european potential for cogeneration

7/29/2019 European Potential for Cogeneration

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1


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MemberStatereportingunderthe

CogenerationDirective includingcogeneration

potentialsreporting

CODEprojectreportEuropeanSummary

www.codeproject.eu

December2009


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Tableofcontents

Tableofcontents.......................................................................................................................................... 3

CODEproject................................................................................................................................................. 5

Executivesummary....................................................................................................................................... 6

1.StatusoftranspositionoftheCogenerationDirective2004/08/ECintoMemberStatelawinthe

EuropeanUnion............................................................................................................................................ 7

2.StatusofimplementationoftheCogenerationDirectivebyEUMemberStatesconcerninganalysis,

structuresandreporting............................................................................................................................. 10

3.StatusofMemberStatereportingundertheCogenerationDirective................................................... 12

3.1NationalPotentialstudiesoncogeneration..................................................................................... 13

3.2OverviewofReportingofNationalPotentialsforcogeneration...................................................... 13

3.3AnalysingthereportsforaEuropeanoverview............................................................................... 14

3.4EuropeanCogenerationeconomicpotentialin2020....................................................................... 15

3.5EuropeanCogenerationtechnicalpotentialin2020........................................................................ 18

4.MemberStatesprogressinidentifyingbarrierstothegreaterpromotionofcogenerationintheEU.21

4.1Barrierstogrowthofcogeneration:financialbarrierstocogenerationdevelopment.................... 21

4.2Barrierstogrowthofcogeneration:administrativeandproceduralbarrierstocogeneration

development........................................................................................................................................... 23

4.3Barrierstogrowthofcogeneration:general.................................................................................... 24

4.4CODEprojectteamandregionalmeetingcomments...................................................................... 24

5.Member

States

progress

in

reviewing

support

mechanisms

for

the

promotion

of

cogeneration

.........

28

6.MemberStatesprogressinestablishingasystemofguaranteesoforiginforelectricityfromhigh

efficiencycogeneration............................................................................................................................... 30

7.Conclusionsandrecommendations........................................................................................................ 31

7.1Recommendations............................................................................................................................ 31

7.2Observations..................................................................................................................................... 32


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Annex1:EuropeanCommissionguidelinesonnationalcogenerationpotentialsestimationandreporting

.................................................................................................................................................................... 33

Annex2:

Calculation

methodologies

for

CODE

project

(conversions

and

interpolations)

.........................

34

Annex3:StatusofimplementationofGuaranteeofOriginsschemesintheEU(December2009)..........36

Annex4:RegionalreportsonMemberStatereportingundertheCogenerationDirective...................... 38


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CODEprojectTheCogenerationDirectiveThe Cogeneration Directive 2004/08/EC outlines an enabling policy framework for the

EuropeanUnion toexpand thedeploymentofcogeneration inMemberStates.TheDirective

waspassedbytheEuropeanParliamentin2004andencouragestheuseofcogenerationinthe

productionofheatandpowerasasuccessfulandwelldevelopedtechniquedeliveringprimary

energysavings.Thebackgroundpolicyobjectives in2004weresecurityofsupplyandenergy

savings. The climate agendawhich has grown in importance since 2004 has added further

impetus to the wider use of cogeneration. Cogeneration is a highly energy efficient,

technologicallymature

approach

to

generating

electricity

and

providing

useful

heat.

It

is

akey

enablerforimprovingtheefficiencyofelectricityproductionfromfossilfuels.

Oneof themain achievementsof theCogenerationDirectivehasbeen to codify forEurope

what is meant by high efficiency cogeneration. Any plant now carrying this status will in

operation saveaminimumof10%primaryenergycompared to separateproductionofheat

andelectricitybasedon the same fuel.Using the frameworkof theCogenerationDirective,

promoting cogeneration to meet additional electricity needs gives a Member State a

quantifiableprimaryenergysavingperunitofelectricitygenerated.

TheCODEprojectTheCODEprojectwasestablishedinOctober2008byCOGENEuropeundertheEUsIntelligent

EnergyEurope(IEE)programme.TheobjectivesofCODEaretohavestakeholdersinthesector

independently monitor the implementation of the Cogeneration Directive and to use

stakeholderinputtoassesstheprogressbeingachievedthroughMemberStateinitiatives.The

projectrunsuntil2011andwillreportinsequenceon1)theidentifiedEuropeanpotentialfor

cogeneration; 2) the barriers and supportmechanisms for cogeneration existing across the

MemberStates;3)bestpractiseandprogress inMemberStates;and4)adraftCHProadmap

forEurope.


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ExecutivesummaryThe guaranteed energy savingwithin the framework of theDirectivemakes cogeneration a

uniquely quantifiable energy savingmeasure forMember States striving to improve overall

energyefficiencyandreduceCO2emissions.

Considering the current state of transcription of the Directive and its final translation into

memberstatelawtheCODEteamconsiderstheimplementationofthedirectivetohavebeen

slow.

ReportingundertheDirectiveisincompleteparticularlyintheareaofGuaranteesofOrigin.

The23memberstatessofartoreportontheirnationalpotentialforcogenerationhave,used

bothbottom

up

and

top

down

approaches

to

identify

an

additional

122GWe1

of

potential

CHP

capacity in Europe.Associatedwith this electricity generation is1,000 TWh /annumofheat

meetingheatdemand in a rangeof applications acrossdomestic, commercial and industrial

sectors2.Mostmember states can increase theirCHP capacityby aminimumof 50% and a

doublingofthetodaysinstalledcapacityisdescribedaseconomicpotential.

ThememberstateswhohavereportedonBarrierstothewideruseofCHPhaveidentifiedthat

significantbarriersexist.Economic,administrativeandprocedural issues includingconnection

tothegridhavebeenspecificallyhighlighted.Majortechnicalbarriersdonotappeartoexist.

Regionalmeetings of stakeholders have in general supported the reporting of themember

stateswhilefocusingadditionalattentiononimmediatebarriersandgivingadditionaldetailon

thebarriershighlighted.

1ThisfigureisheavilyinfluencedbytheveryhighpotentialreportedinGermany.TheGermanpotentialestimateis

dependentona very large expansion indistrictheatingand financebeing available to thepublic sector at5%

return.2CODEproject team suggest that the effortsmadebyMemberStates in assessing thepotential are generally

competent and thatwith only a few exceptions shouldbe accepted as sufficiently good to actas the basisof

energyplanning.


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1. Status of transposition of the Cogeneration Directive 2004/08/ECintoMemberStatelawintheEuropeanUnionWithafewexceptionslistedbelow,theEUMemberStateshaveconfirmedtranspositionofthe

Cogeneration Directive into national law. The exceptions listed by the Commission are:

Portugal, Slovakia, Finland and theUnited Kingdom.A reasoned opinion on the absence of

proper reportingon the transposition statuswas sent to theseMemberStates inNovember

2009 giving two months to the Member States to respond. Table 1 gives the European

Commissionsstatusontranspositionat1December2009.

