Powerhouse Ener Regulatory News (PHE)

4 October 2011

PowerHouse Energy Group plc

("PowerHouse", the "Group" or the "Company")

Pyromex begins manufacturing first commercial order for a

 Pyromex Waste to Energy Reactor

PowerHouse Energy Group plc announces that Pyromex Holding SA ("Pyromex"), in which the Company has a 30 per cent. interest and an option to acquire the remaining 70 per cent. has commenced the manufacturing of a 5 tonne per day Pyromex Ultra High Temperature Gasification reactor. Pyromex, licensor of the Pyromex gasification technology, has received its first milestone payment under a sales contract with an Italian company and has started production of the first commercial UHGT reactor unit in Switzerland.

The contract is for a 5 tonne per day reactor and ancillary equipment to be installed in an abattoir in Italy and will run on a continuous feedstock of bone meal, a waste product that is considered toxic and harmful to human health. Delivery, installation and commissioning of the system are planned for Q1-2012.

This important commercial milestone follows more than a dozen years of investment into developing the UHTG reactor by Pyromex, signalling the transition from development to commercialisation of this breakthrough product.

As previously announced, trials continue on the larger 25 tonne per day capacity Pyromex reactor located near the Munich Airport at a commercial waste transfer station. This 25 tpd unit is owned by Pyromex and will process industrial waste for commercial tipping fees and supply/sell approximately 1.3MW to the German electricity grid.

Ross Lyndon-James, Executive Chairman of PowerHouse Energy Plc, commented:

"The commencement of manufacturing and the receipt of a first payment by Pyromex are watershed moments in the growth of PowerHouse Energy. Both developments confirm the commerciality of the UHTG reactor and represent the tipping point from a pre-sales pipeline to actual sales. This sales momentum will continue and grow following completion of the trial operation period currently taking place in Munich."

For additional information please contact:

PowerHouse Energy Group plcPh: +44 (0) 20 7887 1362Fax: +44 (0) 121 585 6228Email: inquire@powerhousegroup.co.uk

Merchant Securities Limited (NOMAD and Broker)

David Worlidge/Simon Clements

+44 (0) 20 7628 2200

Pelham Bell Pottinger

Nick Lambert / Charles Stewart

+44 (0) 20 7861 3232

About PowerHouse Energy Group plc

·; PowerHouse Energy Group plc is a leading provider of economically proven, on-site, clean energy systems that use traditional and renewable forms of fuel to generate electric and thermal energy in an environmentally responsible way

·; PowerHouse offers a complete turnkey waste/biomass to energy equipment solution either by: direct sale or energy supply under long term power purchase agreements

·; PowerHouse's shares trade on AIM under the ticker (PHE)

·; On 3 August 2011, PowerHouse entered a conditional agreement with Pyromex Holding AG's majority shareholder under which the company has the right to acquire the remaining 70% of the shares in Pyromex for a maximum consideration of £33 million. The agreement is conditional upon PowerHouse completing its due diligence to its satisfaction and final approval of the PowerHouse Board. PowerHouse's right to complete the transaction must be exercised by 31 December 2011

About Pyromex Holding AG

·; Pyromex is the developer and owner of zero emission, ultra-high temperature waste-to-energy gasification technology which PowerHouse has under licence from Pyromex and upon which PowerHouse's manufacturing and sales business is based.

·; PowerHouse has a technology licence agreement with Pyromex under which it has a sole and exclusive licence to manufacture, market, use own and operate ultra-high temperature thermal reactors in North America, Central America, the surrounding islands, Nigeria, Australia and New Zealand and a non-exclusive licence in the Middle East and North Africa (but excluding Nigeria), the Gulf Co-operation Council (made up of Kuwait, Bahrain, Saudi Arabia, Qatar, United Arab Emirates and Oman), French Polynesia, South Pacific, Asia (but excluding India) and United States Territories.