Combined heat and power generation (CHP)

  

Cogeneration was first promoted at EU level in a Green Paper on security of energy supply published in November 2000. The paper argued that if the EU's share of cogeneration, which only accounted for 11% of total electricity production in the EU in 1998, were to be increased to 18% by 2010, the ensuing savings could amount to 3-4% of total gross consumption in the EU 15.

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Overview

Cogeneration was first promoted at EU level in a Green Paper on security of energy supply published in November 2000. The paper argued that if the EU's share of cogeneration, which only accounted for 11% of total electricity production in the EU in 1998, were to be increased to 18% by 2010, the ensuing savings could amount to 3-4% of total gross consumption in the EU 15.

In February 2004, the EU adopted the CHP Directive to promote cogeneration in the EU by addressing several problems, including lack of awareness, unclear provisions related to electricity network access, inadequate support from local and regional authorities, disparate rules for qualifying CHP as highly efficient. Most notably, this directive, repealed since the entry into force of the Energy Efficiency Directive 2012/27/EU, established a common and harmonized methodology for calculating the efficiency of cogeneration plants and requires member states to carry out an analysis of their national cogeneration potentials. According to EU legislation, support can only be granted to cogeneration plants that save at least 10% of primary energy fuel compared to separated means of heat and electricity production, those cogeneration plants are then labeled as high efficiency cogeneration plants.

Few years later, the EU's 2006 Action Plan on 'Energy Efficiency for 2007-2012' proposed further measures to promote cogeneration in the future, acknowledging that it accounted for only 13% of EU electricity consumption in 2006 (see EurActiv LinksDossier).

The technology was once again put on the table on 13 November 2008, when the Commission launched its Second Strategic Energy Review. As implementation of the Cogeneration Directive had progressed more slowly than expected, the EU executive asked member states to further work on removing barriers and facilitating electricity grid access.

In 2011, the EC adopted the ‘Energy Efficiency Plan 2011’ aimed at exploring the most effective measures to close the gap to reaching the 20% energy efficiency target by 2020. CHP is mentioned as one of the sectors that can deliver up to 15-20 Mtoe/year of primary energy savings and 35-50Mt/year of CO2 emissions reductions, based on an additional economic potential of around 350 TWh electricity output from cogeneration.

To ensure that this potential is met, the Energy Efficiency Directive (EED) adopted in 2012 addresses CHP in Article 14 ‘Promotion of efficiency in heating and cooling’ and Article 15 ‘Energy transformation, transmission and distribution’. The EED can be viewed as a small step ahead compared to the first CHP Directive, nevertheless member states are required to take clear actions in promoting CHP wherever it makes an economic sense for developers. However, each capital holds the key to a good and progressive implementation of the CHP related provisions contained in the EED.

The EED includes the following measures supporting the development of cogeneration:

  • Comprehensive assessments of CHP potential by the end of 2015 need to be carried out, with requirements to take action in promoting CHP;
  • High efficiency CHP gets guaranteed transmission and distribution, priority or guaranteed access to the grid and priority of dispatch. However, when ranking different types of generators, CHP cannot take priority over variable RES-E, but it can be on a parity level;
  • Positive provisions on micro-CHP;
  • Opportunities at national level for supply-side energy efficiency measures to count toward the achievement of Article 7 energy savings obligation on end-users.
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