German market update

Tuesday 8 May 2012

Continued Progress in Germany

·; Subsidy for early BlueGen units in the State of Saarland

·; BlueGen Unit in German Virtual Power Plant project

·; BlueGen features at Hannover Fair

Ceramic Fuel Cells Limited (AIM / ASX: CFU) - a leading developer of high efficiency and low emission electricity generation products for homes and other buildings - is pleased to announce that its BlueGen gas-to-electricity units continue to generate strong interest in the German market.

Premier of the State of Saarland launches market introduction program

In the beginning of May 2012, Ms Annegret Kramp-Karrenbauer, the premier of the German State of Saarland, officially announced that the State will subsidise the cost of early BlueGen units. Under the "Climate Plus Saar" program, the State Government will pay 30 percent of the total cost of BlueGen units, including installation, for up to ten BlueGen units installed in Saarland.

Ms Kramp-Karrenbauer made the announcement when putting the State's first BlueGen unit into operation in the State capital of Saarbrücken.

This subsidy from the Saarland State Government is in addition to the subsidy from the German Federal Government, of 1,800 Euros per unit, and the existing feed in tariff regime, under which BlueGen customers get paid for excess electricity generated by BlueGen and exported to the local electricity grid.

The BlueGen product uses ceramic fuel cells to turn natural gas into electricity and heat for hot water, for homes, schools, offices and small commercial buildings. Surplus electricity can be sold back to the grid or used in supplementary applications such as charging electric cars. BlueGen units have the highest electrical efficiency of any small scale generating technology in the world, reducing energy bills and cutting carbon emissions.

Ceramic Fuel Cells and its German distribution partner sanevo are continuing to deliver and install sanevo's first order of 100 BlueGen units, as well as building the sales pipeline for future orders.

BlueGen Unit in German Virtual Power Plant

Ceramic Fuel Cells Limited is pleased to announce that one of its BlueGen gas-to-electricity units is operating as part of a Virtual Power Plant project in Germany. The BlueGen unit is operating in the Harz region, south of Hannover as part of the "RegModHarz" project, to develop and operate a Virtual Power Plant combining renewable energy and controllable distributed generation (creating electricity at the point of use).

A Virtual Power Plant is a cluster of distributed electricity generation units, controlled and operated by a central entity using integrated software systems. A Virtual Power Plant allows power generation to be modulated up or down to meet peak loads and balance intermittent power from wind or solar, with higher efficiency and more flexibility than large centralised power stations.

As the share of renewable electricity increases, one of the challenges for power grid operators is to match intermittent electricity supply with the local demand for power. In the Harz region of Germany about one-third of electricity used is produced from renewable sources. Controllable distributed generation, like BlueGen, can help balance this renewable generation. Each BlueGen unit is controlled over the internet and the power output can be turned up or down remotely, to help balance supply and demand of electricity. The RegModHarz project is funded by the German Federal Ministry for the Environment, Nature Conservation and Reactor Safety.

BlueGen featured at Germany's largest energy fair

BlueGen's involvement in the RegModHarz project was recently announced at the Hannover Fair, one of Germany's largest and most important energy industry events.

This year more than 190,000 visitors attended the fair, the highest number since 2008. The fair featured about 5,000 exhibitors from 69 countries.

Ceramic Fuel Cells exhibited the BlueGen product as part of the German Fuel Cell Initiative ("Initiative Brennstoffzelle", or IBZ). The IBZ is a consortium of leading German energy companies, fuel cell manufacturers, the German Energy Agency and the National Organisation for Hydrogen and Fuel Cell Technology (NOW).

The compact BlueGen unit generated much interest among prospective customers and sales and development partners as well as State and Federal policy makers and media.

Pictures from the Hannover Fair are available at www.cfcl.com.au/CFCL_Events.

ENDS

More information:

·; RegModHarz project www.regmodharz.de/ (in German)

·; IBZ www.initiative-brennstoffzelle.de/ (in German)

·; Hannover Fair www.hannovermesse.de/home (German and English)

·; BlueGen www.bluegen.info (German and English)

·; Sanevo Blue Energy www.sanevo.de/bluegen/ (in German)

About Ceramic Fuel Cells Limited:

Ceramic Fuel Cells is a world leader in developing fuel cell technology to generate highly efficient and low-emission electricity from widely available natural gas. Ceramic Fuel Cells has sold its BlueGen gas-to-electricity generator to major utilities and other foundation customers in Germany, the United Kingdom, Switzerland, The Netherlands, Italy, Japan, Australia, and the USA. Ceramic Fuel Cells is also 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.

The company is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU).

www.cfcl.com.au