Ceres commences Wall Hung Fuel Cell Boiler Trial 19th February 2011

Fuel cell manufacturer, Ceres Power Holdings plc has commenced commercial field trials of its wall‐mounted Combined Heat and Power (CHP) boiler in occupied homes.

Following receipt of European type approval, an operating fuel cell CHP product generating heat and power has now been installed in the family home of a British Gas customer in South East England. The field trials programme will continue throughout 2011 and into 2012 with Ceres' CHP products being deployed in a wide range of homes across the UK. In addition, there is an extensive on‐going testing programme of CHP products and components at the Ceres' test facilities.

The first wave of CHP products is being installed in consumers' homes during the first quarter of 2011, with the second wave of products incorporating valuable in‐field experience to follow six months later. The final wave of at least 150 field trial CHP products will take place in 2012 to test the Company's ability to scale‐up for initial product sales and volume launch with British Gas.

The Ceres Power fuel cell CHP product operates on mains natural gas and can generate all of the heating and hot water and the majority of the electricity needs of a typical UK home.

The CHP boilers for the field trials are being manufactured using volume‐capable processes, with the fuel cells at the heart of the product being produced at the Ceres factory in Horsham, whilst CHP boiler assembly is taking place in Holland.

Peter Bance, Chief Executive Officer of Ceres Power, says "We have made enormous progress in the development of our product over the past few months and the start of commercial field trials is a major milestone in Ceres Power's development. I am delighted that our unique wall‐ mounted fuel cell CHP product is now being installed in consumers' homes and look forward to selling the product in conjunction with British Gas."

The field trials are being conducted in partnership with British Gas. Under the contract with Ceres Power, British Gas is paying £5 million to the Company in staged milestone payments and has also placed a forward order to purchase in aggregate a minimum of 37,500 CHP products on an escalating basis. Ceres Power will give an update on its British Gas residential CHP programme at the Company's Interim Results to be presented next month.