<SUBMISSION>
<ACCESSION-NUMBER>0000927016-02-004268
<TYPE>S-8
<PUBLIC-DOCUMENT-COUNT>7
<FILING-DATE>20020822
<EFFECTIVENESS-DATE>20020822
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ENVIRONMENTAL POWER CORP
<CIK>0000805012
<ASSIGNED-SIC>4991
<IRS-NUMBER>042782065
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-8
<ACT>33
<FILE-NUMBER>333-98559
<FILM-NUMBER>02746062
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>500 MARKET ST
<STREET2>STE 1E
<CITY>PORTSMOUTH
<STATE>NH
<ZIP>03801
<PHONE>6034311780
</BUSINESS-ADDRESS>
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<STREET1>500 MARKET ST
<STREET2>STE 1E
<CITY>PORTSMOUTH
<STATE>NH
<ZIP>03801
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>ds8.txt
<DESCRIPTION>FORM S-8
<TEXT>
<PAGE>

                                                 Registration No. 333-__________
     As filed with the Securities and Exchange Commission on August 22, 2002
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              --------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933

                              --------------------

                         ENVIRONMENTAL POWER CORPORATION
             (Exact name of registrant as specified in its charter)

                Delaware                                   04-2782065
      (State or other jurisdiction                      (I.R.S. Employer
   of incorporation or organization)                   Identification No.)

                                 One Cate Street
                         Portsmouth, New Hampshire 03801
                          (Address, including zip code,
                  of registrant's principal executive offices)

                              --------------------

                            2001 Stock Incentive Plan
                            2002 Director Option Plan
         Stock Option Agreement between Environmental Power Corporation
                 and Robert I. Weisberg dated as of May 2, 2001
         Stock Option Agreement between Environmental Power Corporation
              and Robert I. Weisberg dated as of September 14, 2001
                            (Full title of the plan)

                              --------------------

                                Joseph E. Cresci
                             Chief Executive Officer
                         Environmental Power Corporation
                          One Cate Street, 4/th/ Floor
                         Portsmouth, New Hampshire 03801
                                 (603) 431-1780
                      (Name, address and telephone number,
              including area code, of agent for service of process)

                              --------------------

                                    Copy to:
                           Steven I. Himelstein, Esq.
                              Dorsey & Whitney LLP
                                 250 Park Avenue
                               New York, NY 10177
                                 (212) 415-9200

                              --------------------
                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
                                          Amount to be       Proposed maximum            Proposed maximum           Amount of
 Title of securities to be registered      registered     offering price per share    aggregate offering price  registration fee
---------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>               <C>                         <C>                       <C>
           Common Stock, $0.01
           par value per share           5,000,000/(1)/       $0.56/(2)/                 $2,800,000               $257.60
---------------------------------------------------------------------------------------------------------------------------------
           Common Stock, $0.01
           par value per share             450,000/(3)/       $0.66/(4)/                  $ 297,000               $ 27.32
---------------------------------------------------------------------------------------------------------------------------------
             Total                                                                                                $284.92
=================================================================================================================================
</TABLE>

(1)   This Registration Statement covers 3,000,000 shares of Common Stock
      issuable pursuant to the 2001 Stock Incentive Plan and 2,000,000 shares of
      Common Stock issuable pursuant to the 2002 Director Option Plan.

(2)   Estimated solely for the purpose of calculating the registration fee in
      accordance with Rule 457(c) and Rule 457(h) under the Securities Act of
      1933, as amended, on (i) 796,962 shares of Common Stock underlying
      outstanding options (of which 646,962 were granted under the 2001 Stock
      Incentive Plan and 150,000 were granted under the 2002 Director Option
      Plan) at an average exercise price of $0.86 per share, and (ii) 2,353,038
      shares to be granted under the 2001 Stock Incentive Plan and 1,850,000
      shares to be granted under the 2002 Director Option Plan at an average
      aggregate offering price of $0.50 per as computed based upon the average
      of the high and low sales prices of the Common Stock as reported on the
      Over-the-Counter Bulletin Board on August 20, 2002.

(3)   Consists of 100,000 and 350,000 shares of Common Stock issuable upon the
      exercise of options granted under Stock Option Agreements between
      Environmental Power Corporation and Robert I. Weisberg dated May 2, 2001
      and September 14, 2001, respectively.

(4)   Estimated solely for the purpose of calculating the registration fee in
      accordance with Rule 457(c) under the Securities Act of 1933, as amended,
      based upon 450,000 shares of Common Stock underlying options at an average
      exercise price of $0.66 per share.

================================================================================

<PAGE>

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Environmental Power Corporation (the
"Company"), are incorporated by reference in this Registration Statement, as of
their respective dates:

     (a)  the Company's Annual Report on Form 10-K and 10-K/A for the fiscal
          year ended December 31, 2001;

     (b)  the Company's Quarterly Report on Form 10-Q for the quarters ended
          March 31, 2002 and June 30, 2002; and

     (c)  the description of the Company's Common Stock, par value $.01 per
          share, as contained in a registration statement on Form 8-A filed on
          March 10, 1987, including any amendment or report filed for the
          purpose of updating such description.

     All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold shall be deemed to be incorporated by reference herein and to
be a part hereof from the respective dates of filing of such documents.

Item 4. Description of Securities.

     Not applicable.

Item 5. Interests of Named Experts and Counsel.

     Not applicable.

Item 6. Indemnification of Directors and Officers.

     Section 145 of the Delaware General Corporation Law permits the Company to
indemnify, under certain circumstances, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
for expenses related to such proceeding if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that the person's conduct was
unlawful. The Company's bylaws substantively provide that we will indemnify such
persons to the fullest extent allowed by the Delaware General Corporation Law.

Item 7. Exemption from Registration Claimed.

     Not applicable.

<PAGE>

Item 8. Exhibits.

     Exhibit                                                      Incorporation
     Number     Description                                       References
     ------     -----------                                       ----------
     4.1        Certificate of Incorporation, as amended                A

     4.2        Certificate of Designation with respect to the          B
                Series B Preferred Stock, par value $.01 per
                share, of the Company

     4.3        Amendment to Certificate of Incorporation               A
                effective November 9, 2001

     4.4        Bylaws                                                  C

     4.5        2001 Stock Incentive Plan                               *

     4.6        2002 Director Option Plan                               *

     4.7        Option Agreement dated as of May 2, 2001 between        *
                the Company and Robert I. Weisberg

     4.8        Option Agreement dated as of September 14, 2001         *
                between the Company and Robert I. Weisberg

     5.1        Opinion of Dorsey & Whitney LLP                         *

     23.1       Consent of Deloitte & Touche LLP                        *

     23.2       Consent of Dorsey & Whitney LLP (contained in           *
                Exhibit 5.1 to this Registration Statement).

     24.1       Power of Attorney (included on signature page).         *


------------------
A    Previously filed as part of the Company's Report on Form 10-K for the year
     ended December 31, 2001.
B    Previously filed as part of the Company's Report on Form 8-K dated as of
     August 7, 2001.
C    Previously filed as part of the Company's Report on Form 10-K for the year
     ended December 31, 1998.
* Filed herewith.

Item 9.   Undertakings.

