Part of Centrica’s agreement with ceres Power will involve the development of Combined Heat and Power Systems (CHP units).

The parent company of British Gas, Centrica, has announced that it will buy shares in Ceres Power, a fuel cell company, in a deal worth around £20 million.

As part of the agreement, British Gas will pay Ceres Power £5m to support their development of Combined Heat and Power systems (CHP units). These units will deliver cheap, low carbon electricity whilst acting in the same way as conventional boilers.

Sam Laidlaw, Centrica’s Chief Executive, said: “Fuel cell technology has the potential to transform the domestic heating market, enabling our customers to generate cheap, reliable and low-carbon electricity in their own homes. The Agreements with Ceres Power will help us deliver our strategy of investing in low carbon technology development.”

British Gas has the rights to market and sell the CHP units for four years – and it is anticipated that the units could equate to 30% of the boiler market by 2015.

Peter Bance, CEO of Ceres Power, commented: “The investment Centrica is making in our business reflects the success of our collaboration over the last two years and the confidence both companies have in Ceres Power’s fuel cell technology. We are delighted to continue our close relationship with British Gas and are excited about the prospect of taking our innovative CHP Product to market with the UK’s largest boiler installation company.”

Shareholders will decide whether to approve the deal on 1 February.