Ceres Power closer to mass production
LONDON (Reuters) – British alternative energy company Ceres Power moved a step closer to bringing its “green” fuel-cell boiler to the mass market on Wednesday by signing an outsourcing deal with a Dutch company.
Heating appliances maker Daalderop will make the boiler assembly, the white box that houses Ceres’s fuel cells parts, in volume, thus saving Ceres having to set up its own facility to do so.
Ceres’s combined heat and power product, which it is developing in conjunction with British Gas, enables people to use the gas and fuel already coming in to their homes to generate their own electricity, rather than buying it from the grid.
The company plans to bring the wall-mounted product to the mass market in the second half of 2011, Chief Executive Peter Bance told Reuters.
“We’re giving ourselves a couple of years of getting it right,” Bance said via telephone.
He said British Gas has already committed to forward orders for 37,500 units over four years from 2011, while its second customer Calor Gas had signed up for 20,000 units over five years.
“Within the four years of that initial phase with British Gas, we expect to reach profitability,” said Bance, adding that some British Gas customers had already expressed an interest in signing up to the product when it launches.
He expects the UK’s planned feed-in tariff to boost interest in the product further, as it means customers would receive incentives for electricity they generate within their homes.
Ceres shares, which have soared 165 percent so far this year, dropped by 5.4 percent, however, after the company announced full-year results showing a widening loss.
Analyst Philip Sparks at Evolution said the results were of secondary interest as the company is at the pre-revenue stage.
“There has been plenty of good news on development, manufacturing and government support over the last six months, and Ceres has added to that today,” he wrote in a note. “We now have a clear road map to volume and manufacturing and distribution.”
Ceres posted a full-year operating loss of 9.3 million pounds ($15.3 million), compared with a loss of 6.4 million one year previously, reflecting the costs of scaling up its operations.
It ended the year to June 30 with 23 million pounds in net cash and financial assets.
(Reporting by Victoria Bryan; Editing by Rupert Winchester)
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