Ceres Power Holdings

Shares in Ceres Power Holdings (CWR.L) rose sharply this morning on the news that Centrica, the parent company of British Gas, has taken a 10% stake in the AIM-listed fuel cell company. The shares are being bought at £3.00 per share, substantially lower than the £3.25 they reached last September when Ceres announced successful trials of their domestic combined heat and power (CHP) boiler. (“Domestic Micro-CHP”)

The total investment is around £20m. Centrica will also pay £5m to Ceres in staged payments to support the development of the CHP units, with £4m conditional upon the achievement of specific milestones. The agreement will grant British Gas rights in Great Britain to market and sell the Ceres CHP unit to domestic customers for four years. Last September, British Gas commented:

“Plans are underway to move from the demonstrator prototype to field trials which will culminate in a commercially available product, but it will be a few years off before we have anything on sale to customers.”

Today’s announcement is consistent with that position, providing a guaranteed investment stream for product development, so no immediate prospect of having our own gas-powered power station. We can only speculate on the kind of take-up BG will get for this product. Those who remain skeptical of the idea that small individualistic gestures can ever change the world will no doubt dismiss it as an irrelevance. And what use will it be when the gas runs out?

These uncertainties don’t seem to bother E.ON, who have today announced a similar agreement, with Energetix Group (EGX.L), to develop a micro-CHP device. E.ON will fund the testing and evaluation of a Genlec micro-CHP system at the Energetix facility in Cheshire. The evaluation, scheduled for completion in the first half of this year, will outline the energy savings achieved during testing of the system and assess its commercial value. E.ON estimates that the device could reduce residential energy bills by up to £150 a year.