Laidlaw Energy Group Signs Definitive Agreement for Renewable Energy Project with New York State Energy Research & Development Authority (NYSERDA)

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Laidlaw Energy Group, Inc. announced today that it has signed a definitive agreement with the New York State Energy Research & Development Authority (NYSERDA) for a one million dollar grant awarded LLEG by NYSERDA earlier this year in connection with LLEGÂ?s Ellicottville, New York renewable energy project.

- Laidlaw Energy Group, Inc. (Ticker Symbol: “LLEG”) announced today that it has signed a definitive agreement with the New York State Energy Research & Development Authority (NYSERDA) for a one million dollar grant awarded LLEG by NYSERDA earlier this year in connection with LLEG’s Ellicottville, New York renewable energy project. The project involves the conversion of a natural gas fueled cogeneration plant into one that will solely utilize a renewable fuel source - clean wood chips. In addition to providing electricity to New York homes and businesses, the plant will also generate enough heat and power to operate an on-site hardwood lumber dry kiln operation. The grant funds will be used to partially fund the cost of converting the facility to wood fuel.

The Laidlaw Energy facility, which is comprised of both a 5 megawatt electric generation facility and a hardwood lumber kiln drying business, known as Quality Lumber Services, was forced to close in early 2003 due to the high price of natural gas. The conversion of the facility to clean wood fuel will not only allow the facility to re-open, but will also allow Laidlaw Energy to increase the plant’s electric generation capacity to 7 megawatts – enough electricity for approximately 7,000 homes. The fuel conversion will also provide the additional energy needed to expand the facility’s hardwood lumber drying capacity.

The excess heat resulting from the generation process will continue to be utilized by Quality Lumber Services to kiln dry hardwood lumber for numerous area mills, concentration yards and direct end users. The low cost of the heat from wood fuel that will be utilized by Quality Lumber Services will allow Quality Lumber to charge a very competitive price for its services as compared with kilns fueled by natural gas. By utilizing the heat from the wood fuel to both generate clean energy and to kiln dry hardwood lumber, this plant will achieve substantially greater efficiencies than stand-alone generation facilities. The facility’s high rate of efficiency, coupled with its renewable fuel source, are believed to be among the key reasons the LLEG project was selected to receive NYSERDA’s maximum grant award. Other recipients of this prestigious award include projects sponsored by Siemens, Northern Power and the New York Times Company.

In a letter to NYSERDA supporting the LLEG project, Kevin King, Executive Director of the Empire State Forest Products Association noted: “ ESFPA is a strong supporter of biomass power plants utilizing low grade wood and wood residue, since markets for such products are critical to the economic health of New York’s forest products industry. “

With respect to environmental matters, the plant is designed to meet and exceed all environmental regulations regarding air and water quality, noise, and traffic. Additionally, unlike fossil fuel fired facilities, the Laidlaw Energy facility will not contribute to the production of acid rain or global warming, since wood fuel contains no Sulfur and is widely considered to be CO2 neutral.

The plant currently holds a Title V air quality permit and will be required to obtain an air quality permit from the state of New York prior to the resumption of operations, which is expected to occur during the summer of 2005.

LLEG believes that its fuel conversion project can serve as a role model for other projects throughout the region, where renewable fuel sources used for electric generation can be coupled with the thermal needs of manufacturing businesses to result in high rates of efficiency and favorable economics. Such projects have the potential to serve as a driving force behind lower energy costs, reduced dependence on foreign oil and a cleaner environment, as well as the retention and creation of manufacturing jobs. Indeed, in a letter of support for the project to NYSERDA, Senator Hillary Rodham Clinton referred to this project as: “smart for the environment, smart for our natural security, and smart for the local economy.”

This communication contains statements expressing expectations of future events and/or results which may include, without limitation, statements concerning anticipated financial performance, business prospects, technological developments, potential markets, new products, research and development activities and similar matters. Such statements constitute forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. All statements based on future expectations rather than historical facts are forward-looking statements that involve a number of risks and uncertainties, and LLEG cannot provide assurance that such statements will prove to be correct. LLEG undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Corporate Contact:

Michael B. Bartoszek

Tel. 212-480-9884

Fax 212-480-8448

Source: Laidlaw Energy Group, Inc.

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Michael Bartoszek
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