Table1StatusoftranspositionofCogenerationDirectiveFrom stakeholder discussions at CODE Regional Workshops it is clear that parliamentary

approvalof thetranspositionintoanationallawdoesnotnecessarilymeanthattheprovisions

of the Directive are fully implemented or active in thatMember State. There is frequently

complexityinthedetailofimplementationintonationallawfollowingtheformaladoptionand

onlywhenthefullprocessiscompletedcanthetranspositionbesaidtobecomplete.


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InItalyforexample:

LegislativeDecree20/07createsnewprovisionsforthefuturedispositionsforthecogeneration

development,according

to

the

Cogeneration

Directive:

possibility to have access towhite certificatesfor all the highefficiency cogenerationplantsandgradualextensiontotherightofwhitecertificatesaccessalsotoplayersthat

are differentfrom the current ones, referring to criteriafixed in thefuture Ministry

Decree(art.6,points15);

possibilityfor theAuthority to consider specialoperative conditionsforhighefficiencycogenerationplantswhenitwilldefinechargesrelatedtotransmissionanddistribution

cost(art.7,point4);

simplification of administrativeproceduresfor the authorisationfor construction andmanagementofcogenerationplants,especiallyregardingsmallandmicrocogeneration

units(art.8).

Thefirstandthirdbulletpointsabovewhitecertificatesupportschemesforcogenerationand

simplifiedadministrativeproceduresareatDecember2009stillwaitingforaspecialMinistry

Decree that could implement these. So, while the Cogeneration Directive is formally

implementedinItaly,forthetimebeing,thestatusofcogenerationinItalyisleftinavacuum,

whilethegovernmentalignstheframeworkconditionsforcogenerationwiththeprovisionsof

theCogenerationDirective.

InGreece:theCogenerationLaw3734of2009hasbeenadoptedbytheparliament.Article7,Para4ofthis

law states that in order to safeguard the transmission and the distribution of electricity

producedfromhigh efficiency cogeneration, theprovisionsof theGrid andMarketCodeare

appliedincludingthenecessaryamendmentsoftheCodeinordertoensuretheparticipationof

thecogenerationunits intheGreekelectricitymarket.TheGridCodewhenfirstpublishedfor

consultationmade no reference to cogenerationatall. Several stakeholder approaches have

beenlaunchedtocorrectthis.To varying degrees the CODE project team has been notified of existing gaps in the

implementation of the Cogeneration Directive through the absence of secondary or other

legislationspecifically in Hungary,Latvia,Lithuania, Italy,Greece,France,Romania,Germany,

Netherlands,Malta,Luxembourg. Thetranspositionand implementationoftheDirectivehas

beenslow.Due to the lackofprogress inseveralMemberStates it isquitepossible that full

implementationatnationallevelwillnotbeconcludedinallMemberStatesuntillatein2010:


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sixyearsaftertheacceptanceofthelegislationbytheEuropeanParliament.Fordetailsofthe

implementationseeindividualregionalreports(Annexes4.1,4.2,4.3and4.4).


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2. Status of implementation of the Cogeneration Directive by EUMemberStatesconcerninganalysis,structuresandreportingUnder the Cogeneration Directive the Member States are asked to assess their national

potential for cogeneration and to carry out various enabling assessments (barriers support

mechanisms verification throughGuaranteesofOrigin) and thenupdate theCommissionon

progress towards achieving the potential. The Directive uses a reporting and self analysis

mechanismintendedtodrivecontinuousimprovementtowardsahigherlevelofcogeneration

intheeconomy.

MemberStateswererequiredtoproducethefollowingreports

Analysisofthenationalpotentialforcogeneration(21/02/2006) Reviewofbarrierstothewideruseofcogeneration(21/02/2006) Reviewofthesupportmechanismsforcogeneration(21/02/2006) ProgressReportonCogenerationDirective(21/02/2007)

Apart from the Progress Report which was requested by the European Commission in a

modified questionnaire format,Member Stateswere left free to choose the format of the

reportswith

the

content

guided

by

the

Directive

and

its

Annexes.

As

aresult

the

Member

States

reportsvaryconsiderablyindepthandcontent.

In general reporting byMember States under the Directive has been slow and is still not

complete as can be seen in the table 2 below.Only 12Member States have completed all

reportingundertheDirectivemorethantwoyearsbeyondthelastdeadline.AllMemberStates

should have delivered a report on the national potential for cogeneration to the European

Commission by the 21st of February 2007. At the time of writing there are 23 National

PotentialsStudies in thepublicdomain, coveringover80%ofEuropes current cogenerating

capacity.

Likewise,inreportingonbarrierstothewiderdeploymentofcogenerationandonthecreation

of a scheme for guarantees of origin, there are still reportsmissing fromMember States.

Luxembourg,HungaryandPortugalhavenotyetreportedonbarriersandeightMemberStates

havenot reportedon their scheme for guaranteesoforigin (CzechRepublic, Spain,Greece,


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Ireland, Cyprus, Luxembourg, Hungary and Portugal) although both the Czech Republic and

EstoniaappearinpractisetohaveoperationalGoOsystems.

Discussion

ThereportingmechanismoftheDirectivewasforeseenasboththestickandthecarrotofthis

legislation. Knowing the economic and social benefits of improving energy efficiency in the

generationofelectricity, itwas foreseen thatMemberStateswouldmove rationally towards

promoting investment in cogeneration propelled by the logic of the reporting process:

potentials, barriers and support mechanisms. However, few Member States have moved

quickly3 to implement theDirective,or follow throughthereportingsteps.Legalproceedings

againstdefaultingMemberStateswerestartedbytheCommissioninMay2009.

3GermanyandtheCzechRepublicstandoutasMemberStateswhichfullyembracedandmovedforwardonthe

Directive.


