ThermoEnergy Announces $1.5MM Funding for Its Zero Air Emission Power Plant Development Program.

LITTLE ROCK, Ark. -- ThermoEnergy Corporation (OTCBB:TMEN) announced today recent funding, through the Alaska Energy Authority (AEA), of a $1,500,000 grant by the US EPA to design, build and operate an initial prototype of the Company's patented new zero air emission power plant design known as the ThermoEnergy Integrated Power System, or TIPS. This prototype plant, which will be housed at the Canadian energy laboratory (CANMET) in Ottawa, will provide the process data the Company needs for the design and construction of a commercial scale multi-megawatt demonstration facility in 2009.

"A successful TIPS development program could significantly change the way in which coal-rich countries such as the US, China and India generates power from their vast resources," said Dennis C. Cossey, CEO of ThermoEnergy Corporation. "Excessive airborne emissions of NOx, SOx, mercury, particulates and CO2 from coal-fired power plants will become a thing of the past."

TIPS is the realization of over six years of basic research and development and represents a totally different thermodynamic approach in power plant design. Based on well known and reliable oxyfuel chemistry, TIPS is equal parts evolutionary and revolutionary technology. It combines the combustion of carbonaceous fuels - coal, natural gas, oil and biomass - with essentially complete recovery of all by-products; including CO2 in pressurized liquid form for sequestration or beneficial reuse. The evolutionary part of TIPS involves elevating the pressure at which conventional oxyfuel process systems work - in fact, virtually all of its process components are off-the-shelf items. The revolutionary part is the resulting process efficiencies and environmental performance. Whether as a retrofit or new construction, TIPS promises to provide industrialized nations with a seamless and economically stable pathway from almost total dependence on fossil fuels to renewable and green energy technologies of the future.

A recent study by CANMET, entitled "Feasibility Study of the ThermoEnergy Integrated Power System (TIPS) Process," described TIPS as a new generation power cycle that appears to have many technical and economic advantages over existing clean coal technologies currently identified in both Canada and the USA (a copy of the full report will soon be available on ThermoEnergy's website). While public utilities represents a key market, TIPS also provides a unique solution to high energy costs for many infrastructure industries such as chemical processing, oil refineries, and pulp & paper among others due to their high energy requirements. "The simplicity of the TIPS approach leads us to believe that TIPS can achieve the high plant reliability required by the electric utility industry," said Alex Fassbender, CTO of ThermoEnergy Corporation.

Those joining ThermoEnergy, the US EPA and AEA on the TIPS development 'Team' include Reaction Systems Engineering (RSE) of Kent, UK, University of Nevada (UNR), Professor Gregory McRae (of MIT) and CANMET. AEA, representing the US EPA, is Project Manager and ThermoEnergy is the lead contractor for the project.

The project received key support from Senator Ted Stevens (R-Alaska). "This contract will allow experts from the State of Alaska to make significant progress in reducing harmful air emissions of pollutants like carbon dioxide," said Senator Stevens. "AEA's work is critical to ensuring the health of our environment. Alaska has long been a leader in the development of new energy technologies; this AEA project, done in conjunction with ThermoEnergy, will be part of the next chapter in our great history."

About ThermoEnergy

Founded in 1988, ThermoEnergy is an infrastructure technologies company engaged in the worldwide commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com.

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