Express 4.0: Cannot find module 'html' & Cannot find module 'handlebars'

For the past hour or so I've been trying to figure out why I keep getting the following error when starting an Express 4.0 application:

Error: Cannot find module 'html'
    at Function.Module._resolveFilename (module.js:338:15)
    at Function.Module._load (module.js:280:25)
    at Module.require (module.js:364:17)
    at require (module.js:380:17)
    at new View (e:\Multivision\node_modules\express\lib\view.js:43:49)
    at Function.app.render (e:\Multivision\node_modules\express\lib\application.
js:499:12)
    at ServerResponse.res.render (e:\Multivision\node_modules\express\lib\respon
se.js:955:7)
    at e:\Multivision\server.js:11:6
    at Layer.handle [as handle_request] (e:\Multivision\node_modules\express\lib
\router\layer.js:76:5)
    at next (e:\Multivision\node_modules\express\lib\router\route.js:100:13)

Basically, I just want to use plain html files for my views, as I am experimenting with the MEAN stack. Below you can find two different versions of the app.js code that I am trying to run:

VERSION 1

var express = require('express'),
    app = express();

var env = process.env.NODE_ENV = process.env.NODE_ENV || 'development',
    port = 3000;

app.set('views', __dirname + '/server/views');
app.set('view engine', 'html');

app.get('*', function(req, res) {
    res.render('index');
});

app.listen(port);
console.log('Listening on port ' + port + '...');

VERSION 2

var express = require('express'),
    app = express();

var env = process.env.NODE_ENV = process.env.NODE_ENV || 'development',
    port = 3000;

app.set('views', __dirname + '/server/views');
app.engine('html', require('consolidate').handlebars);
app.set('view engine', 'html');

app.get('*', function(req, res) {
    res.render('index');
});

app.listen(port);
console.log('Listening on port ' + port + '...');

When running VERSION 2 of the code, I get the following eror:

Error: Cannot find module 'handlebars'
    at Function.Module._resolveFilename (module.js:338:15)
    at Function.Module._load (module.js:280:25)
    at Module.require (module.js:364:17)
    at require (module.js:380:17)
    at Function.exports.handlebars.render (e:\Multivision\node_modules\consolida
te\lib\consolidate.js:488:62)
    at e:\Multivision\node_modules\consolidate\lib\consolidate.js:146:25
    at e:\Multivision\node_modules\consolidate\lib\consolidate.js:99:5
    at fs.js:266:14
    at Object.oncomplete (fs.js:107:15)

VIEW (INDEX.HTML)

<!DOCTYPE html>
<html lang="en">
<head>
    <meta charset="UTF-8">
    <title>Test Application</title>
</head>
<body>
    <h1>Hello World!</h1>
</body>
</html>

I have already looked at the other questions on this topic on StackOverflow, but could not find a proper solution. I would really appreciate it if someone could point me in the right direction or, even better, explain why this is happening.

From the consolidate documentation:

NOTE: you must still install the engines you wish to use, add them to your package.json dependencies.

Run the following and try again.

npm install --save handlebars