EC Proposes New Cogeneration Guidelines
November 14, 2008 // Published as a news service by IHS
The guidelines indicate when guarantees of the origin of electricity can be issued and support schemes allowed. They also provide legal certainty to the energy market, thereby removing investment barriers.
Cogeneration is a highly efficient and environmentally friendly way of producing electricity and heat simultaneously. Cogeneration - or combined heat and power (CHP) - means using both the electricity and heat produced together, thus wasting less energy in production. These systems can also be installed close to users, reducing power transmission losses.
With cogeneration, the unused heat from energy production, which is often released into the environment as an unavoidable byproduct of traditional electricity production, is no longer wasted but used to provide heating locally - for example, for greenhouses, shopping centers or district heating systems. Cogeneration is flexible. It can use many types of fuel, such as coal, natural gas and renewable energy sources as well.
The EC sees the CHP directive (directive 2004/8/EC) as a significant tool in contributing to Europe's answers to the energy challenges. The member states and the EC are closely working to promote cogeneration.
Cogeneration takes the European Union (EU) closer to its energy-related goals. It is a proven tool to increase energy efficiency and to achieve energy savings targets. It contributes about 2% towards the 20% annual primary energy savings objective for 2020.
It reinforces the EU's efforts to fight climate change by reducing CO2 emissions (100 million tons of CO2 per year) and decreasing network losses. At the same time, it contributes to increasing competition in the electricity market. For these reasons, it is necessary to ensure and exploit the full potential of cogeneration throughout the EU.
To this end, after the adoption of the CHP directive in 2004, important steps have been taken to ease its full implementation throughout the EU, such as the determination of reference values and elaboration of detailed guidelines for the calculation of the electricity from CHP.
The EC will continue to monitor the process and will present further proposals, if appropriate, to foster cogeneration in close cooperation with EU member states. The production of CHP electricity in the EU amounted in 2006 to 366 terawatt hours, or 11% of the total electricity generation.
Increasing security of supply and promoting energy efficiency are the challenges of utmost importance for the EU. Combined heat and power generation is an important tool to meet them, meanwhile offering many other direct and indirect advantages for the European citizens.
Cogeneration means also decreased burden to the environment: less wasted heat, less CO2 emissions, less waste in electricity networks. The benefits in terms of energy savings from cogeneration are today estimated to be around 35 million tons of oil equivalent (MTOE) per annum in EU, equivalent to Austria's gross inland consumption.
Cogeneration is often seen as an initiative for industry. Nevertheless, along with technology developments in the past years on the so-called micro-CHP, cogeneration implies a higher level of security and flexibility on energy supply for households as well. For instance, producing electricity with micro-CHP installations in residential houses will result in lower energy bills.
Finally, a larger use of CHP technologies in industry and residential areas will increase competition in the electricity market and result in lower prices.
For more information, see the EC's web sites on Second Strategic Energy Review - Securing our Energy Future and on Energy Policy for a Competitive Europe.
Source: European Commission.