Centrica CHP programme

Ceres Power Holdings plc
20 March 2006

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

Ceres Power secures £2.7 million programme with British Gas to accelerate the 
introduction of fuel cells into UK homes

Ceres Power, the AIM-quoted fuel cell group, today announces its entry into a 
£2.7 million contract with Centrica plc (trading as British Gas), part funded 
by the DTI, to develop Combined Heat and Power (CHP) units for the UK 
residential market.  The programme will design, build and evaluate fuel cell 
CHP units, delivering electricity, heating and hot water, and substantially 
reducing both energy bills and CO2 emissions.

Today's announcement closely follows the Company's recent achievement of a major 
technical milestone: the successful delivery of a production-engineered 1kW fuel 
cell stack (the 'Ceres Stack') generating sufficient power for the average home.  
The Ceres Stack is the fundamental building block of micropower generation 
products aimed at a variety of consumer and commercial uses.  Under today's 
contract, Ceres will work closely with British Gas to accelerate the 
introduction of its fuel cells into UK homes.

The Government is strongly supportive of micropower generation, which represents 
a shift to the production of energy at the point of use rather than centralised 
generation, to help the country improve its energy security, meet its 
environmental obligations and deliver energy savings to consumers.  Micropower 
products have the potential to supply over one third of Britain's total 
electricity needs.

Peter Bance, CEO of Ceres Power, comments:

'We are delighted to make this important announcement as it marks the transition 
of our partnership with British Gas to a commercial programme to deliver fuel 
cell products to the mass market.  Ceres technology will enable up to two-thirds 
of UK households to use highly efficient and environmentally-friendly CHP 
appliances in their homes.'

Dominic Shorrocks, British Gas, Director New Business Growth, comments:

'Making green energy a reality is an important part of our future strategy.  
This milestone brings us a step closer to delivering a technological revolution 
for consumers, which confirms our commitment to empowering British Gas customers 
to use energy efficiently, with the potential to dramatically reduce household 
energy bills and cut carbon dioxide emissions.  Our partnership approach 
acknowledges our confidence in the future of micropower and the development of 
Ceres fuel cells, which are uniquely designed to appeal to the demands of a mass 
market.'

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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