Ceres Power, the AIM-quoted fuel cell group, today announces its entry into a £2.7 million contract with Centrica plc (trading as British Gas), part funded by the DTI, to develop Combined Heat and Power (CHP) units for the UK residential market.  The programme will design, build and evaluate fuel cell CHP units, delivering electricity, heating and hot water, and substantially reducing both energy bills and CO2 emissions.

Today's announcement closely follows the Company's recent achievement of a major technical milestone: the successful delivery of a production-engineered 1kW fuel cell stack (the "Ceres Stack") generating sufficient power for the average home.  The Ceres Stack is the fundamental building block of micropower generation products aimed at a variety of consumer and commercial uses.  Under today's contract, Ceres will work closely with British Gas to accelerate the introduction of its fuel cells into UK homes.

The Government is strongly supportive of micropower generation, which represents a shift to the production of energy at the point of use rather than centralised generation, to help the country improve its energy security, meet its environmental obligations and deliver energy savings to consumers.  Micropower products have the potential to supply over one third of Britain's total electricity needs.

Peter Bance, CEO of Ceres Power, comments:

"We are delighted to make this important announcement as it marks the transition of our partnership with British Gas to a commercial programme to deliver fuel cell products to the mass market.  Ceres technology will enable up to two-thirds of UK households to use highly efficient and environmentally-friendly CHP appliances in their homes."

Dominic Shorrocks, British Gas, Director New Business Growth, comments:

"Making green energy a reality is an important part of our future strategy.  This milestone brings us a step closer to delivering a technological revolution for consumers, which confirms our commitment to empowering British Gas customers to use energy efficiently, with the potential to dramatically reduce household energy bills and cut carbon dioxide emissions.  Our partnership approach acknowledges our confidence in the future of micropower and the development of Ceres fuel cells, which are uniquely designed to appeal to the demands of a mass market."