ALBANY, N.Y.-- MTI MicroFuel Cells Inc. (MTI Micro), developer of the award-winning Mobion® micro fuel cell technology for handheld electronic devices and a subsidiary of Mechanical Technology Incorporated (MTI) (Nasdaq: MKTY - News), today announced that the U.S. Department of Energy (DOE) Office of Hydrogen, Fuel Cells and Infrastructure Technologies has reinstated MTI Micro's funding for a cost-shared program originally awarded in May 2004.

The program -- temporarily suspended in 2006 awaiting federal appropriations and funding - has been extended until 2008 and is expected to result in up to $1.8 million in funding, which will be matched by a like amount from MTI Micro for a total amount of $3.6 million for the remaining term of the contract. The initial 2007 release of funding for this program is $0.500 million.

By continuing to develop mass manufacturing techniques while simultaneously optimizing its unique Mobion® technology platform, this effort is expected to contribute to MTI Micro's planned improvements in cost reduction, reliability and performance and support MTI Micro's commercialization timeline, including the commencement of manufacturing readiness for Mobion® consumer products in 2008 and the shipment of products in the consumer market in 2009.

"We are very pleased with the continuing support from the Department of Energy in bringing fuel cells to market by providing resources to help promote and develop high volume manufacturing processes and reduce per-unit fuel cell production costs," said Peng Lim, CEO of MTI Micro. "This program will help support our product launch objectives and provide a pathway that will benefit the fuel cell industry in terms of a stronger supply base, reduction of costs and proliferation of fuel cells as an alternative source of portable power."

About MTI MicroFuel Cells

MTI MicroFuel Cells Inc., a subsidiary of Mechanical Technology Incorporated, (Nasdaq: MKTY - News), is the developer of the award winning Mobion® direct methanol micro fuel cell technology. The Company has a world-class team of entrepreneurial business executives, researchers and scientists; a number of system prototypes demonstrating size reductions and performance improvements; significant related intellectual property; and has received government awards and developed strategic partnerships to help accelerate commercialization. More information is available at http://www.mtimicrofuelcells.com.

About The U. S. Department of Energy

The U.S. Department of Energy's overarching mission is to advance the national, economic, and energy security of the United States; to promote scientific and technological innovation in support of that mission; and to ensure the environmental cleanup of the national nuclear weapons complex.