">FuelCell Energy Selected by Department of Energy to Advance High Temperature Polymer Exchange Membrane Technology for Power Generation Applications

Company to Be Part of Energy Secretary Bodman's Five-Year, $119 Million Program to Advance Fuel Cell Development and Reduce America's Dependence on Foreign Oil

DANBURY, Conn.--(BUSINESS WIRE)--Feb. 1, 2006-- FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of efficient, ultra-clean electric power generation plants for commercial and industrial customers, today announced that it has been selected by the U.S. Department of Energy (DOE) for a five-year, $2.1 million cost-shared project to develop a high temperature membrane for low humidity operation of Polymer Electrolyte Membrane (PEM) fuel cells, subject to final negotiation of an agreement. FuelCell Energy was awarded one of 12 competitively bid projects that will receive a total of $19 million in federal funding for polymer membrane research. The overall goal of this research is to advance membrane durability and extend shelf-life, while simultaneously bringing down its cost.

The project includes the development of a composite membrane for high temperature (120(degrees)C) PEM fuel cell operation. The composite membrane is intended to have the mechanical strength and water retention capability required for efficient operation and reduced system cost. Traditional PEM fuel cells operate at approximately 60(degrees)C to 80(degrees)C and operation at higher temperatures would reduce cost and increase efficiency. FuelCell Energy's high temperature experience from its carbonate and solid oxide fuel cell programs and the development of highly functionalized fuel cell membranes for phosphoric-acid and PEM fuel cells over the past 20 years make it uniquely qualified for this project.

The project award is part of a broader program announced on Jan. 24, 2006, by Energy Secretary Samuel W. Bodman totaling $119 million in funding and including a roadmap aimed at identifying and overcoming the technical and manufacturing challenges associated with the further development of commercially available hydrogen fuel cell vehicles. The DOE will provide $100 million over four years for additional research projects seeking to improve fuel cell membranes, water transport within the stack, advanced cathode catalysts and supports, cell hardware, innovative fuel cell concepts, and effects of impurities on fuel cell performance and durability.

"Investment in fuel cell and hydrogen research today will enable America to lead the world in developing clean, hydrogen powered automobiles that will reduce our dependence on imported oil," said Secretary Bodman. "This funding will help overcome the technical barriers and bring hydrogen and fuel cell technology from the laboratory to the showroom."

"This project award by the DOE recognizes our expertise in all fuel cell research and development," said R. Daniel Brdar, President and CEO of FuelCell Energy. "It shows that we are a part of this nation's drive for high efficiency and environmentally responsible power generation to help attain the country's goal of reducing harmful emissions and increasing energy independence."

Last week's announcement is part of the $1.2 billion Hydrogen Fuel Initiative announced by President Bush in his 2003 State of the Union Address. This initiative has the potential to reverse America's growing dependence on foreign oil by developing the technology for commercially viable hydrogen-powered fuel cells - a way to power cars, trucks, homes and businesses that produce no pollution and no greenhouse gases.

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.

This news 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.

CONTACT: FuelCell Energy, Inc.
Investors and Media:
Steven P. Eschbach, CFA, 203-825-6000
seschbach@fce.com

SOURCE: FuelCell Energy, Inc.