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3.StatusofMemberStatereportingundertheCogenerationDirectiveUnder the CogenerationDirective the 27Member States are asked to assess their national

potentialforcogeneration,reviewbarrierstoimplementingthispotentialandthenupdatethe

Repo rting obligations of Coge neration D irective 2004/08/EC(situation up to 05/10/2009)

M S

Progress R eportAn alysis of National

Potential

Barriers for CHP /adm inistrative

procedu ral situation

Guarantees ofO rigin Scheme

[Art 10(2) Art6(3)]

[Art 10(1) Art6(1)]

[Art 10(1) Art9(1&2)]

[Art 10(1) Art 5(3)]

due on 21/02/2007and then each 4

years

du e on 21/02/2006 due on 21/02/2006

due on 2 1/06/2007 (6months after

adoption of

harmonizedreference values

CommissionDecision

2007/74/EC of

21/12/2006

B E received r eceived received received

B G received r eceived received received

CZ received not received not received not received

DK received r eceived received received DE received r eceived received received

E E received r eceived received received

IE not received r eceived received not receivedE L received r eceived received not received

ES received r eceived received not received

F R received not received received received IT w aiting for

translationreceived w aiting for

translationreceived

C Y received r eceived received not received

LV received w aiting for

translation

w aiting for

translation

w aiting for

translationL T received not received w aiting for

translation

w aiting for

translation

LU not received w aiting for

translation

not received not received

HU not received not received not received not received

M T received r eceived received received

NL received r eceived received received

AT received r eceived received received

PL received r eceived received received

PT not received not received not received not receivedRO received r eceived received received

S I received r eceived received received

S K received r eceived received received

FI received r eceived received received

SE w aiting fortranslation

w aiting fortranslation



UK received r eceived received received

Table2StatusofreportingobligationsoftheEUMemberStates


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Commission on the progress towards achieving this potential. This is foreseen as a self

motivatedprocessofcontinuous improvement towardsahigher levelofcogeneration in the

economyand

an

increased

primary

energy

use

efficiency

and

energy

savings.

Reporting byMember States under theDirectivehasbeen slow4with 21 reports still tobe

submittedalthoughthedeadlinesforsubmittingreportsfellin2006and2007(Table2).

AllMemberStatesshouldhavedeliveredareportonthenationalpotentialforcogenerationto

theEuropeanCommissionby the21stofFebruary2007.At the timeofwriting thereare23

National Potentials studies in the public domain, although one of these from the Czech

Republic hasnotbeenofficiallyreceivedbytheCommission.Thesereportscoverover80%of

existingcogeneration

capacity

in

Europe,

and

are

the

focus

of

this

report.

At

December

2009

fourMemberStates(France,Hungary,PortugalandLatvia)havemadenosubmissionatallon

national cogenerationpotentials. Themissing potential studies of France,Hungary, Portugal

andLatviarepresentanadditionalpotentialtothenumberspresentedhere.

3.1NationalPotentialstudiesoncogenerationMemberStatesareasked to reporton thenationalpotential forcogeneration in2010,2015

and 2020. Starting from an assessment of heat demand over the period to 2020,Member

States are asked to investigate different types of application and economic sectors where

cogenerationisapplicableandthroughthisbuildapictureofthetechnicalpotentiali.e.how

muchheatandelectricitycouldbesuppliedthroughcogenerationintheabsenceofanyother

constraints.Fromthistechnicalpotentialaneconomicpotentialisdeducedusingassumptions

about theenergymarket,availabilityofsupport, required rateof return,etc.MemberStates

have considerable freedom5 in how they evaluate both the technical and the economic

potentialsalthoughtheCommissiondidissueguidelineswhichgiveabasicframeworkofpoints

toconsider(Annex1)

3.2Overview

of

Reporting

of

National

Potentials

for

cogeneration

In assessing the national potentials reports, the CODE project has looked for appropriate,

thorough and transparent analysis which follows the guidelines laid out in the Directive.

4 The Commission started legal proceedings againstMember States for noncompliance of the Cogeneration

Directive in May 2009, and these Member States are now following the appropriate process to achieve

compliance.5 Thedegree of freedom in the reporting has led to a large variety in reporting formats and approaches. The

different choices ofMember States in units of reporting and choice of base year have been overcome in the

reportingbyusingreasonableassumptionsconsistently.


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MemberStateshavetakendifferentapproachesandusedadifferingdegreeofdetailaccording

to the information that is available. From the content of the reports it is clear thatmost

MemberStates

have

gathered

appropriate

data,

used

reasonable

modelling

techniques

and

made clear their assumptions in their assessments.Goodexamplesof reporting (butnot an

exhaustivelist)areSlovakia,GermanyandSpain.

However,someMemberStateshavereportedonlygeneralassumptionsandquotedonlythe

mainresultsofworkwhichisnotpubliclyavailable.Anassessmentonqualityandlevelofdetail

oftheanalysisisnotpossible.AfewMemberStateshavepresenteddata,extrapolatingfroma

few specific cases,but carriedoutonly very limited analysis: this seems to fall shortof the

objective.Severalmemberstatesreportdifficultiesisassessingthefollowing:

microCHP:poorlydefinedeconomicand technicalcapabilityasyetmakesmicroCHPdifficulttoincludeinanalysis;

coolingpotential:dataoncoolingrequirementsisnotavailableinmanyMemberStatesandthereislittleavailableproductonwhichtobaseaneconomicassessment;

bioenergyanduseofwastematerialsforenergyproduction.Theseareallareaswherelittlepriorworkhasbeencarriedoutandwherelittledatacurrently

exists.SeveralMemberStateshavethereforestoppedshortoffullyexploringthispotential.

3.3Analysing

the

reports

for

a

European

overview

The absence of a standard reporting format for potential studies presents a number of

challengeswhenanalysingthereports.Specificdifficulties lieinthelackofaconsistentsetof

units,orsectoralanalysisapproach.Ascogenerationpotentialisdependentonidentifyingheat

demandwhichcanhostelectricitygeneration,manybutnotallMemberStateschosetoreport

potential in total heat energy delivered with additional information on electrical energy/

installed generating capacity. Some Member States followed the sectors outlined in the

CogenerationDirectivebasingtheiranalysisonthegeneratingcapacityofplants,whileothers

chosetotakeaneconomicsectorbasedapproachandlookedatenduseinindustry,servicesor

districtheating.

Several

Member

States

based

their

reports

around

different

reporting

periods

tothoseproposedbytheCommission.

AssessingtotaleconomicpotentialattheEuropeanlevelisalsodifficultasMemberStateshave

not always made their basic scenario assumptions, their economic assumptions or their

assessmentmethodsexplicit.AsaresulttheCODEprojecthashadto interpolatetoacertain

extent from thepublisheddata togivea firstoverallpicture.However,where thishasbeen


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done we have chosen a conservative approach and used a single consistent conversion

approachfortheinterpolation(seeAnnex2).

3.4EuropeanCogenerationeconomicpotentialin2020Estimatesofeconomicpotentialarederiveddirectlyfromanexplicittechnicalpotentialorare

simplydeclaredasthepotentialwithoutclarificationofthetechnicalpotential.Itwasdifficult

toextracttheinformationonpotentialfromanumberofMemberStatesreports:

Someresultstendedtobeheavilyqualifiedandnottabulatedbutincludedintext; SomeMember States gave awide range of potentials dependent on real or futurevariables rather than a single value, in this instancewe chose the lower end of the

range;

Some Member States reported in terms of TWh of electrical output rather thancapacity,inthisinstancewemadeanestimateofcapacityfromtheoutputfigure;

Theabsenceof full language translationofsomeMemberStates reportsuntil late intheanalysisperiodprovedtobeachallengewhichleavestheriskthatsomenuancesof

thedatahavebeenmissed.

