Headwaters Incorporated announces start-up of the Blue Flint Ethanol facility

SOUTH JORDAN, Utah - Headwaters Incorporated (NYSE:HW) and Great River Energy, an energy provider headquartered in Elk River, Minnesota, announced today the start-up of Blue Flint Ethanol LLC in Underwood, ND. The ethanol plant is co-located with the 1,100 megawatt Coal Creek Station and will use excess heat from the adjacent power plant to process an estimated 18 million bushels of corn into 50 million gallons of fuel ethanol annually.

Blue Flint is unique in the ethanol industry. “We believe this is the first ethanol plant in the world to be directly integrated with a major power producer like the Coal Creek Station,” said Ken Frailey, president of Headwaters Energy Services. “It is a state-of-the-art facility and we expect Blue Flint to be one of the industry’s lowest-cost producers of ethanol.”

“Great River Energy is pleased to see the much anticipated start-up of Blue Flint Ethanol. The unique integration with Coal Creek Station, and elimination of many costs associated with fuel, boilers and infrastructure, is significant in that it will help make Blue Flint a low-cost producer of ethanol,” said John Weeda, plant manager, Great River Energy’s Coal Creek Station.

Headwaters and Great River Energy began discussions to develop the ethanol facility in early 2005. A subsidiary of Headwaters is a majority owner, and a Headwaters company will act as Blue Flint’s operator, while Great River Energy, holding a minority position, will provide energy and related services to the plant.

According to Headwaters CEO, Kirk Benson, “Headwaters has enjoyed a productive long-term relationship with Great River Energy. The Blue Flint project is an important example of working together to produce clean and cost-effective energy by optimizing domestic natural resources.”

About Headwaters Incorporated
Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. Headwaters is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building materials businesses, the Company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

About Great River Energy
Great River Energy, Elk River, Minn. is a not-for-profit generation and transmission cooperative providing electricity to 28 distribution cooperatives in Minnesota and Wisconsin. It is the second largest power supplier in the state of Minnesota, and the fourth largest cooperative of its type in the nation. It owns and operates Coal Creek and Stanton stations in North Dakota.

Forward-Looking Statements:
Certain statements contained in this report are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Headwaters’ expectations as to the managing and marketing of coal combustion products, the production and marketing of building materials and products, the licensing of technology and chemical sales to alternative fuel facilities, the receipt of product sales, license fees and royalty revenues, which are subject to tax credit phase out risks, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters’ future business plans, the operation of facilities, the availability of tax credits in an environment of high oil prices and potential tax credit phase out, the availability of feedstocks, and the marketability of the coal combustion products, building products, and synthetic fuel, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to help identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. In addition to matters affecting the coal combustion product, alternative fuel, and building products industries or the economy generally, factors which could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the captions entitled "Forward-looking Statements" and “Risk Factors” in Item 7 in Headwaters’ Annual Report on Form 10-K for the fiscal year ended September 30, 2006, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses.

Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Our internet address is www.headwaters.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our web site.

For more information:

Headwaters Incorporated
Sharon Madden
801-984-9400