14th Jan 2008 07:01
Centrica plc enters into equity investment, development and distributionagreement with Ceres Power Holdings plc Centrica plc today announced it has agreed to buy new shares in Ceres PowerHoldings plc ('Ceres Power') at a price of 300 pence per share, representing9.999 per cent of the company's share capital for a total cost of approximately£20 million. The transaction is subject to the approval of Ceres Power'sshareholders. Ceres Power is an AIM-listed business developing combined heat and power systems('CHP units') based on solid-oxide fuel cell technology. Once successfullydeveloped, these CHP units will operate in the same manner as domestic centralheating boilers, but will also deliver cheap, low carbon electricity into thehome to reduce the need to buy electricity, whilst significantly reducinghouseholds' carbon footprint. Under the terms of a development and distribution agreement (conditional on theapproval by Ceres Power's shareholders of the transaction), British Gas ServicesLtd, a wholly-owned subsidiary of Centrica, will pay £5 million to Ceres Powerin staged payments to support the development of the CHP units. £4 million ofthis is conditional upon the achievement of specific technical milestones. The Agreement will also grant British Gas Services Ltd exclusive rights in GreatBritain to market and sell the Ceres CHP unit to domestic customers for fouryears, subject to minimum order volumes. Approximately 1.5 million boilers are replaced each year in Great Britain and itis forecast that residential CHP could take 30 per cent of this market by2015(1), providing strong growth potential once the technology has beensuccessfully developed. Sam Laidlaw, Chief Executive of Centrica, said: "Fuel cell technology has thepotential to transform the domestic central heating market, enabling ourcustomers to generate cheap, reliable and low-carbon electricity in their ownhomes. The Agreements with Ceres Power will help us deliver our strategy ofinvesting in low carbon technology development." This proposed investment supports Centrica's ongoing promotion of energyefficiency among its British Gas customer base. Ceres Power currently forecaststhat fuel cell boilers could provide energy bill savings for the averagehousehold of approximately 25 per cent per year and reduce annual householdcarbon dioxide emissions by up to 2.5 tonnes(2). \* TEnquiries:Investor relations: 01753 494900Media relations: 0845 072 8002\* T Notes: (1) Society of British Gas Industries, 2006. (2) Based on a typical British Gas customer replacing a standard boiler. Copyright Business Wire 2008Related Shares:
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