DANBURY, Conn.--FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of ultra-clean electric power generation plants for commercial and industrial customers, today announced that its Korean strategic alliance distribution partner POSCO has formed a partnership with one of the country's six electric utilities to market and sell fuel cell products for grid support applications.

As part of this arrangement, POSCO will install and operate a 250-kilowatt Direct FuelCell® (DFC®) power plant from FuelCell Energy at the Bundang plant of Korea-South East Power (KOSEP), located in Gyeonggi province, South Korea. The companies also have agreed to co-develop and market fuel cells as part of an effort to enhance the competitiveness of this ultra-clean energy source in the global market.

KOSEP is a subsidiary of KEPCO, which formerly was the Korean national power company until six subsidiary companies were spun off as part of the country's deregulation of its electric power industry. KOSEP's gross generating capacity last year was 37 terawatt hours of electricity, or 10.2 percent of the country's overall generating capacity. The alliance and sale of the 250-kW power plant was reported in October 23rd editions of the Korea Herald Journal.

KOSEP's parent company, KEPCO, is the largest among nine energy suppliers to have signed an agreement with Korea's Ministry of Commerce, Industry and Energy committing them to develop new energy sources. The nine firms jointly have agreed to invest a combined 1.1 trillion won (approximately $983 million) in developing new energy resources over the next three years.

Utilities are one of FuelCell Energy's targeted vertical markets. The company anticipates that the POSCO-KOSEP partnership will be a positive step for selling its fuel cell products into grid-support applications in the Korean market.

About POSCO

POSCO (http://www.posco.co.kr), founded in 1968, is Korea's largest integrated steelmaker. Headquartered in the southeastern port city of Pohang, South Korea, POSCO produced 29 million tons of crude steel products, and reported record sales of US$12.05 billion and net income of US$1.66 billion in 2003. As the world's leading steel producer, POSCO manufactures and sells a line of steel products, including hot rolled and cold rolled products, plates, wire rods, flat rolled magnetic steel sheets and strips, electrical steel sheets and stainless steel products. POSCO is also rated A3/Moody's and A-/S&P, the highest credit ratings assigned to the world's integrated steelmakers.

About FuelCell Energy

FuelCell Energy develops and markets ultra-clean power plants that generate electricity with up to twice the efficiency of conventional fossil fuel plants and with virtually no air pollution. Fuel cells produce base load electricity giving commercial and industrial customers greater control over their power generation economics, reliability and emissions. Emerging state, federal and international regulations to reduce harmful greenhouse gas emissions consider fuel cell power plants in the same environmentally friendly category as wind and solar energy sources -- with the added advantages of running 24 hours a day and the capacity to be installed where wind turbines or solar panels often cannot. Headquartered in Danbury, Conn., FuelCell Energy services over 40 power plant sites around the globe that have generated more than 78 million kilowatt hours, and conducts R&D on next-generation fuel cell technologies to meet the world's ever-increasing demand for ultra-clean distributed energy. For more information on the company, its products and its worldwide commercial distribution alliances, please see www.fuelcellenergy.com.

Direct FuelCell, DFC and DFC/Turbine are registered trademarks of FuelCell Energy, Inc. All other trademarks are the property of their respective owners. The Company's sub-megawatt DFC fuel cell power plant is a collaborative effort combining its Direct FuelCell technology with a Hot Module® balance of plant design from MTU CFC Solutions, GmbH, a subsidiary of DaimlerChrysler.