Now you can come home to real fuel-cell technology

The energy group Centrica will tomorrow announce a joint venture with AIM-listed Ceres Power to build the UK's first fuel-cell-powered mini boiler for domestic use.

The boiler, which will be marketed by Centrica's subsidiary British Gas, could cut households' energy bills by more than a third. It emits far less pollution than conventional boilers and can also generate electricity.

Executives hope to have the boiler, which will cost around £2,500, in the shops in three years' time.

Centrica will provide technical expertise to help Ceres Power use its fuel-cell technology to design and test the boiler. A few experimental large fuel-cell-powered boilers already exist for use in offices and tower blocks, but none has been designed to serve a single home.

Fuel cell technology is typically powered by hydrogen, but the boiler being developed by Ceres Power can also be run on natural gas. This means that households will be able to hook the boiler - which will be no bigger than conventional models - up to the domestic gas supply. Hydrogen is not yet readily available for domestic use.

Tomorrow's announcement is the first stage in the joint venture. Ceres Power says it has the necessary funding to develop the boiler, having raised £25m from private equity funds and its listing on AIM in November.

The boiler, which should take a year to design, uses "combined heat and power" technology. This means that the steam that is created when it generates electricity can also be used to heat the home, while any excess steam can be recycled to create more electricity. Excess electricity can also be sold on to the national grid.

The chairman of Ceres Power, Philip Holbeche, said: "It will save consumers money. It will also save the country a considerable amount of energy."

Soaring gas and electricity bills would encourage households to use more efficient boilers, he said. Domestic utility bills have increased by around a fifth over the past 18 months and are expected to rise further because of record oil and gas prices.