encouraging post from uk...

From a UK site. Very encouraging IMHO:

This is a long post courtesy of DonPedro......

After your post on the Ceres Power. I emailed the General Manager - Commercial. Here is his reply which came immediately they all came back from the Christmas vacation. There is also an enclosure he sent which adds more to the argument of who is the best. I still like the company and their attitude to investors:-

EMAIL. "We are often compared to Ceres Power because we are developing similar technology for a similar application and we are both AIM listed. I have attached a research note from our UK broker Nomura Code, which compares the two companies. Yes the Ceres technology operates at a slightly lower temperature than CFU's. We don't see that as a disadvantage for us: our higher temperature allows us to perform "direct internal reforming" which means much higher electrical efficiency. We have consistently achieved electrical efficiency of >55%, with a peak at 60% - far higher than any other technology of a similar size, including any other fuel cell. We have also demonstrated complete units in real world field trials since early 2006. We have clocked >130,000 hours of operating time from these units. We have a product development agreement with leading utility E.On in the UK (also known as Powergen). The E.On Group is the world's largest investor owned energy utility. We have deployed trial units and have an indicative forward order for commercial products. So we are certainly very well placed compared to Ceres. I'd also make the larger point that at this early stage it's actually a good thing for us to have other companies developing similar products: it's far easier to build market awareness, overcome any barriers, lobby Governments, and develop the industry, if there is more than one company pushing for fuel cells in small scale generators."

Having great trouble enclosing the PDF file they sent me but the front summary is:
Heat & power fuel cell update Volume production converging with new UK FIT Both Ceramic Fuel Cells and Ceres Power have made significant progress in the commercialisation of their CHP products since we published our last heat and power fuel cell update in July 2008. Furthermore, the market environment for Solid Oxide Fuel Cell based mCHP (micro-Combined Heat and Power) has improved significantly with UK committing to introduce feed-in tariffs (FIT) for m-CHP from April 2010.

However, with both companies yet to sell a volume manufactured product we again focus on the current state of development of each company, the development risks left, and the commercial strategy and timeline leading to revised forecasts for both companies. We retain our Buy recommendation for Ceramic Fuel Cells and Neutral on Ceres Power.

The UK is expected to introduce feed-in tariffs for m-CHP in April 2010. The tariffs offered have yet to be decided but as an electrical energy generation based incentive, it is expected to be generous for high electrical efficiency SOFC based m-CHP units such as those being developed by Ceramic Fuel Cells and Ceres Power. The current assumption is that exported energy will receive the same export tariff as other micro-generating technologies 0.05/kWh. This compares with Germany which offers 0.05/kWh as well as a capital subsidy. Ceramic Fuel Cells to sell its first commercial product from early CY10. Following the completion of its volume manufacturing facility in Germany and CE certification, expected in February 2010, we expect Ceramic Fuel Cells to begin commercial sales; we forecast sales of just over 200 BlueGen units in CY10. With a world beating 60% electrical efficiency we expect it to generate significant commercial interest and should encourage utilities and other partners to strengthen commitments with Ceramic Fuel Cells in order to secure access to future production and retain exclusivity.

The BlueGen co-generator also overcomes some of the barriers to entry associated with the m-CHP product, is suited to other wider global markets, and could be as significant as the integrated m-CHP boiler. With a pipeline of BlueGen opportunities already identified, we have raised our expectations for this product, but this is tempered by a reduction in m-CHP income as utility programs have been slower to progress than expected. We continue to forecast profitability in FY12 and with 14.2m cash and a burn of 2.3m, expected to reduce with commercial production, we believe that the next fund raising will be for new production lines and forecast this in FY12. We retain our Buy recommendation.

Ceres Power is behind schedule in its beta development as it now expects commercial field trials to begin in 1Q10, versus the original expectation 3Q09. In addition, the data presented showed the alpha unit did not quite achieve the go to market specification. These two key points highlight the challenges in turning a promising electrochemical cell technology into a commercial product that meets the key criteria of electrical efficiency, longevity and cost. Whilst these delays are generally expected in developing such groundbreaking technology, it draws into question the risks involved in trying to accelerate the product development process by trying to perform a number of tasks simultaneously; we believe that Ceres is more or less trying to perform the balance of plant development and optimisation, field trials, CHP boiler product development and manufacturing scale-up simultaneously. With profitability forecast in FY15, 23m cash, burn increasing to 11.5m, and 4.5m of capex in FY10, we expect Ceres to require further funding in FY11, FY12 and FY13.

Despite the product development challenges ahead, we retain our Neutral recommendation as we continue to believe in the long term potential of the Ceres Power technology. Nomura Code Securities Limited, London Cleantech Research. Unquote CFU: Buy (13p) CWR: Neutral (178p) UK / Equities Date 2 November 2009