DifferentapproachesandassumptionshavebeenusedbyMemberStateswhenitcomestothe

economic potential. Several factors of economic and the perceivedmarket effectiveness of

cogenerationplantshavebeenusedwithagiven internal rateof returnon investment (IRR)

levelbeing

apopular

hurdle.

Required

operating

hours

and

assumed

levels

of

policy

support

are

alsousedasscreeningmethods,asareassumptionson implementationfeasibility inMember

States.Inmostcasestheexistingeconomicsupportmechanismshavebeentakenintoaccount.

Whereboth technicalandeconomicpotentialareexplicit,economicpotential is significantly

lowerthantheevaluatedtechnicalpotentialintheMemberState.SomeMemberStateshave

chosennot togivea singlepotentialestimatebuthave rathermodelled thepotentialunder

different scenarios, reflecting for example the effect of different carbon prices and support

schemes.


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0

10

20

30

40

50

60

70

80

90

100

Germ

any

Unite

dKi

ngdo

m

Pola

nd Italy

Spain

Swed

en

Bulg

aria

Austria

CzechRe

public

Romania

Finlan

d

Belgiu

m

Gree

ce

Irela

nd

Slov

akRep

ublic

Lith

uania

Slov

enia

Denm

ark

Latvia

Cyprus

Esto

nia

Portu

gal

Fran

ce

Hung

ary

Malta

Neth

erla

nds

CHPcapacity[GWel]

Existing instal led CHP capacity Additional economic potential 2020

Figure1:Existinginstalledcogenerationcapacityandreportedadditionaleconomicpotentialintheyear2020

ThereportedEuropeaneconomicpotentialforcogenerationisshowninGWeinstalledcapacity

infigure

1above.

This

capacity

would

provide

by

2020

atotal

contribution

to

Europes

energy

flowsof455TWhofelectricalenergyandat least1,000TWhofusefulheat supply froman

estimated122GWeofgeneratingcapacity.Thisrepresentsaminimum6primaryenergysaving

of46TWhandavalueofCO2avoidedof$0.8billionEurosatapriceofcarbonof39Eurosper

ton(20.5milliontonnesofCO2).

Theevaluationprocess fordeterminingeconomicpotentialvarieswidelyacross reports,and

thefollowingobservationsapply:

ThejudgementastowhatiseconomicornotisheavilydependentontheMemberStateassumptions

and

on

the

assumed

rate

of

return

chosen

by

the

Member

State.

For

example the UK report identifies that an economic rate of return for a commercial

enterprise is15%whileforapublicsector investment9% isacceptable. Inmakingthis

decisionallinvestmentsindistrictheatingarejudgeduneconomic.Germanyhasbased

6 The lower energy saving is based on theminimum value of primary energy saving under the Cogeneration

Directiveof 10%.Modern cogenerationplant as reported byDenmark in their potentials report is saving 25%

primaryenergyequatingtoatotalof115TWh.


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itsreportonafeasibilityanalysisusinganannualinterestrateof8%inthecommercial

sectorand5%forthepublicsector;

The

economic

effectiveness

of

the

cogeneration

potential

for

small

scale

(and

micro)

units in the servicesandhousehold sectors is stillbelowwidermarketapplication (in

newEUMemberStatesforexampleonaverageonly5%ofevaluatedtechnicalpotential

istreatedaseconomicpotentialinsomeMemberStates).Regionalobservations:

There issignificantunexploited industrialheatpotentialforcogeneration inEurope. Inthelargereconomiesthismakesuparound50%ofthepotential;

7

InsouthernpartsofEurope,the industrialpotentialandtertiarysectorheatpotentialhave been stressed over the district heating potential. The cooling potential is also

stressed;

Significant potential exists in new Member States particularly for refurbishment ofdistrict heating schemes and their upgrade to includemodern cogeneration (where

currently only heat is distributed). This is universally the casewhere a large district

heatinginfrastructurealreadyexists;

InmanynewMemberStatesthehighestshareofeconomicpotential intheevaluatedtechnicalpotentialislinkedtothemodernisationandupgradeofcogenerationunitsin

districtheatingsystems,withthereplacementofexistingsteamturbinesbycombined

cycle

units

running

on

natural

gas;

There is a definite trend to extrapolate the future opportunity from known pastsuccesses.Henceincountrieswhichhaveastronghistoryofdistrictheatingandalesser

experience in industry, thepotential is seen verymuch inexpandingdistrictheating,

with less opportunity in moving more cogeneration into industry to be based on

industrial heat. In countries such as theUnited Kingdomwhere there is a history of

industrial cogeneration and virtuallynodistrictheating, the additionalpotential is all

seenasbeinginindustryandsmallcommercialdevelopments.InGermanywhichhasa

strongtraditioninbothsegments,bothsegmentsareseenaspotentialforexpansion;

Germanyreportsaverylargeeconomicpotential.TwofactorsintheviewoftheCODEprojectteamhavecreatedthisresult:

1.Alongtermenergystrategybasedonrenewablesandenergyefficiency,linked

toastrongcommitmenttomeetingKyotogoals.Thisproducesahighmotivation

tofindenergyefficientsolutionsforthesupplyofbothheatandelectricity;and

7DploystudyonindustrialCHPin4majorindustrysectorswww.dploy.eu


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2. A tradition of both industrial process and district heating schemes using

cogeneration. This produces a strong technical, social and economic

understandingof

the

potential

of

cogeneration

to

improve

energy

efficiency

and

allowsarobustandselfconfidentanalysisofthepotential.

3.5EuropeanCogenerationtechnicalpotentialin2020Only14MemberStateshavereportedatechnicalpotentialalthougheveryMemberStatemust

havemadethisassessmentasafirststeptoassessingeconomicpotential.Thereportedfigures,

comparedtocurrentinstalledcapacityareshowninfigure2below.

Figure2ComparisonoftheMemberStateidentifiedtechnicalpotential(additional)comparedwiththeexistinginstalledcapacity.

There is no simple ordirect relationship between the identified technical potential and the

existinginstalledcapacity.Eightofthe14MemberStateshaveidentifiedthetechnicalcapacity

astwiceaslargeormorethantheinstalledcapacity.


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TheMember States technical potentials are based on the analysis of current cogeneration

status with projections of future heat and electricity demand. The level of detail and

approachesin

considering

sectors

and

sizes/technologies/energy

sources

of

cogeneration

units

varies but themajority of analyses are based on a segmentation approach, i.e. bottom up.

