MTI MICRO DEMONSTRATES THIRD GENERATION MOBION® CHIP
Technology advancements support commercialization efforts for embedded applications

Albany, N.Y., September 18, 2008 — MTI MicroFuel Cells Inc. ("MTI Micro"), the developer of Mobion^® off-the-grid portable power solutions and a subsidiary of Mechanical Technology, Incorporated ("MTI") (NASDAQ: MKTY), today announced that its third generation Mobion^® Chip has improved power performance by approximately 25% as compared to the previous generation unveiled last June. In laboratory testing, the Mobion^® Chip demonstrated power of over 62 mW/cm² while producing more than 1800 Watt Hours Per Kilogram (Wh/kg) of energy from the direct methanol fuel feed.

In addition to the ongoing power performance improvements, the third generation Mobion^® Chip is approximately 25% smaller than the prior generation was in June 2007 and over 50% smaller than the initial generation at the beginning of 2007. "Our third generation Mobion^® Chip is a significant step forward in our commercialization efforts and is expected to generate interest among OEMs who are looking for increasingly efficient, innovative solutions to power their consumer electronics applications," said Peng Lim, Chairman and CEO of MTI. "We believe these results demonstrate our technological leadership and enhance our ability to deliver an alternative power source to OEMs." MTI Micro plans to target applications within the consumer market, including handheld communication devices and other power-hungry portable electronics applications, that can benefit from Mobion^®'s extended run-time, cord-free rechargeable power. "The combination of significant size reductions and improvements in power performance and efficiency are critical in our quest to bring Mobion^® inside portable electronic devices. We believe these important accomplishments support our vision for the future of embedded fuel cell applications," said Jim Prueitt, Vice President of Engineering and Operations for MTI Micro. The Mobion^® Chip is based on 100% methanol, passive water management, and direct methanol fuel cell technology, and represents a number of scientific breakthroughs that the Company believes will ultimately enable it to power portable devices longer than lithium-ion batteries, while allowing for instant, cord-free re-charging. By incorporating a power module with fluid conditioning, the Mobion^® Chip is designed to run in a wide range of environmental conditions, in temperatures from 0^oC to 40^oC and at any humidity level, which correspond to industry standards and have been adopted by many OEMs. In addition, MTI Micro´s Mobion® technology is protected by a patent portfolio that includes over 90 U.S. patent applications.

THIRD GENERATION MOBION® CHIP SPECIFICATIONS	MOBION® CHIPS
Technology Passive DMFC,100% methanol feed
Power Density Over 62mW/cm2
Energy from fuel Over 1800 Wh/kg
Temperature range 0oC to 40oC (C=Celsius)
Humidity 0% to 100%

About MTI MicroFuel Cells
MTI MicroFuel Cells Inc. ("MTI Micro"), a subsidiary of Mechanical Technology, Incorporated (NASDAQ: MKTY), is the developer of Mobion® off-the-grid portable power solutions. MTI Micro has a team of entrepreneurial business executives, researchers and scientists; a proprietary direct methanol micro fuel cell power system and a number of system prototypes demonstrating size reductions and performance improvements; and related intellectual property. MTI Micro has received government funding and developed strategic partnerships to facilitate efforts to achieve commercialization. More information is available at www.mtimicrofuelcells.com.

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Statements in this press release which are not historical fact including statements regarding management´s intentions, hopes, goals, beliefs, expectations, projections, plans, anticipation, outlook or predictions of the future are forward looking statements. Such statements include, among others, MTI Micro´s future business prospects, technology and performance; the market potential for MTI Micro´s Mobion® fuel cell systems and the progress it is making in developing and commercializing those systems for consumer applications; and, the importance of and benefits from any laboratory testing or Mobion® chip size reductions. All forward-looking statements are made as of today, and MTI Micro and MTI disclaim any duty to update such statements. It is important to note that MTI Micro´s and MTI´s actual results could differ materially from those projected in forward-looking statements. Factors that could cause the anticipated results not to occur include, among others, risks related to financing; uncertainties in development, manufacturing and competition; and the risk factors listed from time to time in MTI´s SEC reports including but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.