CLIFTON, N.J., Mar. 21, 2001 — H Power Corp. (NASDAQ: HPOW), a leading fuel cell development company, and Osaka Gas Co., Ltd., the natural gas utility serving more than 6,000,000 customers in the Kansai area of Japan, today announced plans that H Power will develop a new 500 watt residential cogeneration fuel cell system for the Japanese residential market, using Osaka Gas’ compact fuel processor.

The new unit will incorporate H Power’s proprietary fuel cell technology and Osaka Gas’ proprietary steam reforming technology, which Osaka Gas will transfer to H Power nonexclusively through H Power’s marketing partner in Japan, Mitsui & Co., Ltd. Osaka Gas is scheduled to begin evaluation of the new systems at selected customer sites in Japan before year-end.

Yuji Matsumura, Head of Technology, Managing Director of Osaka Gas Co., Ltd., commented, “We believe that our reformer technology, combined with H Power’s cogeneration fuel cell expertise, is a marriage of world-class technologies that will produce an efficient, cost-effective fuel cell system well suited to the residential and apartment markets. We look to offer compact one kilowatt and 500 watt systems in Japan where the demand for low-power alternative energy sources is strong. When mass produced, we believe the low manufacturing cost, high durability and reliability of our reformers will help promote interest in H Power’s cogeneration fuel cell systems.”

H. Frank Gibbard, chief executive officer of H Power Corp., said, ” The fuel cell system we develop for Japan will also provide a technology base for new products in the United States and Europe, where we see a significant demand for 500 to 1000 watt systems. Osaka Gas’ compact fuel processor will add to the system’s appeal by reducing overall size. We anticipate production of the 500 watt systems for Japan as early as 2003.

“Clearly, as component technologies improve and mass production begins, consumers are rapidly recognizing fuel cells as the best alternative energy source for the future. Our work with Osaka Gas using their fuel processor enhances our presence in Japan, where H Power already has benefited from our distribution agreement with Mitsui & Co., Ltd.” H Power residential cogeneration fuel cell systems are currently being field-tested at various locations in the U.S., Canada, France and Japan. A new 80,000 square foot manufacturing facility in Monroe, North Carolina is scheduled to open in the second half of this year.

About H Power Corp.

H Power Corp. ( is a leading fuel cell development company and one of the first providers to complete a commercial sale of a proton-exchange membrane (PEM) fuel cell system. PEM fuel cells generate electricity efficiently and cleanly from the electrochemical reaction of hydrogen and oxygen. Hydrogen is typically derived from conventional fuels such as natural gas or propane, and oxygen is drawn from the air. H Power’s fuel cells are designed to provide electricity for a wide range of stationary, portable and mobile applications including residential cogeneration products for rural, remote homes, and backup power units for mobile applications.