When theMember States evaluated technical potential against their economic criteria, the

economicpotentialemergedasinfigure3below.

0

5

10

15

20

25

30

CzechRe

public

Spain

Pola

nd

Slov

akia

Austria

Bulg

aria

Denm

ark

Romania

Greece

Ireland

Slov

enia

Lith

uania

Latvia

Esto

nia

CHPcapacity[GWel]

Addi tional technical potential 2020 Addi tional economic potential 2020

Figure3Reportedadditionaltechnicalandeconomicalpotentialofcogenerationelectricalcapacityby14MemberStatesintheyear2020

Again there isnosimpleordirectrelationshipbetween the identifiedtechnicalpotentialand

the economic potential. The technical potential has not always been clearly stated in each

MemberStatereportandthereisalowlevelofreportingoftechnicalpotentialingeneral.

WhereaMemberStatehasclearlyandunambiguouslyidentifiedatechnicalpotential:

Thereisalackofbackgroundinrelationtomethodologiestodeterminetheaboveandoften the Member State has used existing potential studies as the basis of the

compliancedocumentationforarticles6and11andnotundertakenbespokeresearch

tofulfiltheserequirementsofthesearticles;

ThoseMemberStates thathave commissionedbespoke research for thepurposesofidentifyingnationalpotentialsforcogenerationhavemainlyusedatopdownapproach;

Wheretechnicalpotentialhasbeen identifiedseparately,awiderangeofsectorshavebeenhighlighted;


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Potential isseenacrossthe fullcapacitysizerangesofcogeneration installationsfrommicrotoverylargescale;

In

general

very

little

focus

has

been

put

on

the

potential

associated

with

micro

CHP,

coolingorbioenergy,andtheseremainapotentialupsidetothepublishedfigures.


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4. Member States progress in identifying barriers to the greaterpromotionofcogenerationintheEUThreeMemberStateshavenotreportedonbarrierstothepromotionofcogenerationintheir

territory (Luxembourg,Hungary and Portugal). The following summary is for thoseMember

Stateswhohave reported.Across the full24MemberStateswhohave reportedonbarriers,

severalsignificantbarriersare identified.Thecommonthemesareaddressedbelowwhilethe

detailcanbefoundinthefourCODERegionalReports(SeeAnnexes4.1,4.2,4.3and4.4).

Asmightbe expected theMember Stateswith ahighpenetrationof cogeneration (Finland,

Denmark)report

in

their

heat

and

electricity

sectors

proportionally

less

barriers

to

do

with

administrationorgridconnection.Finlandassertsminorbarriersforexpandingcogeneration

overall,while inDenmarks report, regulatory and administrative barriers are not cited and

barriersingeneralarefewinnumber.Therearealargenumberofdifferentbarriersquotedby

the Member States. Often these are not prioritised and the list always reflects key

characteristicsofthelocalenergymarketandthecountriesenergyhistory.Therearehowever

certaincommonthemeswhichemergeasthemajorbarrierswhichMemberStatesbelievethey

face currently. Formore information on specific countries or on the extent of the barriers

quotedconsulttheregionalreports(SeeAnnexes4.1,4.2,4.3and4.4).

4.1Barrierstogrowthofcogeneration:financialbarrierstocogenerationdevelopmentA key element of profitability of a cogeneration plant is the run time of the plantwhich is

dependentontheheatdemandofthe industrialprocess,commercialentityorspaceheating

demandthecogenerationplant issupplying.The longertheoperatinghours inanyoneyear,

themore rapidly theprofitaccumulates fromanewplantand the faster is thepaybackon

investment. The ideal situation is a high number of heat demand hours. Hence industrial

applications with long operating hours or district heating in a region of long winters are

attractiveoptions

for

cogeneration.

The

second

most

significant

impact

on

the

cost

effectivenessofcogeneration iswhatiscalledthesparkspread:thedifferencebetweenthe

price of electricity and the price of the basic fuel onwhich the cogeneration depends. The

larger the price/cost difference, the more profitable the sale of the electricity from

cogeneration will be, hence the shorter the payback time and the lower the risk of any

investment.


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22

AllMemberStatescitesomeformoffinancialbarrierforcogeneration.Leadingamongthese

are:

Therelatively lowpriceofelectricity,especially forhouseholdsandtherelativelyhighpriceof gas.This is frequently coupledwith concerns regarding secure availabilityof

supplyand the risksassociatedwith single suppliers (Czech republic,Slovenia, Latvia,

LithuaniaandSpain)

Gas isa lowcarbonfuelandhencegoodforreducingclimatechange.However,cogeneration

plantsongashaveahighmarginalcostoffuelcomparedtoeithermaturebaseloadcoalplants

ornuclearbase load.Theresult isthatwhilecogeneratorscancompete inpeakperiods,they

cannotcompeteinoffpeak.Norarecogeneratorsfreetooperatetooptimisethevalueoftheir

electricitysalesonthemarketastheirprimarycustomers(theheatcustomers)mustbealsobe

served.

Uncertaintyintheforwardpriceoffuelandelectricityasawholemakinginvestmentincogenerationarelativelyhighriskbycomparisonwithotherdiscretionary investments

(GermanyandSpain).

Negative Impact of ETS on cost of cogenerated heat and electricity further erodesprofitability

The negative impact is a particular concern in the newMember States andwas specifically

mentionedbyPolandwherethereisaconsiderableamountofcoalintheprimaryfuelmix.For

allMemberStatestheadditionalcostofcarbondrivenbyETSandwhichcannotbepassedonin

the electricity pricing when generating off peak will impact the overall profitability of

cogeneration.AdditionallytheETScostofcarbon inheatfromdistrictheatingwhere district

heating is in competitionwithheat sourcesoutsideETSwillalsohave anegative impacton

profitability.

Impactofmarketliberalisation(BelgiumandtheNetherlands)Marketliberalisationhastendedtosuppressedthepriceofelectricity

NewMemberStates:

Thenew

Member

States

tended

to

highlight

additional

economic

barriers

as

the

most

significantbarrierstothefurtherdevelopmentofcogeneration:

Significant capital investment is required to upgrade cogeneration schemes in allsectors. In housing and district heating schemes significant capital investment is

requiredtorepair,modernise,insulateandinstallcogenerationinexistingnetworks.At

thesametimetheaccesstocapitalisparticularlypoorduetolowcreditratingoflocal

companiesandinthedistrictheatingsectorduetothepoorcommercialmodelswhich

haveoperatedhistorically(seebelow);


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23

SeveralMemberStateshighlighted thepoorcommercialmodelcurrentlyoperating insomedistrictheatingcompaniesasabarrier.Regulationofthesectorincludingcontrol

ofthepriceofheat,operatinghoursandsocialobligationsmadethesectorunattractive

commercially,whilemanycarrysignificantdebtduetocustomerpaymentdefaults.

