Energy Research Corporation Commissions Direct Fuel Cell Power Plant.

DANBURY, Conn.--(BUSINESS WIRE)--March 18, 1999--Energy Research Corp. (AMEX:ERC)--

Commissioning marks critical milestone on the road to

commercialization

Energy Research Corporation (AMEX:ERC) today commissioned its Direct Fuel Cell(TM) power plant. The fully integrated 250-kilowatt power plant uses pipeline natural gas to provide power to the Company's Danbury, Connecticut facilities, with excess electricity delivered to the local electric utility grid. Later this year, a field trial of a similar sized plant will be conducted in Europe by ERC's technology partner, MTU, a subsidiary of DaimlerChrysler (DCX).

Fuel cells are the cleanest and most efficient fossil fuel electric generators available

"We are very proud to have reached this stage in the commercialization of our Direct Fuel Cell technology," said Jerry D. Leitman, president and chief executive officer of ERC. "This power plant utilizes ERC's 250 kW commercial-design fuel cell stack, the basic building block of our megawatt-class power plants."

"ERC has been a long-time partner in the Department of Energy's quest to find cleaner, more efficient means to generate electricity with fossil fuels," said Ms. Rita Bajura, Director of the U.S. Department of Energy's Federal Energy Technology Center (FETC), in her remarks at today's ceremony where she officially "threw the switch" to start the power plant. "It is gratifying to see ERC's consistent progress in development and demonstration of fuel cell power plants and it is encouraging as we proceed to the next stage of the commercialization program."

Mr. Jeff Serfass, Executive Director of the Fuel Cell Commercialization Group, representing twelve electric utilities, commented, "The FCCG selected ERC and its Direct Fuel Cell(TM) technology several years ago as the most appropriate to meet the needs of the industry for distributed power generation. We are very pleased ERC has achieved this milestone. Our members are witnessing continued planned progress to commercial Direct Fuel Cell(TM) availability... they are preparing the acquisition documentation necessary for buying the first power plants!"

"Connecticut is at the center of the fuel cell world and Northeast Utilities wants it to stay that way. We are pleased to be able to take part in such an environmentally friendly technology," said William Stillinger, Director, Research & Environmental Planning of Northeast Utilities. "The Direct Fuel Cell(TM) plant offers us an important tool for meeting our increasing electricity demand while achieving environmental stewardship."

Plans for Commercialization: First European Commercial Field Trial Later This Year

ERC expects to initiate commercial field trials for its megawatt-class power plants beginning next year. ERC also plans commercial field trials of 250-kilowatt power plants designed in collaboration with its European partner, MTU, a subsidiary of DaimlerChrysler. Commercial power plants in both 250 kW-class and megawatt-class are expected to be available following the field trials.

"Our partnership with ERC enables our two companies to explore commercial opportunities across a wide range of sizes and commercial applications in Europe and North America," said Michael Bode Vice President of MTU. "We believe the possibilities are great for ERC's Direct Fuel Cell technology and for MTU's unique sub-megawatt system design, known as 'Hot Module'. We look forward to the startup of our first field trial 'Hot Module' power plant in Germany in the latter part of this year."

About the power plant

The power plant is expected to produce 250 kW of power, converting pipeline natural gas to AC electricity at an efficiency of greater than 50 percent. In other applications, the high-grade waste heat from the plant can be utilized for cogeneration, resulting in an anticipated overall efficiency of about 75 percent. Fuel cells are the cleanest and most efficient fossil fuel electric generators available. ERC's Direct Fuel Cell(TM) takes the inherent attractiveness of fuel cells one step further, by eliminating the external fuel processing to extract hydrogen from a hydrocarbon fuel. This results in a simpler and more efficient system compared to conventional fuel cells.

In the commercial plant, four of the 250 kW stacks are packaged in a nominal 1-megawatt module, one or more of which may be used to power hospitals, commercial buildings, and industrial plants. Fuels such as digester gas and landfill gas can also be used, thus producing useful energy from fuel sources that would otherwise pollute the environment.

In addition to Northeast Utilities (NU), representatives from Trigen Energy Corporation (TGN), Connecticut Light and Power, Duke Energy Services (DUK), Chugach Electric, Green Diamond Systems, EIL Petroleum, National Utility Investors and Santa Energy Services were among the more than 50 attendees. Others attending included the U.S. Coast Guard, the Maritime Administration, and key suppliers for the plant including ABB (ABBY), Fluor Daniel (FDGT), Exmet Corporation, Nippon Metal Industry, Allegheny Ludlum (ALT), Englehard Surface Technologies (EC) and O'Keefe Ceramics. Representatives from New York Power Authority, Bath Iron Works (GD), Alabama Municipal Electric Authority, Chicago Bridge & Iron (CBI) were among those who recently visited the power plant during preparation for operation and for discussions on the Company's plans for commercialization of Direct Fuel Cells for a range of applications.

Energy Research Corporation, located in Danbury and Torrington, Connecticut, is an internationally recognized leader in the field of electrochemical technology for electric power generation. ERC is developing its Direct Fuel Cells through funding from and in cooperation with government, electric utility and major international industrial organizations.

This press release contains forward-looking statements, including statements regarding the Company's plans and expectations regarding the development 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 ERC's Direct Fuel Cell Power Plant will not operate as efficiently as planned, the risk that ERC's commercial field trials will not be conducted as anticipated, general risks associated with product development, manufacturing and introduction, changes in the utility regulatory environment, potential volatility of energy prices, rapid technological change, and competition, as well as other risks set forth in ERC's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. ERC expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in ERC's expectations or any change in events, conditions or circumstances on which any such statement is based.