Trading Statement

Ceres Power Holdings plc
01 December 2006

                                        
                            Ceres Power Holdings plc
                    ('Ceres', 'Ceres Power' or the 'Company')
                                        
        Technical Update: Key Performance and Durability Targets Achieved

Ceres Power, the AIM-quoted fuel cell group, is today providing an update on 
the progress achieved in the development of its unique patented fuel cell 
technology. Ceres' continued focus is to utilise its technology to deliver a 
set of commercially viable products that can be mass manufactured and meet a 
clear market need.

Rigorous testing of the fuel cell stacks has demonstrated that the required 
levels of durability and performance can be delivered for the market 
applications it is targeting, namely domestic combined heat and power (CHP) 
boilers, off-grid generators and auxiliary power units (APUs).

• Successful completion to date of more than 7,500 hours of fuel cell stack 
testing, reflecting the unique design and the use of well-proven manufacturing 
techniques

• Testing of more than 50 stacks of up to 1kW power output with repeated thermal 
cycling (on/off) between room temperature (20oC) and operating temperature 
(600oC) without performance degradation

• Stack testing on a range of commercially available fuels including natural 
gas, LPG and propane demonstrating the capability to meet the performance 
requirements of a wide range of target market applications

• Validation of stack manufacturing and assembly processes with more than 1,000 
stack sub-assemblies constructed with a zero failure rate.

As a result of the performance demonstrated during the testing programme our 
core stack technology has been frozen. This technology will be appropriate for 
power outputs between 0.5kW and 5kW.

Integrated fuel cell systems have also been demonstrated by coupling 
lightweight, compact stacks and fuel processors with other key balance of plant 
components for our planned domestic CHP applications. Our focus is now on 
completing the designs of end-user products.

As announced at the preliminary results in September, we are currently equipping 
a new product facility which is expected to be operational by mid-2007 and is 
designed to produce limited volumes of prototype products incorporating volume 
manufacturing solutions.  These units will be used both for demonstrations and 
larger field trials. The facility will also be used to develop and validate the 
manufacturing and assembly processes prior to transfer to mass production.

The scale-up process has been substantially de-risked with the establishment of 
a supply chain to procure cell, stack and system components utilising 
technologies with well-proven design lives in excess of 10 years. We are already 
working closely with a number of OEMs to finalise the arrangements for volume 
assembly of products utilising fuel cell stacks that will be manufactured by 
Ceres at a 'mother plant' facility planned to be commissioned in mid-2008.

Peter Bance, Chief Executive of Ceres Power, commented:

'Our testing has demonstrated that our unique technology has overcome many of 
the obstacles faced by other fuel cell technologies and can deliver  durable, 
efficient and cost effective mass market solutions. We are now focused on 
completing the design of commercial, compact end-user products.'

                                    - 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-quoted 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, Liquefied Petroleum 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 function of mechanical 
support from electrochemistry.

The electrochemical layers can then be made extremely thin and optimised for 
maximum performance, resulting in industry-leading 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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