DANBURY, Conn.-- FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of ultra-clean and efficient electric power generation plants for commercial and industrial customers, today announced that its patented Direct FuelCell/Turbine(R) (DFC/T(R)) achieved a record-setting performance -- establishing a mark of 56 percent electrical efficiency in the sub-megawatt (sub-MW) class for 800 continuous hours during initial testing.

This significantly exceeds the electrical efficiency of other distributed generation technologies of similar size. For example, gas engines have an electrical efficiency of 30 to 42 percent, low temperature fuel cells have an electrical efficiency of 30 to 35 percent and microturbines have an electrical efficiency of 25 to 30 percent.

Victor Der, Director of Clean Energy Systems in the U.S. Department of Energy's (DOE) Office of Fossil Energy, and Wayne Surdoval, Technology Manager in DOE's National Energy Technology Laboratory, visited FuelCell Energy's Danbury, Conn. headquarters to dedicate the DFC/T power plant.

"The DFC/T represents a significant advance for ultra-clean, high efficiency fuel cell/turbine technology," said Surdoval.

"The DFC/T power plant's 56 percent electrical efficiency is unmatched anywhere in the industry for distributed generation products in its size range and has the potential for customers to substantially reduce their energy costs," said R. Daniel Brdar, President and CEO of FuelCell Energy. "This sub-MW combined cycle system will be an ideal ultra-clean, reliable base load product for smaller commercial and industrial customers with a demand for electric power only and will complement our DFC power plants that are designed for combined heat and power applications."

FuelCell Energy has been developing the DFC/T product following an initial Vision 21 Program contract award from DOE in 2000. The DFC/T system is based on FuelCell Energy's 250 kilowatt (kW) Direct FuelCell(R) (DFC(R)) power plant and an integrated 60 kW microturbine from Capstone Turbine Corporation. Heat generated by the fuel cell is used to drive a modified unfired microturbine to generate additional electricity. The supplemental microturbine power increases the electrical efficiency and reduces the cost of power generated without using additional fuel. The combined-cycle DFC/T system has the same ultra-clean emissions profile of FuelCell Energy's Direct FuelCell(R) (DFC(R)) power plants.

In 2002, the original contract was expanded to include this alpha unit for operation at the FuelCell Energy's testing facilities in Danbury and, subsequently, at a customer site - the Deaconess Billings Clinic in Montana - where it will provide ultra-clean, reliable and firm, base load electricity for this hospital. The program includes a beta unit, also for operation at a customer site, which is expected to be built in 2007. Total contract value from program inception through the beta unit is approximately $19.3 million that is cost-shared between 20 and 50 percent, depending on the task, with the DOE.

"Our microturbines are a perfect complement to the ultra-clean operation of FuelCell Energy's DFC products," said John Tucker, CEO of Capstone Turbine, who was in Danbury for the dedication event. "It's exciting when FuelCell Energy's power generation products are combined with our systems to attain unprecedented levels of efficiency."

FuelCell Energy expects target customers to be commercial and industrial customers with a need for electric power only, such as industrial companies or small grid-support applications.

FuelCell Energy has also developed designs for a 10-40 megawatt (MW) DFC/T power plant that is expected to achieve 70 percent or greater electrical efficiency. This approaches the objective of the DOE's Vision 21 Program of developing larger, multi-MW power plants that will generate electricity with net efficiencies approaching 75 percent on natural gas with near-zero emissions. In comparison, a state-of-the-art combined cycle gas turbine plant can reach 55 to 60 percent electrical efficiency, but is typically 200 MW or greater in size. FuelCell Energy expects this multi-MW DFC/T power plant, upon successful product development, would be suitable for larger-scale power generation opportunities, particularly in grid constrained locations, in regions where Renewable Portfolio Standards programs are being implemented and other areas that may require flexible, ultra-clean and high efficient power.

About FuelCell Energy
FuelCell Energy Inc. develops and markets ultra-clean power plants that generate electricity and heat with higher efficiency than 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 generation sites around the globe that have produced more than 80 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 HotModule(R) balance of plant design from MTU CFC Solutions, GmbH.