GreenHunter Energy Announces Execution of Long-Term Power Sales Agreement

GREENHUNTER MESQUITE LAKE, LLC, a wholly-owned subsidiary of GreenHunter Energy, Inc. (NYSE Amex: GRH), a diversified renewable energy company focused on wind development projects, biomass power generation and the production of biodiesel, announced today the execution of a new twenty (20) year power sales agreement for 100% of the net output of the GreenHunter Mesquite Lake biomass-fired power plant located in Southern California. In conjunction with the new power sales agreement, the Company announced the execution of an Interconnection Agreement between GreenHunter Mesquite Lake and the Imperial Irrigation District (“IID”) for 100% of the net output of the biomass-fired power plant.

The power sales agreement between the IID and GreenHunter Mesquite Lake provides for the purchase of up to twenty-seven (27) megawatts of net electrical output over a twenty (20) year period for a fixed price escalating annually. The power sales must begin on or before June 30, 2011. The Company had previously cancelled an existing power sales agreement with another California utility which had been assumed when the acquisition of the asset occurred in 2007.

The Interconnection Agreement between GreenHunter and the IID provides for the delivery of electricity generated by the GreenHunter Mesquite Lake biomass-fired power plant through the existing electricity transmission system on an “as available” basis.

Commenting on the execution of the power sales agreement and the interconnection agreement, Mr. Gary C. Evans, Chairman, President, and Chief Executive Officer of GreenHunter Energy stated, “Due to depressed fossil fuel prices, the alternative energy business today offers few appealing commercial opportunities. The biomass business is the one outstanding sector that offers immediate profitability depending upon the location of the facility. This new power sales agreement for the electrical power output generated from our Mesquite Lake Biomass Facility located in the Imperial Valley of Southern California will enable us to complete construction and have a viable operating asset within our existing portfolio.”

Forward-Looking Statements

Any statements in this press release about future expectations and prospects for GreenHunter Energy and its business and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Energy undertakes no obligation to update these forward-looking statements in the future.

GreenHunter Energy is focused on the renewable energy sectors of wind, hydro, geothermal, solar, biofuels, and biomass power plants. Our assets consist of leases of real property for future development of wind energy projects located in Montana, New Mexico, California, Texas, Wyoming and The Peoples Republic of China, the nation’s largest biodiesel refinery located in Houston, Texas, a biomass-fired power plant located in Brawley, California, and an option to lease acreage associated with a terminaling facility in Port Sutton, Florida. Headquartered in Grapevine, Texas, GreenHunter Energy was formed to be the first publicly traded renewable energy company based in the U.S. that provides to investors a portfolio of diversified assets in the alternative energy sector. Additional information about GreenHunter Energy may be found at www.greenhunterenergy.com.