Energy EDF contract
Ceres Power Holdings plc
27 March 2007
Ceres Power Holdings plc
('Ceres', 'Ceres Power' or the 'Company')
Ceres secures funded development contract with EDF Energy Networks
to design, build and evaluate domestic power products
Ceres Power, the AIM-quoted fuel cell group, today announces that it has entered
into a programme with EDF Energy Networks to design and build innovative power
generation appliances to provide back-up electricity for the home. This new
commercial relationship is part of the Company's strategy for providing
'on-site' power generation from cylinder gas, and will help create a new range
of products in addition to the Company's existing Combined Heat and Power (CHP)
initiatives running on the natural gas network.
EDF Energy Networks is the UK's largest electricity distributor, providing power
to a quarter of the UK's population via its distribution networks in London, the
South East and the East of England. It is part of the EDF Group, an integrated
energy operator present in all sectors of the electricity industry, and also
offering natural gas and energy services, with over 40 million customers
worldwide.
EDF Energy Networks will be funding the project through Ofgem's Innovation
Funding Incentive mechanism, and will be paying over £600,000 to Ceres
representing its 50% share of the £1.2 million costs of the first phase of the
programme. Ceres will design and build initial prototype products available for
evaluation during 2008 and 2009. These products will combine the Company's
unique fuel cell technology with batteries in a hybrid format. Initial users are
expected to be vulnerable customers for whom the security of a dependable home
power supply in the event of grid interruption is extremely important. There are
over 100,000 such customers on EDF Energy Networks' register for priority
services.
The next phase of the agreed programme covers delivery of production-ready units
to EDF Energy Networks, and entry into a volume supply contract.
Similar products can be used for related 'on-site' applications including
uninterruptible power supplies (UPS), load-shedding solutions, remote power
generation and battery charging. Addressable markets include homes, small and
medium sized enterprises (SMEs), leisure, retail and healthcare. The contract
with EDF Energy Networks accelerates the introduction of Ceres products into a
variety of sectors and geographies, representing a substantial new opportunity
for the Company.
Peter Bance, CEO of Ceres Power, comments:
'We are delighted to make this important announcement, and to be working with
EDF Energy Networks. The contract underpins Ceres' ability to address multiple
markets using our unique platform technology. We are now moving ahead with
funded commercial agreements in this sector, validating our strategy and
strengthening our income stream whilst maintaining a keen focus on our core
technology that is common to all our target markets.'
Paul Cuttill, Chief Operating Officer, EDF Energy Networks, comments:
'This programme illustrates EDF Energy's commitment to working towards a
sustainable future. The Ceres technology offers an excellent way of doing this.
We look forward to working with Ceres to bring these products to our customers.'
For further information contact:
Peter Bance, Chief Executive, Ceres Power +44 (0) 1293 400 404
Patrick d'Ancona, M: Communications +44 (0) 207 153 1531
- ends -
About EDF Energy
EDF Energy is one of the UK's largest energy companies. We provide power to a
quarter of the UK's population via our electricity distribution networks in
London, the South East and the East of England. We supply gas and electricity to
over 5 million customers and generate about 5GW of energy from our coal and gas
power stations, as well as combined heat and power plants and wind farms. The
company is also a key player in national infrastructure projects, including the
electrical upgrading of the London Underground, management of private
electricity networks serving four London airports and the Channel Tunnel Rail
Link, the country's first new railway in 100 years. We employ nearly 13,000
people at locations across the UK. EDF Energy is a core part of EDF Group, one
of the world's largest power companies.
Sustainable Futures will tackle the big social and environmental challenges
facing the industry, issues such as climate change, affordability and security
of supply. EDF Energy will continue to develop new products and services for the
changing world in which social and environmental concerns are as important as
financial ones.'
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 for the cell substrate and throughout the key product components.
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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