DANBURY, Conn -- FuelCell Energy, Inc., (Nasdaq: FCEL) has signed an agreement with Grand Valley State University to install and service a DFC300A fuel cell power plant for the Energy Institute's 26,000 square foot research center in Muskegon, Mich. Funding for the entire project, including the building and the fuel cells, is being provided for by a $3 million alternative energy grant from the Michigan Public Service Commission and bonding from the City of Muskegon.

The Company's Direct FuelCell(R) (DFC(R)) power plant will provide electricity and a heat recovery system for heating and cooling that advances energy technology applications in newly created research space, incubator facilities, conference center and classrooms. The project will also include a solar/photovoltaic installation that will provide hot water and hot air for heating and air conditioning. The state-of-the-art building is currently under construction and is expected to be completed by the fall of 2003.

This development will be the first commercial project in the world to integrate fuel cell technology, a heat recovery system for heating and air conditioning, photovoltaics and a nickel metal hydride battery storage system to store excess energy. The result will be a building that powers itself using green sources.

The project's goal is to develop and improve the quality and application of energy efficient technologies such as fuel cells for stationary base load power generation and to expand the market for such technologies.

"Having our DFC power plant as the center of this integrated alternative energy system will further demonstrate fuel cell technology as a key clean, efficient and reliable source of base load power for an institutional application," said Jerry D. Leitman, Chairman and CEO of FuelCell Energy, Inc. "We are delighted to be working with the innovative leaders at Grand Valley State University and appreciate the support of the Michigan State Public Service Commission and the City of Muskegon."

Tim Schad, vice president for finance and administration at Grand Valley, is pleased with the many partners working together in this project.

"Michigan is poised to be a leader in the application of fuel cell technologies in both stationary and mobile applications," explained Schad. "The Muskegon SmartZone is a joint venture between Michigan Economic Development Corporation, City of Muskegon and Grand Valley State University for the purpose of research and business incubation in alternative energy."

"Grand Valley's research center will serve as a model of how fuel cell technology can be used efficiently as an alternative source of power," said U.S. Rep. Pete Hoekstra, R-Michigan 2nd District. "I anticipate that it will become the premier institution for alternative energy research and development as people from throughout the world come to West Michigan to study and advance the technology."

FuelCell Energy's DFC300A power plant will be delivered and installed in the fourth calendar quarter of 2003.