Thesensitivityofparticularlysmallscalecogenerationanddistrictheatingtotheeconomicsof

theenergysectorishighlightedinthefollowingcommentsfromtheMemberStatereports:

Denmarkreports:Inthenextfewyearsthepriceofelectricitywillnotbehighenoughtoallowforinvestmentinnewcogenerationcapacity.Thisisattributedtothefactthatthe

electricitypriceisbelowthelongtermmarginalcostsforanewplant.Itgoesontonote

thatasolderplantsaretakenoutofservice,capacitywillgraduallyfallandthepriceof

electricitywillrisetoalevelatwhichinvestmentsmaybeprofitable.

Finlandreports:ModernCHPiscompetitiveonthemarket inrelationtotheseparateproductionofheatandpower.This ismainlyduetothestructureofour industryandtheclimaticconditions.CHPproduction isnotparticularlysupported inFinland,with

theexceptionofsmallscaleCHPproductionbasedonrenewableenergysources,since

small scale separate production is still relatively more competitive than CHP

production.

Belgium reports: At a federal level the report points tomarket uncertainty due toliberalisationandfuelpricevolatility.Thisisexacerbatedbytherequiredcapitaloutlay

ofcogenerationprojects

Poland reports: The fundamental barrier to the development of cogeneration iseconomic.

The

price

of

power

and

heat

on

the

national

competitive

markets,

in

considerationofthebalancingmarket,doesnotpointtowardsinvestmentincombined

sources.

4.2 Barriers to growth of cogeneration: administrative and procedural barriers tocogenerationdevelopmentManyMemberStates(Romania,Greece,Cyprus,Germany,SpainandEstonia)havehighlighted

administrative and procedural barriers to the further development of cogeneration. These

relate to the difficulties of developing commissioning and running cogeneration plants. A

sampleofthetypesofproblemsstillbeingfacedisgivenbelow:

Authorisationproceduresarebureaucraticanddifficulttoworkwith; Thereisanunduecostofinformationassociatedwiththeproposalandearlydevelopmentofaproject;

Proceduresforconnectiontoelectricalgridsarenotstandardisedorcodified; Placing of cogeneration electricity on the local energy market does not allow for thecharacteristicsofoperatingcogeneration;


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24

Initialcostsofconnectingtothegridandthereafteroperatingtheplantundulyburdenthecogenerationplant;

Unfavourable

provisions

concerning

back

up

electricity

supplies

decrease

the

credit

items

of

cogenerationproducersfromtheavoidednetworkcharges,

4.3Barrierstogrowthofcogeneration:generalThere are very few Member States comments on technical barriers to the promotion of

cogeneration. This is understandable as high efficiency cogeneration technology for the

production of heat and electricity is a mature technology which is well understood and

generallyavailable.OneMemberState, i.e.Poland,chosetoemphasisethispointandstated

At thepresent levelofpower technologydevelopment technicalbarriersareofvirtuallyno

importance.

Germany,whichhasclearlyastrongtechnicalbaseincogeneration,chosetocommentonthe

ongoingneedtodevelopcogenerationtechnologyhighlightingthatatechnicalbarrierexisted

in the case of gas turbine combined heat and power technology and counter pressure

machines,where there is a fixed ratio of electricity to useful heat production. This lack of

flexibilitymakesitdifficultforthistypeofplanttorespondtochangesindemandforelectricity

andhenceintheelectricityprice.Thisthreatensthepotentialtooperateprofitablyinamodern

fullyliberalisedelectricitymarket.

MaltaandSpainbothcitethelimitedavailabilityofanaturalgassupplyasatechnicalbarrier.

SeveralMemberStatesmentiontheearlydevelopmentstagesofbothcoolingtechnology(Spain

andGreece)andmicroCHP(UnitedKingdom,DenmarkandGreece)aspreventingtheircommentson

thesetechnologies.

4.4CODEprojectteamandregionalmeetingcommentsTheRegionalWorkshopsof theCODEproject,supplementedbyoneononediscussionswith

Member State stakeholders, were held inMilan (May 2009), London,Warsaw (September

2009)andAthens (October2009).Thesemeetingsgaveanopportunity for thecogeneration

stakeholders in the region todiscuss the successof the implementationof theCogeneration

Directiveandtohighlighttheirareasofconcern.

TherewasacertainamountofsatisfactioninsomeMemberStatesovertheirimplementation

of theDirectiveand itssuccesses so far,notablyBelgium,SpainandGermany.Eachof these


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25

MemberStateshasbeendiligentinimplementingtheDirectiveandhasfollowedthroughwith

supportmechanismstopromotecogenerationandtofurtherdevelopthepotentialidentified.

Thereare

refreshing

developments

in

Denmark

and

the

Netherlands

where

district

heating

and

smallcogeneration inagricultureareboth findingnewbusinessopportunitiesthroughselling

balancing services to the grid and throughusingheat storage tooptimise their timeon the

market.InGermany,wheremicroCHPisalsomostwidelyused,announcementsinsummerof

2009oftheintentionofLichtblicktocreateavirtualpowerstationofmicroCHPunitsinorder

tobalancetheincreasingvolumeofwindonthegrid,showthatnewtechnologyisstimulating

newwaysofworkingwithcogeneration.

ThemajorthemeswhichemergedfromthesefourRegionalWorkshopsare:

1.Impact

of

the

right

to

dispatch

or

not

on

the

overall

economics

of

cogeneration

significantly

effectsthecommercialoperationofcogenerationplant.

This is a theme which appeared only in the Estonian report, however, it is an important

discussionpoint forpolicy around cogeneration. Itwas also raised in allexcept theWarsaw

regionalmeetingandisconsideredbystakeholderstobeasignificantbarriertothepromotion

ofcogeneration.TheCogenerationDirectivehasprovisionsforMemberStatestogivetheright

ofprioritydispatchtocogenerationplants.Priorityofdispatchisalreadygrantedtorenewable

energy.Giventhelowcarbonnatureofcogenerationamongfossilfuelsourcesanditsabilityto

supply electricity when the heat demand is also present, giving priority of despatch to

cogenerationmakes

good

energy

efficiency

and

CO2

reduction

sense.

Attractively

for

the

TSO

or DSO the availability of the cogeneration electricity is predictable and dependable and

increasingly flexibility is being introduced. However, achieving recognition of the operating

characteristicsof cogeneration inorder tomaximise itsenergyefficiencyandCO2 reduction

potentialishard.

2.Projectinception,developmentandcommissionissuesaroundgridconnectionbothtechnical

andfinancial

Particularlywith small installationswhereconnection isa significantpartof the totalproject

costandtheconnectionisatDSOlevel,therearemultipleproblemsoriginatingintheongoing

poor adaption of the transmission and distribution networks to the emerging demand for

distributedgeneration.Thestakeholdersatregional levelsupported indetailtheissuesraised

byMemberStatesunderadministrativeandproceduralissues.

