British Gas agreement

Ceres Power Holdings plc
15 August 2005





           British Gas signs deal with Ceres Power: fuel cell boiler

                      to provide home heat and electricity



August 15, 2005: British Gas is to work on a commercial development programme
with Ceres Power Holdings plc ('Ceres Power' or the 'Company') to provide
domestic boilers that produce electricity as well as heat.



Powered by fuel cells, the revolutionary new boilers have the potential to
dramatically reduce household energy bills and cut carbon dioxide emissions.



The two companies have signed a heads of agreement to determine how the
world-leading fuel cell developed by Ceres Power can be packaged into a complete
combined heat and power ('CHP') unit that will provide household electricity as
well as heat for hot water and central heating.



The Ceres Power fuel cell will use natural gas already piped into the home. It
generates both heat and electricity when fuel is passed across its surface, and
it has already undergone many thousands of hours of successful testing.



A cube of cells, each about the size of a CD case but wafer-thin, will form the
heart of a new generation of home boilers.



Ceres Power CEO Peter Bance said: 'The insight British Gas can provide into the
requirements of home owners will be invaluable in helping us tailor the design
for mass-market application.'



Mr Bance added: 'This important commercial agreement brings together a
world-leading, high-tech UK growth company and the country's largest energy
supplier. Our ultimate goal is to enable people to have a highly efficient,
extremely safe and environmentally-friendly miniature power station in their
homes, saving them money on their energy bills and enhancing Britain's energy
security.'



Dominic Shorrocks, Director of New Growth, British Gas Home Services, said: '
Making green energy a reality is a core part of our strategy. Fuel cell-powered
boilers will make far more effective use of hydrocarbons than a conventional
boiler and will help our customers save money.'



For further information contact:



Peter Bance, Chief Executive, Ceres Power Ltd:               [phone]
404

Allan Piper, First City Financial Public Relations:              [phone]
7486


    [phone]










About Ceres Power



Ceres Power is targeting a range of global market applications including
residential CHP, stand-alone generators and auxiliary power units for transport.
  Critically, the technology uses low cost materials and existing mass
production techniques. And unlike many fuel cells, the Ceres Power cell can run
on natural gas and bottled gas as well as hydrogen.



The Company received major recognition for its green credentials when it became
the 2003 winner of the prestigious Carbon Trust Innovation Award.  More recently
the Company secured the industry's top accolade by winning the Institute of
Materials, Minerals and Mining's Gold Medal for 2005.



Since its formation in 2001, Ceres Power has raised over £25 million of funding
through two rounds of private equity and its AIM IPO in November 2004. The
Company has many blue chip City institutions as financial backers including
Fidelity, Morley, Cazenove, and Jupiter.








                      This information is provided by RNS
            The company news service from the London Stock Exchange