An overview is given of the approach and mid-term status of the joint European ＇Advanced DIR-MCFC Development＇ project, in which BCN, BG plc, GDF, ECN, Stork, Schelde and Sydkraft co-operate. Hospitals are identified as an attractive initial market for cogeneration direct internal reforming-molten carbonate fuel cell (DIR-MCFC) systems in the size of 400 kWe. Innovative system and stack design concepts are being developed for this application. The ＇SMARTER＇ system, based on DIR stacks. combines high electric efficiency and a wide operational window with optimal system simplicity and low cost.