Manufacturing scale-up award

Ceres Power Holdings plc
07 September 2006


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

      Ceres secures regional support to help drive manufacturing scale-up

Ceres Power, the AIM-quoted fuel cell group, today announces that it has secured
a Grant for Research & Development from the South East England Development
Agency (SEEDA), funding one third of a £600,000 programme to support the
scale-up of key processes for the manufacturing of its unique fuel cells.

Ceres will work with supply chain partners to apply and integrate technology
suitable for high volume production of the metal supported cells. The production
process will include fully automated techniques with parts handled robotically
to maximise throughput, minimise costs and ensure quality.

The fuel cells themselves are suitable for multiple market applications by
virtue of their performance, durability and costs. The programme will therefore
help to deliver production capability for multiple Ceres products, from domestic
combined heat and power (CHP) units, through off-grid generators to vehicle
auxiliary power systems.

The programme is part of a comprehensive set of measures being put in place by
Ceres to ensure production and assembly methods deliver consistent, low cost,
high quality output, as the Company targets both niche and mass market
opportunities. These measures are designed to allow manufacturing capacity to
scale in line with anticipated demand for Ceres products.

Peter Bance, Chief Executive of Ceres Power, commented:

'We are delighted to be working with SEEDA for the first time and to have been
awarded a Grant for Research & Development which will enable us to significantly
scale up our automated production techniques. We very much look forward to
working with SEEDA over the coming months and years as we continue to develop
our engineering and manufacturing capabilities.'

SEEDA's Executive Director of Business & International, Jeff Alexander, added:

'We are very excited about this opportunity to support a leading company with
its growth plans in the alternative energy sector, which we believe has truly
global potential and represents a chance for the UK to take a leadership role on
the international stage. As a key element of its commercialisation plans, Ceres
is focussed on ensuring the route to volume manufacture of its products is well
established. As the Company continues to expand both its own operations and its
channels to market, we are looking forward to it becoming a significant force in
our region and beyond.'
                                        
                                    - 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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