     (a)  The undersigned registrant hereby undertakes:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration Statement:

                                      II-2

<PAGE>

               (i)   To include any prospectus required by Section 10(a)(3) of
          the Securities Act of 1933 (the "Securities Act");

               (ii)  To reflect in the prospectus any facts or events arising
          after the effective date of the Registration Statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the Registration Statement. Notwithstanding the foregoing, any
          increase or decrease in volume of securities offered (if the total
          dollar value of securities offered would not exceed that which was
          registered) and any deviation from the low or high end of the
          estimated maximum offering range may be reflected in the form of
          prospectus filed with the Commission pursuant to Rule 424(b) if, in
          the aggregate, the changes in volume and price represent no more than
          a 20% change in the maximum aggregate offering price set forth in the
          "Calculation of Registration Fee" table in the effective Registration
          Statement; and

               (iii) To include any material information with respect to the
          plan of distribution not previously disclosed in the Registration
          Statement or any material change to such information in the
          Registration Statement;

     provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
     apply if the information required to be included in a post-effective
     amendment by those paragraphs is contained in periodic reports filed with
     or furnished to the Commission by the registrant pursuant to Section 13 or
     Section 15(d) of the Exchange Act that are incorporated by reference in the
     Registration Statement.

          (2)  That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new Registration Statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

          (3)  To remove from registration by means of a post-effective
     amendment any of the securities being registered which remain unsold at the
     termination of the offering.

     (b)  The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

     (c)  Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or other controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

                                      II-3

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Portsmouth, State of New Hampshire, on August 22,
2002.

                                   ENVIRONMENTAL POWER CORPORATION


                                   By     /s/ Joseph E. Cresci
                                     ------------------------------------------
                                                    Joseph E. Cresci
                                                    Chief Executive Officer

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Joseph E. Cresci and R. Jeffrey
Macartney, and each of them, his true and lawful attorney-in-fact and agent,
with full powers of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each such
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each such attorney-in-fact and agent, or his
substitutes, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 22, 2002.

     /s/ Joseph E. Cresci                     Chief Executive Officer, Secretary
--------------------------------------------  and Director
            Joseph E. Cresci                  (principal executive officer)

     /s/ R. Jeffrey Macartney                 Chief Financial Officer
--------------------------------------------  (principal financial and
           R. Jeffrey Macartney               accounting officer)

     /s/ Donald A. Livingston                 Director
--------------------------------------------
            Donald A. Livingston

     /s/ Peter J. Blampied                    Director
--------------------------------------------
             Peter J. Blampied

     /s/ Robert I. Weisberg                   Director
--------------------------------------------
            Robert I. Weisberg

     /s/ Thomas M. Matthews                   Director
--------------------------------------------
             Thomas M. Matthews

     /s/ Herman Brubaker                      Director
--------------------------------------------
              Herman Brubaker

     /s/ Jessie J. Knight, Jr.                Director
--------------------------------------------
            Jessie J. Knight, Jr.

     /s/ August Schumacher, Jr.               Director
--------------------------------------------
           August Schumacher, Jr.

                                      II-4

<PAGE>

                                EXHIBIT INDEX TO
                                    FORM S-8

                         Environmental Power Corporation

          Exhibit
          Number       Description
          ------       -----------

          4.5          2001 Stock Incentive Plan

          4.6          2002 Director Option Plan

          4.7          Option Agreement dated as of May 2, 2001 between the
                       Company and Robert I. Weisberg

          4.8          Option Agreement dated as of September 14, 2001 between
                       the Company and Robert I. Weisberg

          5.1          Opinion of Dorsey & Whitney LLP

          23.1         Consent of Deloitte & Touche LLP

          23.2         Consent of Dorsey & Whitney LLP (contained in Exhibit 5.1
                       to this Registration Statement).

          24.1         Power of Attorney (included on signature page).

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>3
<FILENAME>dex45.txt
<DESCRIPTION>2001 STOCK INCENTIVE PLAN
<TEXT>
<PAGE>

                                                                     Exhibit 4.5
                         ENVIRONMENTAL POWER CORPORATION
                            2001 STOCK INCENTIVE PLAN

Section 1.  Purpose

         The purpose of the Plan is to promote the interests of the Company and
its shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, independent contractors and non-employee directors
capable of assuring the future success of the Company, to offer such persons
incentives to put forth maximum efforts for the success of the Company's
business and to afford such persons an opportunity to acquire a proprietary
interest in the Company.

Section 2.  Definitions

         As used in the Plan, the following terms shall have the meanings set
forth below:

                  (a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company and
(ii) any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.

                  (b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Performance Award, Other Stock Grant or Other Stock-Based
Award granted under the Plan.

                  (c) "Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award granted under the
Plan.

                  (d) "Board" shall mean the Board of Directors of the Company.

                  (e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.

                  (f) "Committee" shall mean a committee of Directors designated
by the Board to administer the Plan. The Committee shall be comprised of not
less than such number of Directors as shall be required to permit Awards granted
under the Plan to qualify under Rule 16b-3, and each member of the Committee
shall be a "Non-Employee Director" within the meaning of Rule 16b-3 and an
"outside director" within the meaning of Section 162(m) of the Code. The Company
expects to have the Plan administered in accordance with the requirements for
the award of "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.

                  (g) "Company" shall mean Environmental Power Corporation, a
Delaware corporation, and any successor corporation.

                  (h) "Director" shall mean a member of the Board.

<PAGE>

                  (i) "Eligible Person" shall mean any employee, officer,
consultant, independent contractor or Director providing services to the Company
or any Affiliate whom the Committee determines to be an Eligible Person.

                  (j) "Fair Market Value" shall mean, with respect to any
property (including, without limitation, any Shares or other securities), the
fair market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee. Notwithstanding the
foregoing, unless otherwise determined by the Committee, the Fair Market Value
of Shares as of a given date shall be determined as follows:

         (i)      If the Shares are then listed on a national securities
                  exchange or reported on the National Association of Securities
                  Dealers Automated Quotation system ("NASDAQ") or other system
                  reporting a closing price, the closing price of a Share on
                  such date;

         (ii)     If the Shares are then not so listed or reported but traded in
                  the over-the-counter market, the average closing bid and asked
                  prices per Share on such date; or

         (iii)    In all other cases, the fair market value per Share, as
                  estimated in good faith by the Committee.

                  (k) "Incentive Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision.

                  (l) "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.

                  (m) "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.

                  (n) "Other Stock Grant" shall mean any right granted under
Section 6(e) of the Plan.

                  (o) "Other Stock-Based Award" shall mean any right granted
under Section 6(f) of the Plan.

                  (p) "Participant" shall mean an Eligible Person designated to
be granted an Award under the Plan.

                  (q) "Performance Award" shall mean any right granted under
Section 6(d) of the Plan.

                  (r) "Person" shall mean any individual, corporation,
partnership, association or trust.

                  (s) "Plan" shall mean the Environmental Power Corporation 2001
Stock Incentive Plan, as amended from time to time, the provisions of which are
set forth herein.

                                       -2-

<PAGE>

                  (t) "Restricted Stock" shall mean any Shares granted  under
Section 6(c) of the Plan.

                  (u) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, or any successor rule or regulation.

                  (v) "Share" or "Shares" shall mean shares of common stock,
$.01 par value per share, of the Company or such other securities or property as
may become subject to Awards pursuant to an adjustment made under Section 4(c)
of the Plan.

                  (w) "Stock Appreciation Right" shall mean any right granted
under Section 6(b) of the Plan.

