Ceres Power has signed an agreement with Bord Gáis Éireann (BGE) for residential CHP products operating on natural gas for the Irish market (including the Republic of Ireland and Northern Ireland). This marks the first international contract for Ceres Power outside mainland UK and forms part of the Group’s expansion plans into Europe.
The agreement with BGE builds upon Ceres Power’s existing natural gas CHP programme with British Gas, and will use the same core technology platform, allowing the Company to exploit economies of scale. Under the Agreement, Ceres and BGE aim to establish CHP as the low carbon residential energy system of choice for Ireland. There are more than 2.5 million homes in the island of Ireland and Bord Gáis Energy, the retail arm of Bord Gáis, is Ireland’s leading dual fuel energy supplier, selling natural gas and electricity to all market segments.
Under the terms of the Agreement, BGE will pay Ceres £1.6 million in milestone payments during the development and trialling of the CHP product, including an up-front payment of £1 million. In addition, BGE has agreed to place a call-off order for 16,000 CHP products in aggregate over a four-year period for the Irish market, conditional upon successful completion of the initial phase and agreement of standard commercial terms. Subject to BGE meeting minimum order volumes, Ceres has agreed to sell the CHP product to BGE for the Irish market on an exclusive basis for a four year period anticipated to begin in early 2012.
Ceres and BGE intend to maximise sales of the residential CHP product by addressing both the installed base of existing homes that would benefit from an upgrade, as well as the annual boiler replacement market.