Ceres Power says fuel cell boiler trials delayed

LONDON, July 2 (Reuters) - British alternative energy company Ceres Power (CWR.L) said trials for its "green" fuel cell boiler have been delayed and it will not be on the mass market until mid 2012, a year later than first planned.

Ceres Power is working with British Gas (CNA.L), Calor Gas and Dutch company Daalderop to provide an energy efficient boiler which produces heat and electricity using methane gas.

The company said in a statement that systems engineering problems related to hardware and software changes meant the wall-mounted product would not reach the mass market until mid-2012, at least six months later than initially scheduled.

Field trials of the product in people's homes have also been delayed by three months because the company said it needed more time to make changes necessary in order to obtain a safety certificate.

"The installation of (combined heat and power) units in occupied homes for commercial field trials is now expected in Q4 2010 to enable completion of the required engineering design changes and CE marking certification," the statement said.

Ceres Power added it was working with British Gas for "an accelerated volume ramp-up" within six months of its revised mid-2012 product launch date.

Shares in Ceres Power, which have fallen sharply this year after a previous trial delay was announced in March, were down 4 percent at 72 pence at 0853 GMT.

Broker Evolution said the statement would not help market confidence, although it was reassuring that the problems were related to software issues rather than the fuel cell hardware.

KBC Peel Hunt reduced its target share price to 65 pence and gave a 'hold' recommendation on the stock.

"We think customers will demand more, hence we think that the volume ramp-up will start even more slowly than the new time line indicated," KBC Peel Hunt analyst Andrew Shepherd-Barron said in a note.