August 30, 2006

FuelCell Energy Boosts Electric Power Output of DFC Power Plants 20 Percent in Same Footprint; Increased Power Density Reduces Cost of Ultra-Clean Product; Company Taking Orders on New Units for Spring 2007 Delivery

<B>FuelCell Energy Boosts Electric Power Output of DFC Power Plants 20 Percent in Same Footprint; Increased Power Density Reduces Cost of Ultra-Clean Product; Company Taking Orders on New Units for Spring 2007 Delivery

DANBURY, Conn.--(BUSINESS WIRE)--Aug. 30, 2006--FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of ultra-clean electric power plants for commercial and industrial customers, today announced an advanced cell stack design that boosts the power output of its Direct FuelCell® (DFC®) power plants by 20 percent. The company is incorporating the enhancement across its entire line of power plants.

By improving thermal management of electrochemical activity within the stack, the company has increased the power output from each cell and can produce more electricity from the same basic power plant components. The 20 percent increase in electric power output, combined with the company's progress in its value engineering and ongoing cost-reduction programs, are integral to achieving FuelCell Energy's $3,200-3,500/kilowatt (kW) cost target at the end of this calendar year for its DFC3000 power plant.

"We continue to realize results from our comprehensive cost reduction efforts," said R. Daniel Brdar, FuelCell Energy President and CEO. "With additional technology-driven improvements we have under development, value engineering, supply chain development, and economies from volume production, we are positioned to meet the power needs of the broad market."

"Today's milestone demonstrates the ability of our people to execute our product development and cost reduction plans and is a major step in realizing the commercial potential of our products," he said. "Our talented and dedicated engineers, technologists and manufacturing employees are concentrating on capturing the power -- up to a 50 percent increase -- that is inherent in our technology. Now that we've successfully captured the first 20 percent, we're focused on achieving the balance in our ongoing product development plans."

Delivering more power directly enhances the value of a DFC product to customers by reducing their cost per kilowatt hour (kWh).

Manufactured in FuelCell Energy's commercial production facility, DFC power plants consist of one or multiple stacks, depending on system configuration and customer power requirements. All of the company's products, unmatched in the industry for efficiency, use common cell components so the up-rated stacks increase power output across the product line. The DFC3000 power plant increases to 2.4 megawatts (MW) from 2 MW. Similarly, power output of the DFC1500MA rises to 1.2 MW and the DFC300MA to 300 kW.

Validation tests of the enhanced cell stack in a DFC power plant confirmed the increased output. The company has begun incorporating the enhanced design in its production line. DFC products operating at the increased power output will be available for shipping as early as the second calendar quarter of 2007, and the company is now accepting customer orders for these products.

About FuelCell Energy, Inc.

FuelCell Energy develops and markets ultra-clean power plants that generate electricity with higher efficiency than distributed generation plants of similar size 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 45 power plant sites around the globe that have generated more than 108 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.

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: Media:
On-Message Public Relations for FuelCell Energy, Inc.
Jack Jackson, 781-898-9585 x-715
jack@on-message.com
or
Investors:
FuelCell Energy, Inc.
Steven P. Eschbach, 203-825-6000
seschbach@fce.com

SOURCE: FuelCell Energy, Inc.


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