Section 3.  Administration

                  (a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock or other Awards; (vi)
determine whether, to what extent and under what circumstances Awards may be
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended; (vii) determine whether, to what extent and
under what circumstances cash, Shares, promissory notes, other securities, other
Awards, other property and other amounts payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the holder
thereof or the Committee; (viii) interpret and administer the Plan and any
instrument or agreement, including an Award Agreement, relating to the Plan;
(ix) establish, amend, suspend or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon any
Participant, any holder or beneficiary of any Award and any employee of the
Company or any Affiliate.

                  (b) Delegation. The Committee may delegate its powers and
duties under the Plan to one or more Directors or to a committee of Directors,
subject to such terms, conditions and limitations as the Committee may establish
in its sole discretion.

                  (c) Power and Authority of the Board of Directors. In the
event the Committee has not been designed, the Board shall exercise the powers
and duties of the Committee under the Plan. Furthermore, notwithstanding
anything to the contrary contained herein, the Board may, at any time and from
time to time, without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan.

                                       -3-

<PAGE>

Section 4.  Shares Available for Awards

                  (a) Shares Available. Subject to adjustment as provided in
Section 4(c) of the Plan, the aggregate number of Shares that may be issued
under all Awards under the Plan shall be 3,000,000. Shares to be issued under
the Plan may be either authorized but unissued Shares or Shares acquired in the
open market or otherwise. Any Shares that are used by a Participant as full or
partial payment to the Company of the purchase price relating to an Award, or in
connection with the satisfaction of tax obligations relating to an Award, shall
again be available for granting Awards (other than Incentive Stock Options)
under the Plan. In addition, if any Shares covered by an Award or to which an
Award relates are not purchased or are forfeited, or if an Award otherwise
terminates without delivery of any Shares, then the number of Shares counted
against the aggregate number of Shares available under the Plan with respect to
such Award, to the extent of any such forfeiture or termination, shall again be
available for granting Awards under the Plan. Notwithstanding the foregoing, the
number of Shares available for granting Incentive Stock Options under the Plan
shall not exceed 3,000,000, subject to adjustment as provided in the Plan and
subject to the provisions of Section 422 or 424 of the Code or any successor
provision.

                  (b) Accounting for Awards. For purposes of this Section 4, if
an Award entitles the holder thereof to receive or purchase Shares, the number
of Shares covered by such Award or to which such Award relates shall be counted
on the date of grant of such Award against the aggregate number of Shares
available for granting Awards under the Plan.

                  (c) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) that
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards and (iii)
the purchase or exercise price with respect to any Award; provided, however,
that the number of Shares covered by any Award or to which such Award relates
shall always be a whole number.

                  (d) Award Limitations Under the Plan. No Eligible Person may
be granted any Award or Awards under the Plan, the value of which Award or
Awards is based solely on an increase in the value of the Shares after the date
of grant of such Award or Awards, for more than 1,000,000 Shares (subject to
adjustment as provided for in Section 4(c) of the Plan), in the aggregate in any
calendar year. The foregoing annual limitation specifically includes the grant
of any Award or Awards representing "qualified performance-based compensation"
within the meaning of Section 162(m) of the Code.

                                       -4-

<PAGE>

Section 5.  Eligibility

         Any Eligible Person shall be eligible to be designated a Participant.
In determining which Eligible Persons shall receive an Award and the terms of
any Award, the Committee may take into account the nature of the services
rendered by the respective Eligible Persons, their present and potential
contributions to the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant. Notwithstanding the
foregoing, an Incentive Stock Option may only be granted to full or part-time
employees (which term as used herein includes, without limitation, officers and
Directors who are also employees), and an Incentive Stock Option shall not be
granted to an employee of an Affiliate unless such Affiliate is also a
"subsidiary corporation" of the Company within the meaning of Section 424(f) of
the Code or any successor provision.

Section 6.  Awards

                  (a)      Options. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

                           (i)      Exercise Price. The purchase price per Share
purchasable under an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than 100% of the Fair Market
Value of a Share on the date of grant of such Option.

                           (ii)     Option Term.  The term of each Option shall
be fixed by the Committee.

                           (iii)    Time and Method of Exercise.  The Committee
shall determine the time or times at which an Option may be exercised in whole
or in part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, promissory notes, other securities, other
Awards or other property, or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant exercise price) in which, payment of
the exercise price with respect thereto may be made or deemed to have been made.

                           (iv)     Incentive Stock Options.  Notwithstanding
anything in the Plan to the contrary, the following additional provisions shall
apply to the grant of stock options which are intended to qualify as Incentive
Stock Options:

                                    (A) The aggregate Fair Market Value
                           (determined as of the time the option is granted) of
                           the Shares with respect to which Incentive Stock
                           Options are exercisable for the first time by any
                           participant during any calendar year (under this Plan
                           and all other plans of the Company and its
                           Affiliates) shall not exceed $100,000.

                                    (B) All Incentive Stock Options must be
                           granted within ten years from the earlier of the date
                           on which this Plan was adopted by Board of Directors
                           or the date this Plan was approved by the
                           shareholders of the Company.


                                       -5-

<PAGE>

                                    (C) Unless sooner exercised, all Incentive
                           Stock Options shall expire and no longer be
                           exercisable no later than 10 years after the date of
                           grant; provided, however, that in the case of a grant
                           of an Incentive Stock Option to a participant who, at
                           the time such Option is granted, owns (within the
                           meaning of Section 422 of the Code) stock possessing
                           more than 10% of the total combined voting power of
                           all classes of stock of the Company or of its
                           Affiliate, such Incentive Stock Option shall expire
                           and no longer be exercisable no later than 5 years
                           from the date of grant.

                                    (D) The purchase price per Share for an
                           Incentive Stock Option shall be not less than 100% of
                           the Fair Market Value of a Share on the date of grant
                           of the Incentive Stock Option; provided, however,
                           that, in the case of the grant of an Incentive Stock
                           Option to a participant who, at the time such Option
                           is granted, owns (within the meaning of Section 422
                           of the Code) stock possessing more than 10% of the
                           total combined voting power of all classes of stock
                           of the Company or of its Affiliate, the purchase
                           price per Share purchasable under an Incentive Stock
                           Option shall be not less than 110% of the Fair Market
                           Value of a Share on the date of grant of the
                           Inventive Stock Option.

                                    (E) Any Incentive Stock Option authorized
                           under the Plan shall contain such other provisions as
                           the Committee shall deem advisable, but shall in all
                           events be consistent with and contain all provisions
                           required in order to qualify the Option as an
                           Incentive Stock Option.

                       (b) Stock Appreciation Rights. The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants subject to the
terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to receive
upon exercise thereof the excess of (i) the Fair Market Value of one Share on
the date of exercise (or, if the Committee shall so determine, at any time
during a specified period before or after the date of exercise) over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee, which
price shall not be less than 100% of the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right. Subject to the terms of the Plan
and any applicable Award Agreement, the grant price, term, methods of exercise,
dates of exercise, methods of settlement and any other terms and conditions of
any Stock Appreciation Right shall be as determined by the Committee. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.

                       (c) Restricted Stock. The Committee is hereby authorized
to grant Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:

                           (i) Restrictions. Shares of Restricted Stock shall be
subject to such restrictions as the Committee may impose (including, without
limitation, a waiver by the Participant of the right to vote or to receive any
dividend or other right or property with respect thereto), which restrictions
may lapse separately or in combination at such time or times, in such
installments or otherwise as the Committee may deem appropriate.

