CFU signs agreement with Hills Holdings Ltd

Ceramic Fuel Cells signs BlueGen sales and service agreement with Hills Holdings Limited

24 January 2011

Ceramic Fuel Cells Limited [AIM/ASX:CFU], a leading developer of high efficiency and low emission electricity generation units for homes and other buildings, has signed an agreement with Adelaide-based Hills Holdings Limited for Hills to sell and service Ceramic Fuel Cells' BlueGen gas-to-electricity units.

Under the agreement Hills will distribute BlueGen, initially in South Australia. Hills will also provide installation and after-sales service for BlueGen products Australia-wide and will help Ceramic Fuel Cells to develop the market for BlueGen.

Hills, listed on the Australian Stock Exchange, is a leading manufacturer, distributor and installer of home products including premium solar hot water products. Hills had revenues last financial year of AUD 1.1 billion.

Hills has a wide range of businesses in three major categories: home, hardware and eco products; electronic security and entertainment; and building and industrial products.

The Australian market for BlueGen is estimated to be several hundred thousand units - the number of households connected to natural gas is more than three million.

In December 2010 German utility EWE, following two years of testing, placed an order worth up to AUD 6.6 million for up to 200 integrated micro CHP products made using Ceramic Fuel Cells' patented technology.

BlueGen units are the latest breakthrough in small scale electricity generation. BlueGen uses ceramic fuel cells to turn natural gas into electricity and heat for hot water. Each BlueGen unit can produce twice the electricity needed to power an average Australian home. Surplus electricity can be sold back to the grid. BlueGen units can generate electricity at up to double the efficiency of the current Australian power grid, providing significant cost savings off energy bills and large carbon savings.

"We are delighted to have signed this agreement with Hills, an iconic Australian company in the home hardware and eco products market," said Brendan Dow, Ceramic Fuel Cells' Managing Director. "This agreement represents a further validation of our BlueGen product and what it can achieve in the energy market."

Mr Dow added: "Hills designs, develops and makes its own appliances and solar products, so there are also longer term strategic opportunities for us to collaborate on the BlueGen manufacturing and supply-chain side."

The agreement is in line with Ceramic Fuel Cells' strategy to sell BlueGen units in Australia through distributors and to outsource the installation and service of BlueGen units. The agreement with Hills follows similar BlueGen distribution agreements with green products retailer Neco, based in Melbourne, and Harvey Norman's Commercial Division, in NSW and the ACT.

In December Ceramic Fuel Cells installed a BlueGen unit at Adelaide Central Market in Gouger Street, Adelaide. The Adelaide City Council and the State Government are demonstrating the unit for 12 months as part of a free electric vehicle charging station at the Markets. This is the first BlueGen unit installed in South Australia. BlueGen units are also operating in Melbourne, Sydney, Canberra and in Europe, Japan and the USA.

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About Ceramic Fuel Cells Limited:

Ceramic Fuel Cells Limited is a world leader in developing fuel cell technology to provide highly efficient and low-emission electricity from widely available natural gas. Ceramic Fuel Cells is developing fully integrated power and heating products with leading energy companies E.ON UK in the United Kingdom, GdF Suez in France and EWE in Germany.

Ceramic Fuel Cells has sold more than 50 BlueGen gas-to-electricity generators to major utilities and other foundation customers in Germany, the United Kingdom, Switzerland, The Netherlands, Japan, Australia and the USA.

Ceramic Fuel Cells is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU).

www.cfcl.com.au