California State University Northridge Buys 1 Megawatt Ultra-Clean FuelCell Energy Power Plant to Help Meet Its Green Energy Mandate.

DANBURY, Conn. -- Efficient, quiet, on-site generation to provide cost-effective firm base load power while meeting university's clean energy policy; represents largest university fuel cell installation

FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of ultra-clean and efficient electric power generation plants for commercial and industrial customers, and its partner Alliance Power Inc., today announced the sale of a 1 megawatt (MW) fuel cell power plant to California State University, Northridge (CSUN) for a combined heat and power application to help the university meet its goals for greater energy independence, capital growth, cost management and increased use of green power.

The high efficiency Direct FuelCell(R) (DFC(R)) power plant will generate base load electricity for the university's facilities and surplus heat for hot water. Uniquely, the university also plans on routing exhaust from the heat exchanger into an adjacent greenhouse and arboretum to enhance photosynthesis, boosting plant growth and harvests by 10 to 40 percent. The carbon dioxide enrichment potential provided by the fuel cell plant may be used for specialized plant research, or as a convention of study within the regular biology academic program -- an opportunity rarely made available to baccalaureate biology students.

The DFC power plant will be commissioned in the second half of 2006 and operated by CSUN with technical support from FuelCell Energy and Alliance Power.

Students have provided significant support for clean energy technology initiatives, and the California State University (CSU) has established itself as the nation's leading academic institution taking action to stop global warming. After two years of lobbying by students, the CSU Board of Trustees voted unanimously for one of the most comprehensive university policies on clean energy in the U.S. Part of the resolution called for all new buildings beginning in 2006/2007 to meet the CSU Sustainability Measurement System certified level which shall be equivalent to Leadership in Energy and Environmental Design (LEED) certified, with regard to the microclimates and physical diversity of the CSU campuses. Campuses are encouraged to strive for Silver level performance (http://www.usgbc.org/FileHandling/ show_general_file.asp?DocumentID=913) (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) within budget constraints. The policy also encouraged clean and ultra-clean cogenerating energy technologies including fuel cells. CSUN began its drive to install onsite power generation from clean technologies in 2002 with the installation of 692 kilowatts of solar panels that provide a portion of the campus' peaking electricity requirements.

"DFC power plants will provide us with a base load option that reduces the strain on the California grid, improves our energy independence and power reliability, manages our energy and operational costs well into the future, and helps the environment," said Tom Brown, Director of Physical Plant Management, CSUN. "In leading by example, we are demonstrating how clean electricity can cost effectively power our campus."

CSUN's unit will be the single largest fuel cell power plant at any university in the world and is the seventh DFC plant of any capacity installed at a university. Institutions of higher education represent an excellent application of fuel cells' 24/7 electrical generation -- where they can power academic facilities during the day and address critical base load needs at night.

Because the units are quiet and environmentally friendly, they often can be installed close to the classrooms and dorms where energy is needed. Other university sites with DFC power plant installations include Yale University in Connecticut; Ocean County College in New Jersey; Grand Valley State University in Michigan; State University of New York at Syracuse; Chosun University Hospital in Korea; and Pohang University in Korea. The combined heat and power market potential for college and university applications in California exceeds 340 MW according to a 2000 study by Onsite Sycom Energy Corporation prepared for the U.S. Department of Energy.

"Universities have used cogeneration to great effect in the past, and now we're seeing students press their institutions to create and use even more clean energy," said R. Daniel Brdar, President and CEO of FuelCell Energy. "This is a market that's expanding, and it comprises many megawatts for colleges and universities around the country. California's state university system alone is the largest in North America."

California continues to lead the way in supporting fuel cell technology by providing financial and regulatory support. FuelCell Energy's DFC products meet the California Air Resources Board (CARB) stringent emissions requirements for 2007. By meeting these standards, DFC power plants are categorized as ultra-clean distributed generation technology which helps streamline the permitting process, and qualifies FuelCell Energy's DFC products for preferential rate treatment by the California Public Utilities Commission (CPUC), such as the elimination of exit fees and stand-by charges for customer electric generation.

Southern California Gas, administrator for the CPUC's Self Generation Program for the Northridge area, issued a reservation letter that will provide incentive funding of up to $2.25 million of eligible project costs and the Los Angeles Department of Water and Power has committed an additional $500,000 incentive to the CSUN DFC power plant installation.

"We continue to see strong demand for ultra-clean onsite power generation in California, with many customers looking for megawatt-class DFC installations for firm, base load combined heat and power applications," said James Michael, President of Alliance Power. "The high efficiency and ultra-clean DFC power plants address two significant issues in the California market -- high energy costs and strict air quality standards."

The high efficiency of DFC power plants not only results in less fuel needed per unit of power output and lower operating costs, but reduced amounts of carbon dioxide. By generating power without combustion, there are significantly less harmful pollutants, such as nitrogen oxides, sulfur oxides and particulates.

California State University, Northridge has 33,000 full- and part-time students and offers 63 bachelors and 48 masters degrees as well as 28 education credential programs. Founded in 1958, CSUN is among the largest single-campus universities in the nation and the only four-year public university in the San Fernando Valley. The university serves as the intellectual, economic and cultural heart of the Valley and beyond.

About FuelCell Energy

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 40 power plant sites around the globe that have generated more than 94 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(R) balance of plant design from MTU CFC Solutions, GmbH.

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.