                                       -6-

<PAGE>

                           (ii)   Stock Certificates. Any Restricted Stock
granted under the Plan shall be registered in the name of the Participant and
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock.

                           (iii)  Forfeiture. Except as otherwise determined by
the Committee, upon termination of employment (as determined under criteria
established by the Committee) during the applicable restriction period, all
Shares of Restricted Stock subject to restriction at such time shall be
forfeited and reacquired by the Company; provided, however, that the Committee
may, when it finds that a waiver would be in the best interest of the Company,
waive in whole or in part any or all remaining restrictions with respect to
Shares of Restricted Stock.

                       (d) Performance Awards. The Committee is hereby
authorized to grant Performance Awards to Participants subject to the terms of
the Plan and any applicable Award Agreement. A Performance Award granted under
the Plan (i) may be denominated or payable in cash, Shares (including, without
limitation, Restricted Stock), other securities, other Awards or other property
and (ii) shall confer on the holder thereof the right to receive payments, in
whole or in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. Subject to the terms of
the Plan and any applicable Award Agreement, the performance goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.

                       (e) Other Stock Grants. The Committee is hereby
authorized, subject to the terms of the Plan and any applicable Award Agreement,
to grant to Participants Shares without restrictions thereon as are deemed by
the Committee to be consistent with the purpose of the Plan.

                       (f) Other Stock-Based Awards. The Committee is hereby
authorized to grant to Participants subject to the terms of the Plan and any
applicable Award Agreement, such other Awards that are denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or related
to, Shares (including, without limitation, securities convertible into Shares),
as are deemed by the Committee to be consistent with the purpose of the Plan.
Shares or other securities delivered pursuant to a purchase right granted under
this Section 6(f) shall be purchased for such consideration, which may be paid
by such method or methods and in such form or forms (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards or
other property or any combination thereof), as the Committee shall determine,
the value of which consideration, as established by the Committee, shall not be
less than 100% of the Fair Market Value of such Shares or other securities as of
the date such purchase right is granted.

                       (g) General

                           (i)    No Cash Consideration for Awards. Awards shall
be granted for no cash consideration or for such minimal cash consideration as
may be required by applicable law.

                           (ii)   Awards May Be Granted Separately or Together.
Awards may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in

                                       -7-

<PAGE>

substitution for any other Award or any award granted under any plan of the
Company or any Affiliate other than the Plan. Awards granted in addition to or
in tandem with other Awards or in addition to or in tandem with awards granted
under any such other plan of the Company or any Affiliate may be granted either
at the same time as or at a different time from the grant of such other Awards
or awards.

                           (iii)  Forms of Payment under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall determine
(including, without limitation, cash, Shares, promissory notes, other
securities, other Awards or other property or any combination thereof), and may
be made in a single payment or transfer, in installments or on a deferred basis,
in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation, provisions
for the payment or crediting of reasonable interest on installment or deferred
payments or the grant or crediting of dividend equivalents with respect to
installment or deferred payments.

                           (iv)   Limits on Transfer of Awards. No Award (other
than Other Stock Grants) and no right under any such Award shall be transferable
by a Participant otherwise than by will or by the laws of descent and
distribution and the Company shall not be required to recognize any attempted
assignment of such rights by any participant. Each Award or right under any
Award shall be exercisable during the Participant's lifetime only by the
Participant or, if permissible under applicable law, by the Participant's
guardian or legal representative. No Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.

                           (v)    Term of Awards. The term of each Award shall
be for such period as may be determined by the Committee; provided, however,
that in the case of an Incentive Stock Option such option shall not be
exercisable after the expiration of 10 years from the date such option is
granted.

                           (vi)   Restrictions; Securities Exchange Listing. All
Shares or other securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made or legends to be affixed to reflect such restrictions. If any securities of
the Company are traded on a securities exchange or system, the Company shall not
be required to deliver any Shares or other securities covered by an Award unless
and until such Shares or other securities have been admitted for trading on such
securities exchange or system.

Section 7.  Amendment and Termination; Adjustments

                    (a)    Amendments to the Plan. The Board may amend, alter,
suspend, discontinue or terminate the Plan at any time; provided, however, that,
notwithstanding any other provision of the Plan or any Award Agreement, without
the approval of the shareholders of the Company, no such amendment, alteration,
suspension, discontinuation or termination shall be made that, absent such
approval:

                                       -8-

<PAGE>

                           (i)    would violate the rules or regulations of the
NASDAQ National Market System or any securities exchange that are applicable to
the Company; or

                           (ii)   would cause the Company to be unable, under
the Code, to grant Incentive Stock Options under the Plan.

                      (b)  Amendments to Awards. The Committee may waive any
conditions of or rights of the Company under any outstanding Award,
prospectively or retroactively. Except as otherwise provided herein or in the
Award Agreement, the Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively, if such action
would adversely affect the rights of the holder of such Award, without the
consent of the Participant or holder or beneficiary thereof.

                      (c)  Correction of Defects, Omissions and Inconsistencies.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

Section 8. Income Tax Withholding

         In order to comply with all applicable federal or state income tax laws
or regulations, the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of a Participant,
are withheld or collected from such Participant. In order to assist a
Participant in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise or receipt of (or the lapse of restrictions
relating to) an Award, the Committee, in its discretion and subject to such
additional terms and conditions as it may adopt, may permit the Participant to
satisfy such tax obligation by (i) electing to have the Company withhold a
portion of the Shares otherwise to be delivered upon exercise or receipt of (or
the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes or (ii) delivering to the Company Shares other than
Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award with a Fair Market Value equal to the amount of such
taxes. The election, if any, must be made on or before the date that the amount
of tax to be withheld is determined.

Section 9. General Provisions

                      (a)  No Rights to Awards. No Eligible Person, Participant
or other Person shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Eligible Persons,
Participants or holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to any Participant or
with respect to different Participants.

                      (b)  Award Agreements. No Participant will have rights
under an Award granted to such Participant unless and until an Award Agreement
shall have been duly executed on behalf of the Company and, if requested by the
Company, signed by the Participant.

                      (c)  Plan Provisions Control. In the event that any
provision of an Award Agreement conflicts with or is inconsistent in any respect
with the terms of the Plan as set forth herein or subsequently amended, the
terms of the Plan shall control.

                                       -9-

<PAGE>

                  (d) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

                  (e) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or without cause.
In addition, the Company or an Affiliate may at any time dismiss a Participant
from employment free from any liability or any claim under the Plan or any
Award, unless otherwise expressly provided in the Plan or in any Award
Agreement.

                  (f) Governing Law. The validity, construction and effect of
the Plan or any Award, and any rules and regulations relating to the Plan or any
Award, shall be determined in accordance with the laws of the State of Delaware.

                  (g) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose
or intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such Award shall
remain in full force and effect.

                  (h) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

                  (i) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash shall be paid in lieu of any fractional Shares or whether
such fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

                  (j) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

Section 10. Effective Date of the Plan

        The Plan shall be effective as of August 20, 2001, subject to approval
by the shareholders of the Company within one year thereafter.

Section 11. Term of the Plan

                                      -10-

<PAGE>

         No Award shall be granted under the Plan after ten years from the date
set forth in Section 10 or any earlier date of discontinuation or termination
established pursuant to Section 7(a) of the Plan. However, unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
theretofore granted may extend beyond such date.

