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Environmental Power Announces Results for 2003.

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Business Editors

PORTSMOUTH, N.H.--(BUSINESS WIRE)--March 30, 2004

Environmental Power Corporation (OTCBB: POWR), an industry leader in the innovative development of alternative and renewable clean energy systems, again reported revenue in excess of $50,000,000 from its 22-year lease on the Scrubgrass waste-coal facility. Power generation revenues from Scrubgrass were $53,364,615 for 2003, as compared to $54,983,934 for 2002. The decrease in power generation revenues was primarily due to an unexpected shutdown of the Scrubgrass plant as a result of a blown transformer caused by a severe electrical storm, which reduced revenues by approximately $2,000,000. However, a 5% increase in power rates in 2003 and improved production capacity at Scrubgrass before and after the outage helped mitigate these losses. Scrubgrass operated at 86.6% of its capacity in 2003, as compared to 91.3% of its capacity in 2002. The decrease in the capacity rate was due to the unexpected shutdown.

Net income decreased to a net loss of $978,159 for 2003, as compared to net income of $1,138,383 for 2002. The decrease in net income was primarily due to the absence of sales of nitrous oxide (NOx) emission credits in 2003, whereas Environmental Power recorded $2,428,000 of such sales in 2002. The effect of this change was partially offset by decreases in additional lease expense and higher operating revenues at Scrubgrass prior to the unexpected shutdown described above.

Environmental Power operates in two distinct business segments through its subsidiaries, Buzzard Power Corporation, which holds the interest in the Scrubgrass facility, and Microgy Cogeneration Systems, Inc., Environmental Power's development stage business focused on the commercialization of a proprietary anaerobic digester system. Buzzard continued its long string of profitability with income before taxes of $1,854,443 for 2003. Microgy had...