Industry Partnership

Ceres Power Holdings plc
14 July 2006


                            Ceres Power Holdings plc
                    ('Ceres', 'Ceres Power' or the 'Company')

           New Ceres partnership with Rolls Royce and Johnson Matthey
                to address UK's long-term sustainable power needs


Ceres Power, the AIM-quoted fuel cell group, today announces that it is
partnering with leading engineering groups Rolls Royce and Johnson Matthey, as
part of a government-backed programme to deliver innovations in sustainable
power generation and supply. The programme stems from the current Energy Review
and will help identify long-term solutions to meet the needs of UK industrial
and domestic consumers.

The DTI-sponsored 'SuperGen' programme comprises four consortia of research
institutions working in tandem with industry to examine wave and tidal power,
future network technologies, hydrogen energy and bioenergy. A particular focus
is microgeneration, and Ceres and its partners will help stimulate and manage
fuel cell research from top UK public laboratories.

Ceres Power is the only SME invited to participate and will be positioned in the
project alongside the top fuel cell companies, not only in the UK, but on the
international stage.

By participating in the programme, the industry consortium partners will have
the right to guide over 50 man-years of world-class fuel cell research. The
Company will continue to focus its own resources on short- to medium-term
product engineering, manufacturing excellence and strategic partnerships to help
drive revenue growth.

Peter Bance, Chief Executive of Ceres Power, commented:

'In this week's Energy Review, the UK government firmly committed to advancing
development of clean-energy technology, such as fuel cells. We are delighted to
be among the participants in the SuperGen consortium, working so closely with
major industry players such as Rolls Royce and Johnson Matthey as well as
several leading UK research institutions.'

                                    - ends -
For further information contact:

Peter Bance, Chief Executive, Ceres Power               [phone]

Patrick d'Ancona / Charlotte Kirkham                    [phone]
M: Communications


About Ceres Power

Ceres is a successful AIM-listed fuel cell business developing a range of global 
market applications including residential combined heat and power, on-site / 
back-up 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 cell can run on widely available fuels 
like natural gas, LPG and biofuels as well as on hydrogen.

Since its formation in 2001, the Company has received major recognition for its 
technology and business credentials.

Ceres won the prestigious 2003 Carbon Trust Innovation Award for the UK's green 
technology with the best commercial potential.

More recently, Ceres secured a top industrial accolade by winning the Institute 
of Materials, Minerals and Mining's Gold Medal for 2005.

In January 2006, Ceres Power was selected as the only fuel cell company in the 
government's new Energy Research Partnership, contributing directly to national 
energy policy.

Ceres Power has raised over £25 million of funding through two rounds of private 
equity and its AIM IPO in November 2004.  The company enjoys the support of many 
blue chip City institutions as financial backers including Fidelity,Morley and 
JP Morgan.


About Ceres Power's Technology

Ceres fuel cell stacks are comprised of multiple fuel cells layered on top of 
one another, each made from stainless steel with tiny amounts of ceramic 
coating.  The cells combine fuel and air to create electricity and heat via a 
quiet, solid state electrochemical process similar to a battery.  As this 
process does not involve combustion, unlike an engine or burner, it is highly 
efficient and environmentally friendly.

Ceres has developed a unique adaptation of Solid Oxide Fuel Cell (SOFC) 
technology, able to operate at temperatures substantially lower than 
conventional designs which run at 800 - 1000 degrees C.  By using a new 
generation of ceramic materials known as CGO (cerium gadolinium oxide) instead 
of the industry standard YSZ (yttria stabilised zirconia), operation at 500 - 
600 degrees becomes possible.  This in turn allows use of conventional stainless 
steel as the cell substrate, separating the functions of mechanical support from 
electrochemistry.

The electrochemical layers can then be made extremely thin and optimised for 
maximum performance, resulting in world-beating power density levels, whilst the 
stack material costs are radically reduced. The efficiency of converting fuel 
into electricity and heat is therefore very high and this efficiency is 
maintained across a wide part-load range. In addition, the heat-to-power ratio 
is approximately one-to-one making the technology ideal for applications such as 
CHP, where levels of electrical output need to be maintained even where heat 
demand is modest.

In contrast to totally ceramic cells, these metal-supported cells are 
mechanically highly robust and can be easily sealed (e.g. through welding) and 
have thermal expansion coefficients well matched to their ceramic coatings.  
This allows great resistance to thermal shock, permitting rapid start-up times 
and the potential for thousands of ON / OFF cycles for everyday usability.  
In addition, the technology retains the fuel flexibility of SOFC, and has proven 
ability to run highly efficiently on commercially available fuels such as 
natural gas, LPG and biofuels.

In conjunction with the Ceres Stack programme, the Company has been developing 
the non fuel cell elements within the complete product, known as the balance 
of plant ('BOP'), as part of its systems integration activities aimed at 
delivering products for specific customers.  Because of the unique attributes 
of the technology, Ceres Power has been able to dramatically reduce the time 
and cost of BOP development and systems integration by utilising mature 
component supply chains and ordinary, low cost materials. Unlike other fuel 
cell designs which operate at more extreme temperatures, time-consuming and 
expensive bespoke solutions for BOP components are not required.



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