                                      -11-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.6
<SEQUENCE>4
<FILENAME>dex46.txt
<DESCRIPTION>2002 DIRECTOR OPTION PLAN
<TEXT>
<PAGE>

                                                                     Exhibit 4.6

                         ENVIRONMENTAL POWER CORPORATION

                            2002 DIRECTOR OPTION PLAN

1.   PURPOSE

     The purpose of this 2002 Director Option Plan (the "Plan") of Environmental
Power Corporation (the "Company") is to encourage ownership in the Company by
outside directors of the Company whose continued services are considered
essential to the Company's future progress and to provide them with a further
incentive to remain as directors of the Company.

2.   ADMINISTRATION

     The Board of Directors shall supervise and administer the Plan. Grants of
stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic and non-discretionary in accordance with Section 5.
However, all questions of interpretation of the Plan or of the any options
issued under it shall be determined by the Board of Directors and such
determination shall be final and binding upon all persons having an interest in
the Plan.

3.   DIRECTORS ELIGIBLE FOR PARTICIPATION

     Each director of the Company (serving as such on or after the close of
business on the Effective Date of this Plan) who is not an employee of the
Company or any subsidiary of the Company shall be eligible to participate in the
Plan.

4.   STOCK SUBJECT TO THE PLAN

     (a)  The maximum numbers of shares which may be issued under the Plan shall
be two million (2,000,000) shares of the Company's Common Stock, $.01 par value
per share ("Common Stock").

     (b)  If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares allocable to the
unexercised portion of such option shall again become available for grant
pursuant to the Plan.

     (c)  All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended to date and as may be amended from time to time (the
"Code").

5.   TERMS, CONDITIONS AND FORM OF OPTIONS

     Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:

     (a)  Option Grants and Dates. Upon effectiveness of the Plan, options to
purchase 50,000 shares shall be granted automatically to any eligible director
(as defined in Section 3) on the close of business on the date of his or her
initial election or appointment to the Board of Directors if such initial
election or appointment occurs on or after the date of the 2002 Annual Meeting.
Furthermore, options to purchase 50,000 shares shall be granted automatically to
each eligible director (regardless of whether such eligible director was first
elected or appointed

<PAGE>

before, on or after the date of the 2002 Annual Meeting), upon each anniversary
date of his or her initial election or appointment, which anniversary date
occurs on or after the date of the 2002 Annual Meeting; provided that such
eligible director's service is scheduled to continue beyond such anniversary
date.

     (b)  Reduction of Shares Subject to Option; Exercisability. Notwithstanding
Section 5(a) above, any options which have been granted to an eligible director
under the Company's 1993 Director Option Plan within twelve months prior to any
grant under this Plan shall be deducted from the option grant due such director
under the Plan. All options granted under the Plan will be immediately
exerciseable.

     (c)  Option Exercise Price. The option exercise price per share for each
option granted under the Plan shall equal (i) if the Shares are then listed on a
national securities exchange or reported on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") OTC Bulletin Board, or
other system reporting a close price, the closing price of a Share on the date
of grant (or, if no such price is reported on such date, such price as reported
on the nearest preceding day) (ii) if the shares are then not so listed or
reported but traded in the over-the-counter market, the average closing bid and
asked prices per share on such date; or (iii) the fair market value of the stock
on the date of grant, as determined by the Board of Directors, if the shares are
not publicly traded.

     (d)  Option Non-Transferable. Each option granted under the Plan by its
terms shall not be transferable by the optionee otherwise than by will, or by
the laws of descent and distribution, or pursuant to a qualified domestic
relations order (as defined in section 414(p) of the Code), and shall be
exercised during the lifetime of the optionee only by him. No option or interest
therein may be transferred, assigned, pledged or hypothecated by the optionee
during his lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process.

     (e)  Exercise Period. Except as otherwise provided in the Plan, each option
may be exercised fully on the date of grant of such option, provided, that
subject to the provisions of Section 5(f), no option may be exercised more than
90 days after the optionee ceases to serve as a director of the Company. No
option shall be exercisable after the expiration of ten (10) years from the date
of grant or prior to approval of the Plan by the stockholders of the Company.

     (f)  Exercise Period Upon Disability or Death. Notwithstanding the
provisions of Sections 5(e), any option granted under the Plan:

          (i)   may be exercised in full by an optionee who becomes disabled
     (within the meaning of Section 22(e)(3) of the Code or any successor
     provision thereto) while serving as a Director of the Company; or

          (ii)  may be exercised

                (x)  in full upon the death of an optionee while serving as a
     director of the Company, or

                (y)  to the extent then exercisable upon the death of
     an optionee within 90 days of ceasing to serve as a director of the
     Company,

                                        2

<PAGE>

     by the person to whom it is transferred by will, by the laws of descent and
     distribution, or by written notice filed pursuant to Section 5(i);

     in each such case within the period of one year after the date the optionee
     ceases to be such a director; provided, that no option shall be exercisable
     after the expiration of ten (10) years from the date of grant.

     (g)  Exercise Procedure. Options may be exercised only by written notice to
the Company at its principal office accompanied by payment of the full
consideration for the shares as to which they are exercised.

     (h)  Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price in cash, by check (bank check, certified
check or personal check), by money order, or with the approval of the Company in
its sole and absolute discretion (and upon such terms and conditions as the
Company may require) (i) by delivering to the Company for cancellation Common
Stock of the Company with a fair market value as of the date of exercise equal
to the option price or the portion thereof being paid by tendering such shares,
(ii) by delivering to the Company the full option price in a combination of cash
and Holder's full recourse liability promissory note with a principal amount not
to exceed eighty percent (80%) of the option price and a term not to exceed five
(5) years, which promissory note shall provide for interest on the unpaid
balance thereof which at all times is not less than the minimum rate required to
avoid the imputation of income, original issue discount or a below-market rate
loan pursuant to Sections 483, 1274 or 7872 of the Code or any successor
provisions thereto or (iii) by delivering to the Company a combination of cash,
the holder's promissory note and Common Stock of the Company with an aggregate
fair market value and a principal amount equal to the option price. The fair
market value of any shares or other non-cash consideration which may be
delivered upon exercise of an option shall be determined by the Board of
Directors.

     (i)  Exercise by Representative Following Death of Director. A director, by
written notice to the Company, may designate one or more persons (and from time
to time change such designation) including his legal representative, who, by
reason of his death, shall acquire the right to exercise all or a portion of the
option. If the person or persons so designated wish to exercise any portion of
the option they must do so within the term of the option as provided herein. Any
exercise by a representative shall be subject to the provisions of the Plan.

6.   ASSIGNMENTS

     The rights and benefits under the Plan may not be assigned except for the
designation of a beneficiary as provided in Section 5.

7.   TAKE TIME FOR GRANTING OPTIONS

     All options for shares subject to the Plan shall be granted, if at all, not
later than December 31, 2007.

8.   LIMITATION OF RIGHTS

     (a)  No Right to Continue as a Director. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any

                                        3

<PAGE>

agreement or understanding, express or implied, that the Company will retain a
director for any period of time.

     (b)  No Stockholders' Rights for Options. An optionee shall have no rights
as a stockholder with respect to the shares covered by his options under the
date of the issuance to him of a stock certificate therefore, and no adjustment
will be made for dividends or other rights for which the record date is prior to
the date such certificate is issued.

