Key Technical Milestone

Ceres Power Holdings plc
13 March 2006


                            Ceres Power Holdings plc
                    ('Ceres', 'Ceres Power' or the 'Company')
                                        
           Key Technical Milestone: Compact, Lightweight 1kW Fuel Cell


Ceres Power, the AIM-quoted fuel cell group, today announces that it has taken 
a major step in commercialising its technology with the achievement of a 
critical milestone.  The Company has successfully designed, built and tested 
a 1kW fuel cell stack (the 'Ceres Stack') generating sufficient power for the 
average home.

The production-engineered Ceres Stack is extremely compact, both smaller and 
lighter than a typical car battery.  It is designed to be reliable, robust 
and economical, lending itself to rapid mass market uptake.

The Ceres Stack is the fundamental building block of micropower generation 
products aimed at a variety of consumer and commercial uses.  These include 
combined heat and power (CHP) units in homes running off natural gas, in 
addition to electrical generators using bottled gas fuels and auxiliary power 
units for vehicles.

The Ceres Stack incorporates multiple engineering innovations to deliver 
breakthrough savings in size, weight, component count and production cost, 
whilst improving product performance.  The unique Ceres technology allows the 
fuel cells to start up and shut down rapidly and repeatedly, withstand 
mechanical shock and have very long lifetimes under realistic operating 
conditions.

Ceres is working in a commercial development programme with Centrica plc 
(trading as British Gas) to provide domestic CHP systems in the UK, 
substantially reducing both energy bills and CO2 emissions.  Ceres CHP products 
are designed to produce electricity and heat in the home from natural gas.  
British Gas estimates that 'this makes the technology immediately accessible by 
14.5 million UK households'.

The UK Government has already identified micropower generation as a core 
technology within national energy policy.  The Ceres Stack will enable fuel 
cells to play a key role in the widespread uptake of micropower products.

Peter Bance, CEO of Ceres Power, comments:

'The successful delivery of a 1kW fuel cell lies at the heart of our plans to 
bring product to market both via existing partnerships and new customers in the 
UK and overseas.  As concerns grow over rising utility bills, security of energy 
supply and how to meet environmental targets, the opportunity for Ceres to build 
its business and create further value for shareholders has never been better.'

For further information:

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


High resolution images to accompany this announcement are available for the
media to download free of charge from www.vismedia.co.uk.

Paste the link below into your browser for an image of Peter Bance, Chief 
Executive of Ceres Power, with fuel cell: www.cerespower.com/investor/stack.htm


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 LPG, propane and natural gas 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 in the UK for green 
technology with the best commercial potential.

More recently, Ceres secured the industry's top 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.

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 rather than ceramic 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 when heat 
demand is modest.

Instead of totally ceramic cells, these metal-supported cells are mechanically 
highly robust and can be easily sealed (e.g. through welding) and have thermal 
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 LPG, propane, natural 
gas and alcohols.

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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