," "might," "should," "will," and "would" and other forms of these words or similar words are intended to identify forward-looking information. Proton's and Distributed Energy's actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. Proton Energy Systems and Distributed Energy each disclaim any obligation to update these forward- looking statements. Factors that could cause results to differ materially from those contained in Northern's and Distributed Energy's forward-looking statements include, but are not limited to, failure of our products and systems to perform as specified or achieve commercial acceptance, the impact of competitive products and systems and other factors detailed in Distributed Energy's Form 10-Q for the quarter ended June 30, 2004, and other filings Distributed Energy may make from time to time with the SEC.
 

Distributed Energy Systems Corp. Investor Relations,
+1-203-678-2355; General Info - Marilynn Meek of Financial Relations Board,
+1-212-445-8451

http://www.ctcleanenergy.com