9.   CHANGES IN CAPITAL STOCK

     (a)  If (x) the outstanding shares are increased, decreased or exchanged
for a different number or kind of shares or other securities of the Company, or
(y) additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such shares or
other securities, through or as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company reorganization,
recapitalization, reclassification, stock dividend, stock split, reserve stock
split or other similar transaction with respect to such shares or other
securities, an appropriate and proportionate adjustment shall be made in (i) the
maximum number and kind of shares reserved for issuance under the Plan, and (ii)
the number and kind of shares or other securities subject to then outstanding
options under the Plan and (iii) the price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable. No fractional shares will be
issued under the Plan on account of any such adjustments. Notwithstanding the
foregoing, no adjustment shall be made pursuant to this Section 9 if such
adjustment would cause the Plan to fail to comply with Rule 16b-3 or any
successor rule promulgated pursuant to Section 16 of the Securities Exchange Act
of 1934.

     (b)  In the event that the Company is merged or consolidated into or with
another corporation (in which consolidation or merger the stockholders of the
Company receive distributions of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company are acquired by any other person or entity, or in the event of a
reorganization or liquidation of the Company, the Board of Directors of the
Company, or the Board of Directors of any corporation assuming the obligations
of the Company, shall, as to outstanding options, take one or more of the
following actions: (i) provide that such options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation (or an
unexercised options will terminate immediately prior to the consummation of such
transaction unless exercised by the optionee within a specified period following
the date of such notice, or (iii) if, under the terms of a merger transactions,
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger (the "Merger
Price"), make or provide for a cash payment to the optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such outstanding options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such outstanding options in exchange for the termination of such options.

10.  AMENDMENT OF THE PLAN

     The Board of Directors may suspend or discontinue the Plan or review or
amend it in any respect whatsoever; provided, however, that without approval of
the stockholders of the Company no revision or amendment shall change the number
of shares subject to the Plan or the number of shares issuable to any director
of the Company under the Plan (except as provided in

                                        4

<PAGE>

Section 9), change the designation of the class of directors eligible to receive
options, or materially increase the benefits accruing to participants under the
Plan. The Plan may not be amended more than once in any six-month period.

11.  WITHHOLDING

     The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee, any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan.

12.  EFFECTIVE DATE AND DURATION OF THE PLAN

     (a)  Effective Date. The Plan shall become effective when approved by the
Board of Directors and the Company's shareholders. Amendments to the Plan not
requiring shareholder approval shall become effective when adopted by the Board
of Directors; amendments requiring shareholder approval shall become effective
when adopted by the Board of Directors, but no option granted after the date of
such amendment shall become exercisable (to the extent that such amendment to
the Plan was required to enable the Company to grant such option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any options granted on
or after the date of such amendment shall terminate to the extent that such
amendment to the Plan was required to enable the Company to grant such option to
a particular optionee.

     (b)  Termination. Unless sooner terminated in accordance with Section 9,
the Plan shall terminate upon the earlier of (i) the close of business on
December 31, 2007, or (ii) the date on which all shares available for issuance
under the plan shall have been issued pursuant to the exercise or cancellation
or options granted the Plan. If the date of termination is determined under (i)
above, the options outstanding on such date shall thereafter continue to have
full force and effect in accordance with the provisions of the instruments
evidencing such options.

13.  NOTICE

     Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.

14.  GOVERNMENTAL REGULATION

     The Company's obligation to sell and deliver shares of the Common Stock
under the Plan is subject to the approval of or requirements of any governmental
authority applicable in connection with the authorization, issuance or sale of
such shares.

15.  COMPLIANCE WITH RULE 16B-3

     Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b or its successor promulgated pursuant to Section 16 of
the Securities Exchange Act of 1934. To the extent any provision of the plan or
action by the Board of Directors in administering the

                                        5

<PAGE>

Plan fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board of Directors.

16.  GOVERNING LAW

     The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.

                                        6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.7
<SEQUENCE>5
<FILENAME>dex47.txt
<DESCRIPTION>OPTION AGREEMENT DTD 05/02/01 - WEISBERG
<TEXT>
<PAGE>

                                                                     Exhibit 4.7
                         ENVIRONMENTAL POWER CORPORATION

                             STOCK OPTION AGREEMENT

This Stock Option Agreement is entered into between Environmental Power
Corporation (the "Company") and Robert I. Weisberg ("Optionee").

I.   NOTICE OF STOCK OPTION GRANT

The undersigned Optionee has been granted an Option to purchase Common Stock of
the Company, subject to the terms and conditions of this Option Agreement, as
follows:

     Grant Number                        _______________________________________

     Date of Grant                                         5/2/01
                                         ---------------------------------------

     Vesting Commencement Date                             5/2/01
                                         ---------------------------------------

     Exercise Price per Share                               $0.43
                                         ---------------------------------------

     Total Number of Shares Granted                       100,000
                                         ---------------------------------------

     Total Exercise Price                                 $43,000
                                         ---------------------------------------

     Type of Option:                            ____   Incentive Stock Option

                                                 X  Nonqualified Stock Option
                                                ---

     Term/Expiration Date:                                 5/2/06
                                         ---------------------------------------

Vesting:

This Option shall be exercisable, in whole or in part, immediately upon the
grant of the Option on May 2, 2001.

<PAGE>

Termination Period:

Upon Optionee's death or disability, this Option may be exercised for one (1)
year after Optionee's death or disability, respectively.

II.  AGREEMENT

     1.  Grant of Option. The Company hereby grants to the Optionee an Option to
purchase the number of Shares set forth in the Notice of Grant, at the Exercise
Price per Share set forth in the Notice of Grant. This Option shall be treated
as a Nonqualified Stock Option ("NSO").

     2. Exercise of Option.

          (a) Right to Exercise. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of this Option Agreement.

          (b) Method of Exercise and Payment. This Option shall be exercisable
by delivery of an Exercise Notice in the form attached as Exhibit A which shall
state the election to exercise the Option, the number of Shares with respect to
which the Option is being exercised, and such other representations and
agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all exercised
Shares. Optionee may pay the Exercise Price by cash or check (bank check,
certified check, or personal check) or, with the approval of the Company, by
delivering to the Company the full Exercise Price in a combination of cash, not
less than the par value of one share of Common Stock multiplied by the number of
shares of Common Stock with respect to which the Option is being exercised, and
a full recourse promissory note with a term not to exceed five (5) years, which
promissory note shall provide for interest on the unpaid balance thereof which
at all times is not less than the minimum rate required to avoid the imputation
of income, original issue discount or a below-market rate loan pursuant to
Sections 483, 1274 or 7872 of the Internal Revenue Code of 1986, as amended.
This Option shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by the aggregate Exercise Price.

          In addition, as an alternative to payment of the Exercise Price in
accordance with the preceding paragraph, the Optionee may elect to effect a
cashless exercise by so indicating on the exercise notice and including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, the Optionee shall surrender this Option for that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock for which this Option is being exercised by the difference
between the "Closing Price", as herein defined minus the exercise price in
effect at such time, divided by the Closing Price. The "Closing Price" for each
day shall be

                                       2

<PAGE>

the last reported sale price regular way or, in case no sale takes place on such
day, the average of the closing bid and asked prices regular way on such day, in
either case as reported on the primary exchange, automated quotation system or
reporting system on which the Common Stock is listed or trades or is reported,
or if no prices shall be so reported, the average of the bid and asked prices
for such day as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for such purpose, or if no such bid and asked
prices can be obtained from any such firm, the fair market value of one share of
the Common Stock on such day as determined in good faith by the Board of
Directors of the Company.