InSpainforexamplethere isanobligationonthegridownertogiveacogenerationplantan

interconnectiondependingonthecapacityofthegrid. Afeasibilitystudymustbecarriedout


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26

andbeforeitcanbestartedthegridownerrequiresthatabankguaranteeforasumequivalent

tothevalueoftheproposedprojectistakenoutbytheprojectowner.

In theUK there are 12DSOs covering the country. All have separate information systems,

contractsandstructuresfordistributedgenerationconnectionandnonearesetuptoengage

withdistributedgeneratorsonaregularbasis.

3.Capitalissues,andbusinessmodelissues,particularlyindistrictheatingrefurbishmentinnew

MemberStatesConsiderable concern was voiced both the new Member States seeking to promote

cogeneration through the refurbishmentofdistrictheating.Moreover,adeterioration in the

economicmodel

for

district

heating

is

widely

anticipated

with

the

advent

of

ETS

phase

III.

These

concerns can be summed up as the certainty of increased cost through ETS without the

certainty of any direct upside throughmore profitable sales of electricity or heat.Whether

these fearsprovecorrectornot the immediate impactonthemarket is real.Facedwith the

uncertaintyof thepost2013situationand thepossibilityoferodedmargins investorswillbe

cautious.

Economiccompetitivenessofdistrictheatingsystems:

High

cost

of

refurbishment

and

construction

of

district

heating

network

systems

in

comparison of low costs of individual heat supply systems (boilers, etc, especially

attractive for investors of new buildings (Poland, Hungary, Czech Republic, Slovenia,

Slovakia,Lithuania,LatviaandSpain);

Regulationonofsettingenduseheatprice,whichnotalways reflectsallcostofheatsupply, especially in case of price regulation for customers protection (Poland and

Slovenia);

HighcostsofCO2emissionallowances(ETS)whichcouldsignificantlyincreasefinalheatpricesandcausedisconnectionofconsumers carbon leakage to thenonETS sector

(Poland);

Poorpublicattitude/acceptanceofdistrictheatsupply(mainlycausedfromthepastbadexperiences)(Bulgaria,Poland,Hungary,Slovenia).

EconomiccompetitivenessofIndustrialCHP

industrialcogenerationhastocontendwithparticularobstacles:alackofinterestandalackofinhouseknowhow;


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27

hightransactioncostsforinformation; unstablemarketconditionsasaresultofuncertainindustrialactivityandenergyprices; lackofpriorityaccesstothegrid; in the industrialsector in the lowtemperatureheatingarea, inadequateobligation toacceptandpayforelectricityfromcogeneration

Smallandmediumscalecogeneration

Highcostofinformationtransactionsaroundprojects; Nonstandardised connection procedures and documentation for connection of newplants;

OnerouscostsimposedbyDSOtoconnectiontoanduseofgrid.


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5.MemberStatesprogress inreviewingsupportmechanisms for thepromotionofcogenerationThe Cogeneration Directive requires Member States to review their progress against the

objectivesoftheDirective,initiallyin2007andthereaftereveryfouryearsevaluatingprogress

towards increasing the shareofhighefficiency cogeneration.Member states tendednot to

giveveryfullaccountsofsupportmechanismsbutrathertoincludecommentsontheschemes

duringeithertheirassessmentofeconomicpotentialorduringthefirstprogressreport.

SeveralMember States havemodified their support schemes during implementation of the

Directive. Notably Germany, Belgium, Spain, Greece, Slovenia and Luxembourg have

consciously chosen to enhance support for cogeneration. At the same time otherMember

States, notably the Netherlands, France and Hungary, have cut back on support for

cogeneration. These different changes in supportmechanismhighlight that there isnothing

within the Cogeneration Directive which will guarantee the support and promotion of

cogeneration per se.Rather,where there is a broader effective strategy to increase energy

efficiencyorasimilarprocogenerationdriverthen theDirectiveallowsspecialsupporttobe

put in place. Hence the Cogeneration Directive has not put in place a driver for the

developmentofcogenerationinEUMemberStates,ratheritishascreatedencouragementfor

thealreadywilling.

CODEprojectteamandRegionalmeetingcommentsAnoverviewof thewide rangeofsupportmechanism inplaceacrossEurope isgivenbelow.

Therealitythatthecogenerationmarket isbasicallyflat,andconsistsheavilyofreplacement,

showsthatthepoliciesinplaceareineffectiveingrowingthemarket.TheRegionalWorkshops

heard some criticism of support mechanisms in different Member States and discussion

emphasised the need to consider not just the individual support mechanisms but their

interactionwith

Member

State

taxes,

procedures

at

TSOs

and

DSOs

and

wider

energy

policy

goals. In the SouthWestern Region, Italy has a certification in place that is weak, poorly

structuredand insufficienttopromotecogeneration. InFrancethepurchaseobligationwhich

supported cogeneration in the 1990s has been steadily diminished. In theNetherlands the

favourableschemesofthepasthaveallbutdisappeared.


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29

MemberStatesinreportingtheirsystemshavetendedtoadoptschemesthatexistedforother

purposes (suchas renewables). It isnotclearhowmuchusehasbeenmadeof the schemes

thusfar

in

Northern,

South

Eastern

and

South

Western

Regions.

However

almost

all

Member

States in the Eastern region have a fully functioning system and have based their support

schemesonGoOcertifications.


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30

6.MemberStatesprogressinestablishingasystemofguaranteesoforiginforelectricityfromhighefficiencycogenerationSpain,Greece, Ireland,Cyprus,Luxembourg,HungaryandPortugalhavenotreportedontheir

schemeforGuaranteesofOrigin(GoO).ThecreationoftheGoOstructure isanactionunder

theDirective,whichrequiresstructuring,effortandinvestmentofresource. Performancehas

beenparticularlypoorinthisareaagainsttheduedateofJune2007.Thislackofcompletionof

actionsonGoOmayreflectalackofexperiencewiththistypeofcertification,thisiscertainly

thecaseforGreeceandCyprus.

AtableshowingthestatusofimplementationofGoOschemesisincludedinAnnex3.


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7.ConclusionsandrecommendationsTheMemberStateimplementationoftheCogenerationDirectiveintolawandthecompletion

ofreportingrequirementshavebeenslow.Giventhatsomanyelementsofthefinalnational

implementation and the reporting are currently absent, the overall performance has to be

consideredpoor.Thepotentialstudyreportinghashoweveridentifiedanadditional122MWe

capacity potential for cogeneration in Europe mainly in Member States whose existing

penetrationofcogenerationisunder20%.TheDirectivehasalsostimulatedactivitytoimprove

thepolicystructurearoundcogenerationinseveralMemberStates.

