Environmental Power Corp.’s Microgy subsidiary executes agreement for construction and sale of first digester project

PORTSMOUTH, N.H., Dec. 22, 2003 — Environmental Power Corp. announced that its subsidiary, Microgy Cogeneration Systems Inc. signed an agreement with an entity owned by Wild Rose Dairy, LLC of LaFarge, Wis., pursuant to which Wild Rose will purchase a new waste digester system based on Microgy’s anaerobic digestion technology.

The Wild Rose project represents the first facility in connection with Microgy’s relationship with Dairyland Power Cooperative, under which Microgy expects to construct approximately $60 million of projects in Dairyland’s service territory.

The Wild Rose digester system will use manure from Wild Rose’s dairy operations to create and supply biogas to a 0.775 MW generator to be constructed by Microgy and owned by Dairyland.

The Dairyland Board of Directors has approved the Wild Rose project, and Dairyland and Wild Rose are expected to execute a biogas supply agreement in the immediate future. Microgy’s agreement with Wild Rose also provides Microgy with the right to operate and maintain the digester for the duration of its operational life.

Robert Thelen, owner of Wild Rose, stated, “I am deeply impressed by Microgy’s technology. It represents an elegant solution to a number of challenges faced by farms like Wild Rose. By installing Microgy’s digester technology on my farm, I expect to be able to operate in a more environmentally-friendly fashion while also creating a valuable, income-producing asset.”

Andy Livingston, Microgy’s President, stated, “The execution of this agreement with Wild Rose represents a significant step forward for Microgy’s business. We are excited about working with Robert Thelen, a forward-thinking leader in the Wisconsin dairy industry, and are confident that, working together, we will create a model for farms throughout Dairyland’s territory to enjoy the benefits of this technology.”

Kam Tejwani, Chief Executive Officer of Environmental Power, stated, “The Wild Rose project represents our first commercialization of Microgy’s technology in North America, as well as the first realization of a project from our $152 million sales pipeline. We believe that our backlog of projects ready to enter construction will increase substantially even as we continue to increase our sales pipeline by identifying additional market opportunities.”

About Environmental Power Corporation

Environmental Power Corporation is an entrepreneurial energy company established in 1982 with annual revenues in excess of $50 million. The company focuses on environmentally sound power generation and anaerobic digestion systems. For more information visit the company’s web site at www.environmentalpower.com.

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