              No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with applicable federal, state
and local securities laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the
Option is exercised with respect to such Shares.

      3.  Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

     4.   Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option.

     5.   Optionee's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B.

     6.   Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

                                       3

<PAGE>

          7.  Tax Consequences. Set forth below is a brief summary as of the
date of this Agreement of some of the federal tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

               (a) Exercise of NSO. There may be a regular federal income tax
liability, at ordinary income tax rates, upon the exercise of the Option. If
Optionee is an employee or a former employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

               (b) Disposition of Shares. The disposition of Shares is generally
a taxable event. The tax treatment will depend on the length of time for which
the Shares have been held by Optionee.

          8.  Entire Agreement; Governing Law. This Option Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes in its entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the laws of
the State of New Hampshire.

                                       4

<PAGE>

Optionee has reviewed this Option Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option and
fully understands all provisions of the Option. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Company
upon any questions arising under this Option. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.

OPTIONEE                                    ENVIRONMENTAL POWER CORPORATION

_______________________________________     By:_________________________________

Signature                                   Name:_______________________________

_______________________________________     ____________________________________

Print Name                                  Title:

_______________________________________

_______________________________________

Residence Address

                                       5

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE

ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, NH 03801
Attention: _________________


          1. Exercise of Option. Effective as of today, ___________, 20__, the
undersigned Optionee hereby elects to exercise Optionee's option to purchase
________ Shares of the Common Stock of ENVIRONMENTAL POWER CORPORATION (the
"Company") under and pursuant to the Stock Option Agreement dated June ___, 2001
(the "Option Agreement").

          2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.

          3. Representations of Optionee. Optionee acknowledges that Optionee
has received, read and understood the Option Agreement and agrees to abide by
and be bound by its terms and conditions.

          4. Rights as Shareholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance.

          5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

          6. Restrictive Legends and Stop-Transfer Orders.

               (a) Legends. Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:

          THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933 (THE "ACT") OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT
          BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED,

                                      A-1

<PAGE>

          PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN
          OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AND ITS COUNSEL THAT
          SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT AND ANY STATE
          SECURITIES LAWS.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
          RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
          ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN
          THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
          MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
          RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
          THESE SHARES.

               (b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

               (c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

          7. Successors and Assigns. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.

          8. Governing Law; Severability. This Exercise Notice is governed by
the laws of the State of New Hampshire.

                                      A-2

<PAGE>

          9. Entire Agreement. The Option Agreement is incorporated herein by
reference. This Exercise Notice, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.

Submitted by:                              Accepted by:

OPTIONEE                                   ENVIRONMENTAL POWER CORPORATION

___________________________________        By: ______________________________

Signature                                  Name: ____________________________


Robert I. Weisberg                         Title: ___________________________
-----------------------------------

Print Name

Address:                                   Address:
-------                                    -------

___________________________________        500 Market Street, Suite 1-E
                                           ----------------------------------

___________________________________        Portsmouth, New Hampshire  03801
                                           ----------------------------------

                                           __________________________________

                                           Date Received

                                      A-3

<PAGE>

                                                                      EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:     Robert I. Weisberg

COMPANY:      Environmental Power Corporation

SECURITY:

AMOUNT:

DATE:

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

(a)  Optionee is aware of the Company's business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. Optionee is acquiring
these Securities for investment for Optionee's own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").

(b)  Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.

(c)  Optionee is familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly

                                      B-1

<PAGE>

or indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 144 requires the resale to occur not
less than one year after the later of the date the Securities were sold by the
Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the following conditions:
(1) the resale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended); and, in the case
of an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three-month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.

(d)  Optionee further understands that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

                                              Signature of Optionee:

                                              __________________________________

                                              Date: __________________________

                                      B-2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.8
<SEQUENCE>6
<FILENAME>dex48.txt
<DESCRIPTION>OPTION AGREEMENT DTD 09/14/01 - WEISBERG
<TEXT>
<PAGE>

                                                                     Exhibit 4.8

                         ENVIRONMENTAL POWER CORPORATION

                             STOCK OPTION AGREEMENT

This Stock Option Agreement is entered into between Environmental Power
Corporation (the "Company") and Robert I. Weisberg ("Optionee").

I.   NOTICE OF STOCK OPTION GRANT

Pursuant to a July 20, 2001 resolution of the Board of Directors of the Company,
the undersigned Optionee has been granted an Option to purchase Common Stock of
the Company, subject to the terms and conditions of this Option Agreement, as
follows:

<TABLE>
<S>                                             <C>
         Grant Number
                                                _____________________________________________

         Date of Grant                                         9/14/01
                                                ---------------------------------------------

         Vesting Commencement Date                             9/14/01
                                                ---------------------------------------------

         Exercise Price per Share                               $0.72
                                                ---------------------------------------------

         Total Number of Shares Underlying
         Grant                                                 350,000
                                                ---------------------------------------------

         Total Exercise Price                                  $252,000
                                                ---------------------------------------------

         Type of Option:                             ________    Incentive Stock Option

                                                        X     Nonqualified Stock Option
                                                     -------

         Term/Expiration Date:                                      9/14/06
                                                ---------------------------------------------
</TABLE>

Vesting:

This Option shall be exercisable, in whole or in part, immediately upon the
grant of the Option as of September 14, 2001.

<PAGE>

Termination Period:

Upon Optionee's death or disability, this Option may be exercised for one (1)
year after Optionee's death or disability, respectively.

II.  AGREEMENT

     1.    Grant of Option. The Company hereby grants to the Optionee an Option
to purchase the number of Shares set forth in the Notice of Grant, at the
Exercise Price per Share set forth in the Notice of Grant. This Option shall be
treated as a Nonqualified Stock Option ("NSO").

     2.    Exercise of Option.

                 (a)   Right to Exercise. This Option shall be exercisable
during its term in accordance with the Vesting Schedule set out in the Notice of
Grant and with the applicable provisions of this Option Agreement.

                 (b)   Method of Exercise and Payment. This Option shall be
exercisable by delivery of an Exercise Notice in the form attached as Exhibit A
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all exercised
Shares. Optionee may pay the Exercise Price by cash or check (bank check,
certified check, or personal check) or, with the approval of the Company, by
delivering to the Company the full Exercise Price in a combination of cash, not
less than the par value of one share of Common Stock multiplied by the number of
shares of Common Stock with respect to which the Option is being exercised, and
a full recourse promissory note with a term not to exceed five (5) years, which
promissory note shall provide for interest on the unpaid balance thereof which
at all times is not less than the minimum rate required to avoid the imputation
of income, original issue discount or a below-market rate loan pursuant to
Sections 483, 1274 or 7872 of the Internal Revenue Code of 1986, as amended.
This Option shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by the aggregate Exercise Price.

                 In addition, as an alternative to payment of the Exercise Price
in accordance with the preceding paragraph, the Optionee may elect to effect a
cashless exercise by so indicating on the exercise notice and including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, the Optionee shall surrender this Option for that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock for which this Option is being exercised by the difference
between the "Closing Price", as herein defined minus the exercise price in
effect at such time, divided by the Closing Price. The "Closing Price" for each
day shall be

                                       2

<PAGE>

the last reported sale price regular way or, in case no sale takes place on such
day, the average of the closing bid and asked prices regular way on such day, in
either case as reported on the primary exchange, automated quotation system or
reporting system on which the Common Stock is listed or trades or is reported,
or if no prices shall be so reported, the average of the bid and asked prices
for such day as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for such purpose, or if no such bid and asked
prices can be obtained from any such firm, the fair market value of one share of
the Common Stock on such day as determined in good faith by the Board of
Directors of the Company.

