Two of the UK's biggest energy companies, British Gas and E.ON, have expressed increased interest in combined heat and power (CHP) generators, signing deals designed to accelerate widespread adoption of the carbon-saving technology.

British Gas parent Centrica today announced it is to pay £20m for around a 10 per cent stake in fuel cell-powered CHP specialist Ceres Power.

Under the terms of the agreement, which is subject to shareholder approval, Centrica has also pledged to invest an extra £5m to fund a commercial launch of Ceres' CHP generators and agreed to buy at least 37,500 units over four years. The company claims that its fuel cell-powered boilers – which generate both heat and electricity for the home – could cut household carbon emissions by up to 50 per cent.

The announcement comes a day after E.ON said it has signed a deal with Energetix Group to trial micro CHP units in UK homes. Under the agreement E.ON will fund the testing and evaluation of a Genlec micro-CHP system, which the company hopes could emerge as the first lightweight wall-mounted CHP generator.

Charles Bradshaw-Smith, head of innovation at E.ON, said the system was one of a number of micro-generation technologies that the energy giant is investigating that could deliver significant energy and carbon savings to domestic customers.

The deal follows hot on the heels of E.ON's alliance last month with EC Power that will see the energy supplier offer EC Power's CHP generators to business and public sector customers.

CHP generators are capable of capturing and reusing the waste heat emitted by electricity generation technologies, and have been widely touted as a major source of carbon savings. A recent Carbon Trust study assessing over 80 different micro-CHP installations found that carbon emissions were typically cut by between 15 and 20 per cent when used in commercial properties.