New British Gas CHP agreement

Ceres Power Holdings plc
14 January 2008


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

            Ceres Power and British Gas enter development, supply and
                  distribution agreement for UK residential CHP

Ceres Power, the AIM-quoted fuel cell group, today announces that it has signed 
a major new agreement with Centrica (trading as British Gas) including a funded 
trialling programme and a volume forward order for residential combined heat 
and power products ('CHP').  In addition, and subject to the approval of Ceres 
Power shareholders, Centrica will subscribe for new shares representing 9.999 
per cent of the Company's enlarged issued share capital at a price of 300 pence 
per share, equivalent to a cash investment of around £20 million.

This agreement follows the successful recent demonstration of Ceres Power's 
industry-leading wall-mountable fuel cell CHP unit, which was one of the key 
milestones of the Company's current CHP programme with British Gas.

Under the terms of this new agreement, British Gas will pay £5 million to the 
Company in staged milestone payments over an initial phase ('Initial Phase'), 
with the first payment of £1 million to be made following Ceres Power's 
shareholder approval and the remainder subject to achievement of certain 
technical milestones.  During the Initial Phase, which is expected to be 
completed in 2011, Ceres will complete the value engineering of the CHP Product 
and, together with British Gas, conduct commercial in-field trials with 
residential customers and commence initial sales. British Gas is committing its 
operational resources to support the roll-out of CHP Products including 
training, installation, servicing and logistics.

British Gas has also placed a forward order to purchase in aggregate a minimum 
of 37,500 CHP Products on an escalating basis over a four-year period.  This 
order is conditional upon the successful completion of the Initial Phase and on 
the companies agreeing standard commercial terms including the price for supply 
of the CHP Products.  Both Ceres and British Gas have agreed to promote the 
Ceres CHP Product with the intention of achieving substantially greater levels 
of annual sales over the four-year period.  Approximately 1.5 million boilers 
are installed each year in the UK and it is forecast by industry and 
governmental bodies that residential CHP could take 30 per cent of this market 
by 2015 (see SBGI 2006).

For the duration of the agreement, British Gas has the exclusive right to supply 
and distribute the Company's CHP Products to the residential UK market subject 
to British Gas purchasing at least the minimum annual order volumes for each 
year of the forward order. Ceres Power retains the right to supply and 
distribute CHP Products anywhere else in the world and the right to exploit its 
innovative fuel cell technology in other applications globally including in the 
UK.

Peter Bance, CEO of Ceres Power, said:

'The investment Centrica is making in our business reflects the success of our 
collaboration over the last two years and the confidence both companies have in 
Ceres Power's fuel cell technology.  We are delighted to continue our close 
relationship with British Gas and are excited about the prospect of taking our 
innovative CHP Product to market with the UK's largest boiler installation 
company.'

Sam Laidlaw, CEO of Centrica, said:

'Fuel cell technology has the potential to transform the domestic central 
heating market, enabling our customers to generate cheap, reliable and 
low-carbon electricity in their own homes. This agreement with Ceres Power will 
help us deliver our strategy of investing in low carbon technology development.'

The issue of the new shares is subject to the approval of Ceres shareholders at
the general meeting of the Company to be held at 10:30am on 1st February 2008. 
The supply and distribution agreement is conditional upon the allotment of the 
new shares to Centrica.

The Company will shortly be posting the shareholder circular convening the 
general meeting to its shareholders. A copy of the shareholder circular, which 
also contains further details of the transaction, is available at 
http://www.cerespower.com/investor/shareholder.htm


For further information contact:

Peter Bance, Chief Executive, Ceres Power:                 [phone]
Patrick d'Ancona / Charlotte Kirkham, M: Communications    [phone]
Alisdair Gayne, Morgan Stanley                             [phone]


Notes to Editors:

Today's announcement follows the Company's recent achievement of a major 
technical milestone: the successful demonstration of an industry-leading fuel 
cell CHP Unit.  Ceres Power's unique wall-mountable CHP Unit is designed to 
produce electricity and meet all of the hot water and central heating needs of 
a typical UK home.  The CHP Unit is designed to substantially reduce residential 
energy bills and carbon emissions, by avoiding much of the energy losses in 
generation and transmission associated with centralised power generation. The 
technology has the potential to reduce a typical British Gas customer's 
household CO2 emissions by up to 2.5 tonnes per year when replacing a standard 
boiler, and to lower annual energy costs by several hundred pounds.

Government is also strongly supportive of micropower generation, which 
represents an industry shift to the production of energy at the point of use 
rather than relying entirely on centralised generation.  The UK Government has 
estimated that, over time, micropower products have the potential to supply over 
one-third of Britain's total electricity needs and to help the country improve 
its energy security, meet its environmental obligations and deliver energy 
savings to consumers.  The UK Government has implemented legislation driving 
the new build sector towards greener homes and has also put in place fiscal 
measures including VAT reduction to 5% and capital grants to accelerate the 
uptake of residential CHP.




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