                 No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with applicable federal, state
and local securities laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the
Option is exercised with respect to such Shares.

     3.    Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

     4.    Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option.

     5.    Optionee's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B.

     6.    Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

                                       3

<PAGE>

     7.    Tax Consequences. Set forth below is a brief summary as of the date
of this Agreement of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

              (a)   Exercise of NSO. There may be a regular federal income tax
liability, at ordinary income tax rates, upon the exercise of the Option. If
Optionee is an employee or a former employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

              (b)   Disposition of Shares. The disposition of Shares is
generally a taxable event. The tax treatment will depend on the length of time
for which the Shares have been held by Optionee.

     8.    Entire Agreement; Governing Law. This Option Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes in its entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the laws of
the State of New Hampshire.

                                       4

<PAGE>

Optionee has reviewed this Option Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option and
fully understands all provisions of the Option. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Company
upon any questions arising under this Option. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.

OPTIONEE                                           ENVIRONMENTAL POWER
                                                   CORPORATION

                                                   By:
------------------------------                        --------------------------

Signature                                          Name:
                                                        ------------------------

------------------------------                     -----------------------------

Print Name                                         Title:


------------------------------

------------------------------

Residence Address

                                       5

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE

ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, NH  03801
Attention: __________________

          1. Exercise of Option. Effective as of today, ___________, 20__, the
undersigned Optionee hereby elects to exercise Optionee's option to purchase
________ Shares of the Common Stock of ENVIRONMENTAL POWER CORPORATION (the
"Company") under and pursuant to the Stock Option Agreement dated September 14,
2001 (the "Option Agreement").

          2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.

          3. Representations of Optionee. Optionee acknowledges that Optionee
has received, read and understood the Option Agreement and agrees to abide by
and be bound by its terms and conditions.

          4. Rights as Shareholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance.

          5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

          6. Restrictive Legends and Stop-Transfer Orders.

               (a) Legends. Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:

          THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
          ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
          THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
          SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED
          FOR SALE OR OTHERWISE TRANSFERRED,

                                      A-1

<PAGE>

          PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION
          OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AND ITS
          COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
          AND ANY STATE SECURITIES LAWS.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
          CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST
          REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
          IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL
          HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
          THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
          RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
          TRANSFEREES OF THESE SHARES.

               (b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

               (c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

          7. Successors and Assigns. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.

          8. Governing Law; Severability. This Exercise Notice is governed by
the laws of the State of New Hampshire.

                                      A-2

<PAGE>

          9. Entire Agreement. The Option Agreement is incorporated herein by
reference. This Exercise Notice, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.



Submitted by:                           Accepted by:


OPTIONEE                                ENVIRONMENTAL POWER
                                        CORPORATION



______________________________          By:_____________________________________

Signature                               Name: __________________________________



Robert I. Weisberg                      Title:__________________________________
------------------------------

Print Name



Address:                                Address:
-------                                 -------



______________________________          500 Market Street, Suite 1-E
                                        ----------------------------------------



______________________________          Portsmouth, New Hampshire  03801
                                        ----------------------------------------


                                        ________________________________________

                                        Date Received

                                      A-3

<PAGE>

                                                                       EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:         Robert I. Weisberg


COMPANY:          Environmental Power Corporation


SECURITY:


AMOUNT:


DATE:

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

(a)  Optionee is aware of the Company's business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. Optionee is acquiring
these Securities for investment for Optionee's own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").

(b)  Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.

(c)  Optionee is familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly

                                      B-1

<PAGE>

or indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 144 requires the resale to occur not
less than one year after the later of the date the Securities were sold by the
Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the following conditions:
(1) the resale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended); and, in the case
of an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three-month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.

(d) Optionee further understands that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

                                         Signature of Optionee:

                                         _______________________________________

                                         Date: __________________________

                                      B-2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>7
<FILENAME>dex51.txt
<DESCRIPTION>OPINION - DORSEY & WHITNEY LLP
<TEXT>
<PAGE>

                                                                     EXHIBIT 5.1

                                 August 20, 2002

Environmental Power Corporation
One Cate Street, 4/th/ Floor
Portsmouth, New Hampshire 03801

         Re:    Registration Statement on Form S-8

Ladies and Gentlemen:

         We have acted as counsel to Environmental Power Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, on a registration statement on Form S-8 (the
"Registration Statement") of (i) an aggregate of 3,000,000 shares of the
Company's common stock, $0.01 par value per share (the "Incentive Shares"),
which are to be offered and sold to employees, officers, consultants,
independent contractors and non-employee directors under the Company's 2001
Stock Incentive Plan (the "Incentive Plan"), (ii) an aggregate of 2,000,000
shares of the Company's common stock (the "Director Shares"), which are issuable
upon the exercise of options (the "Director Options") to purchase shares of
common stock which may have been granted and which may be granted to outside
directors of the Company under the Company's 2002 Director Option Plan (the
"Director Plan"), and (iii) an aggregate of 450,000 shares of the Company's
common stock (the "Weisberg Shares" and, together with the Director Shares, the
"Option Shares"), which are issuable upon the exercise of options (the "Weisberg
Options" and, together with the Director Options, the "Options") to purchase
shares of common stock which were granted to Robert I. Weisberg pursuant to
certain Stock Option Agreements (the "Weisberg Agreements").

         We have examined such documents and reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinion. In
conducting such examination, we have assumed (i) that all signatures are
genuine, (ii) that all documents and instruments submitted to us as copies
conform with the originals and (iii) the due execution and delivery of all
documents where due execution and delivery are a prerequisite to the
effectiveness thereof. As to any facts material to this opinion, we have relied
upon statements and representations of officers and other representatives of the
Company and certificates of public officials and have not independently verified
such facts.

         Members of our firm are admitted to the Bar of the State of New York,
and we do not express any opinion as to the laws of any jurisdiction other than
the Delaware General Corporation Law.

         Based on the foregoing, we are of the opinion that (i) the Option
Shares issuable upon exercise of the Options issued or issuable under the
Director Plan and the Weisberg Agreements will be validly issued, fully paid and
nonassessable when issued in accordance with the Director Plan and the Weisberg
Agreements, respectively, and (ii) the Incentive Shares have been duly
authorized and, upon issuance, delivery and payment thereof in accordance with
the terms of the Incentive Plan, will be validly issued, fully paid and
nonassessable.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. The foregoing opinion is being furnished to you solely
for your benefit and may not be relied upon by, nor may copies be delivered to,
any other person without our prior written consent.

                                Very truly yours,
                                /s/ Dorsey & Whitney

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<FILENAME>dex231.txt
<DESCRIPTION>CONSENT - DELOITTE & TOUCHE LLP
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.1

Independent Auditors' Consent

                  We consent to the incorporation by reference in this
Registration Statement of Environmental Power Corporation on Form S-8 of our
report dated March 1, 2002, appearing in the Annual Report on Form 10-K of
Environmental Power Corporation for the year ended December 31, 2001.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
August 21, 2002

</TEXT>
</DOCUMENT>
</SUBMISSION>
