Thermal Energy's $4 million FLU-ACE® Heat Recovery Project at Kruger
Products' Gatineau mill now in operation.

OTTAWA, Dec. 7 /CNW/ - Thermal Energy International Inc, (TSX-V: TMG) (www.thermalenergy.com) ("Thermal Energy" or the "Company") is pleased to announce that the $4 million FLU-ACE® heat recovery project at Kruger Products Limited's tissue mill in Gatineau, Quebec, originally announced December 23, 2009, is now in operation and performing in line with expectations.

The FLU-ACE® heat recovery project is expected to lower the mill's fossil fuel consumption by more than 20%, total energy consumption by 11 per cent and CO₂ emissions by 14.5 per cent (10,000 tonnes per year), a reduction equivalent to removing 2,500 cars from the road or planting 1.3 million trees. This project is an important part of Kruger Products "Sustainability 2015" initiative, a five-year plan to reduce Kruger Product's environmental footprint by reducing its overall energy consumption and emissions by 15 per cent. "Kruger Products is taking a leadership role in incorporating green technology in our business practices," said Mario Gosselin, COO of Kruger Products. "Our goal is to be North America's foremost provider of quality tissue products that embrace a commitment to sustainability for future generations and with innovations such as Gatineau's new FLU-ACE® heat recovery system, we are well positioned to continue to lead the way in the future."

The FLU-ACE® heat recovery system at the Gatineau mill captures hot air from two of the mill's three paper machines and reuses it to heat process water as well as the facility itself during the winter. The project was financed in part by Québec's Agence de l'efficacité énergétique, which granted $1.9 M in financial assistance through its Heavy Oil Consumption Reduction Program.

"The FLU-ACE® heat recovery system was delivered on time and on budget, and is currently performing in line with expectations." said Thermal Energy President and CEO William Crossland.  "We are very pleased to be able to assist Kruger Products in meeting its sustainability objectives by delivering this customized solution".

About Kruger Products

Kruger Products is Canada's leading tissue manufacturer and serves the Canadian consumer market with such well-known brands as Cashmere, Purex, SpongeTowels, Scotties and White Swan, as well as away-from-home products for industrial and commercial use across Canada. Kruger Products is wholly owned by Kruger Inc. which is a major producer of papers, tissue, lumber and other wood products, corrugated cartons from recycled fibres, green and renewable energy, and wines and spirits. Kruger Inc. operates facilities in Quebec, Ontario, Alberta, British Columbia, Newfoundland and Labrador and the United States and has approximately 9,000 employees.

To find out more about Kruger Products, visit www.krugerproducts.ca

About Thermal Energy

Thermal Energy International Inc. is an innovative technology company providing custom energy and emission reduction, and bioenergy solutions. With offices in Ottawa, Canada and Bristol UK, TEI is a designer, design build developer, fabricator, owner, operator and supplier of proprietary and patented energy conservation, renewable energy and environmental technology solutions. Thermal Energy is a fully accredited professional engineering firm, and offers advanced process and applications engineering services. FLU-ACE®, DRY-REX®, THERMALONOx®, THERMAL AUD® and GEM® are trademarks of Thermal Energy International.

To find out more about Thermal Energy International Inc. (TSX-V: TMG), visit our website at www.thermalenergy.com.

NOTE: This press release contains forward-looking statements relating to, and amongst other things, based on management's expectations, estimates and projections with respect to, expected agreement on and execution of definitive agreements, timing of installation and implementation, the anticipated effectiveness of the Company's products and services and the revenues to be received by the Company from the project described. Statements with respect to anticipated effectiveness of the Company's products and services are based on studies conducted by the Company and third parties as well as the Company's experience with similar installations for other customers.  These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, some of which are outside of the Company's control, could cause events and results to differ materially from those stated. The Company disclaims any obligation to publicly update or revise any such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

William Crossland
President and CEO
Thermal Energy International Inc
613-723-6776