Shares in Ceres Power plc (LON:CWR) revved up more than 11% after the fuel cell group (LON:CWR) won a deal to develop systems to power data centres.
The stock rose 1.05p to 10.25p after Ceres said it would develop fuel cells for the centres under sub-contract to US power engineer Cummins Inc (NYSE:CMI).
Cummins has landed a US Department of Energy (DoE) funding award to develop the technology.
It will benefit from up to US$2.6mln of the total award. The total project value including contributions from Cummins, the US DoE and other parties will be US$4.9mln subject to final contract.
The contract represents a new market for Ceres, which is already developing cells for use in cars and homes.
The company will initially target data centres but says the technology could be adapted for other commercial uses.
It should help operators of the centres, which consume nearly 2% of the world's electrical power, to cut overall costs by more than a fifth and reduce carbon emissions by up to 49%.
Ceres chief executive Phil Caldwell said: “This is a very exciting opportunity for Ceres to work with Cummins and the US DoE to address the rapidly growing market for cleaner distributed power for data centres and other commercial applications.
“It strengthens our relationships in North America, a key market.”
Ceres’s SteelCell technology uses a perforated sheet of steel with a special ceramic layer that converts fuel directly into electricity.
It uses mains gas, which means it can be mass produced at an affordable price for domestic and business use. Going forward, the technology could use biogas or hydrogen, making it more flexible.
The company has already formed partnerships with Japanese car makers Nissan and Honda to develop fuel cells for electric cars.
Now Ceres is working on a larger five-kilowatt solid oxide fuel cell system for uses needing up to 100 kilowatts of power.
Caldwell said: “We’ve made the technological progress and this year has been about getting the partners in.
"We're very much on track. We have a healthy pipeline of partners and a lot of commercial interest in this technology.
"We're actually doing what we said we would do which is to execute against our strategy."