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

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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