TheCODE

project

makes

the

following

recommendations

and

observations:

7.1RecommendationsAs reporting on progress is an ongoing activity under the Directive, the CODE project

recommends:

ProvideMemberStateswithaclearstructureforfuturereporting: Clearspecificationofenergyunitsto energy beused; Requirereportingofbothheatandelectricity; Definemarket segmentation for reporting including thegranularityof:1) industrysectors;and2)thermal/electricalcapacityofinstallations;

Clearmeasurescoveringthestatusof implementation.ForexampleregardingGoOthemeasureshouldcertainlyaddressvolumeofGoOissuedinlastyear,andpossibly

tradedvolume.

FurtherreportingrequeststoMemberStatesshouldemphasisetheneedtolookatthecooling,wasteheat,microandbioenergypotentialforcogeneration;

Member States should clarify explicitlywhat assumptions are being used, andwhatscenario is inbeingassumed, todeterminewhat iseconomicpotentialandwhat is

technicalpotential;

TheEuropeanCommissionshould fromnowonbe firmonMemberStatesand firmlyimpose reporting deadlines. The continual process of assessment, learning and

reportingunder theDirective is theonlypotentialbitewhich theDirectivecontains

andsomustbeenforced.


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7.2Observations TheDirectivehasbeensuccessfulincreatingaregulatoryframeworkforthepromotionof

cogeneration

as

seen

by

the

consistency

which

is

now

emerging

in

the

Member

States

legislationoncogeneration;

WhereMemberStateshavechosentomakecogenerationpartofastructuredenergyefficiencystrategy,theyhavealsoputactionsinplacetostarttoremovebarriersandto

improvesupportforcogenerationtoovercomemarketshortfalls;

EnhanceduseofcogenerationgenerallyacrosstheMemberStateshasnotyetemergedasavisiblemarketreactionto implementationoftheDirective.Theexceptionstothis

statementareGermany,Spain,BelgiumandSlovenia.AlthoughtheMemberStateshave

highlightedconsiderableadditionalpotentialforcogenerationinEurope,theyhavealso

highlightedsome

very

weighty

barriers

to

achieving

this

potential.

Special

efforts

in

the

areas of grid connection, regulation and administration, and financing need to be

addressed;

The majority of Member States appear to have produced a defendable nationalpotentialsreportbasedtoareasonableextentonabottomupapproach.Thereports

are generally conservative technically and vary considerably in the economic

assessment approach. Member States find opportunities in either industrial

cogenerationordistrictheatingaccordingtotheirhistory.Cooling,microCHPandbio

energyopportunitiesareinmanycasesunexplored,atthispointduetolackofreliable

technicaland

market

information.

This

tendency

not

to

look

for

wider

and

new

applicationsandthecurrentshortageofgood information inthenewestapplications,

suggests that opportunities were not enthusiastically sought rather history was

developed;

ThecogenerationpotentialsstudyisoneofthefewoccasionsonwhichMemberStateswereasked toconsider theenergy requirementsofheatwithelectricitydemandasa

byproduct. The result has been generally positive uncovering a potential to double

EuropeanCHP.Morefocusonheatinenergyplanningwillassistthefuturereporting.


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Annex 1:EuropeanCommission guidelinesonnational cogenerationpotentialsestimationandreporting


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Annex 2: Calculation methodologies for CODE project (conversionsandinterpolations)IntroductionThe published Member States reports were interrogated and where it was available the

followinginformationwascollected:

Existingcogenerationcapacity(intermsofelectricalcapacity)GWe Technicalcogenerationcapacity(intermsofelectricalcapacity)GWe Economiccogenerationcapacity(intermsofelectricalcapacity)GWe

SomeMemberStatesdidnotprovidealldataunderallofthesethreesectionsandwherethisis

missing

estimates

have

been

made

in

accordance

with

the

procedure

noted

below.

WehavecomparedtheexistingcapacitywiththeEconomicCapacitytoderiveanestimateof

theAdditionalEconomicCapacitytobeexploitedthroughoutEurope.

We have estimated the Primary Energy Savings (PES) and corresponding CO2 emissions

reduction that are available if this additional economic cogeneration capacity were to be

implemented.ThemethodologyforestimatingtheEnergySavingsandCO2emissionreduction

isnotedbelow.

MethodologytoestimateEconomicCapacitywheredataisnotreportedMost

Member

States

reported

their

existing

cogeneration

capacity

but

where

this

is

missing

the

latestEurostatdatahasbeenused.

SomeMemberStateshavereportedbothExistingCapacityandEconomicCapacity,thesedata

havebeensummedandtheratioofExistingtoEconomicforreportingcountriesinEuropehas

beennoted.

WhereaMemberStatehasnotreportedEconomicCapacity,ithasbeenestimatedbyapplying

theEuropeanratiotoitsExistingCapacity

MethodologytoestimateEnergySavingsfromtheAdditionalEconomicCapacityMemberStatesarerequiredtocompletereportsonthebasisofcompliantcogeneration,this

impliesthatcogenerationincludedmusthaveachievedPESofatleast10%.However,Member

States have not reported on the actual Energy Savings Achieved. In order to estimate the

EnergySavings,threeassumptionsmustbemade:

RatioofCapacitytoOutput. EnergySavingsattributabletoadoptionofcogeneration EnergySavingscanbeassumedaselectricity


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35

The ratio of Capacity to Output was derived from the latest Eurostat data (2007) for

cogeneration employed in Europe by dividing the installed capacity by the total electrical

generation.

Theachievableenergysavingwasdeemedtobe10%asthis istheminimumrequiredbythe

Directive.

ThetotaladditionalEconomicCapacitywasfoundbysubtractingtheExistingCapacityfromthe

EconomicCapacityasderivedabove.

TheEnergySavingwasthenfoundbymultiplyingtheAdditionalEconomicCapacitybytheratio

ofCapacitytoOutputandmultiplyingthisresultby10%.

Methodology to estimate Carbon Dioxide emission reductions attributable to the EnergySaving

TheEnergySavingderivedaboveisintheformofelectricity.TheaverageCO2concentrationof

electricity generated in Europe is quoted as 0.45 kg/kWh. To estimate the CO2 emission

reductionsavailablethetotalannualEnergysavingwasmultipliedby0.45kg/kWh.Thevalueof

this potential CO2 reductionwas found bymultiplying by the price of 39 / ton of CO2 as

quotedintheCommissionimpactassessment.


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Annex3:StatusofimplementationofGuaranteeofOriginsschemesintheEReportingobligationsofCogenerationDirective2004/08/EC

(situationupto05/10/2009)

MS

ProgressReport AnalysisofNationalPotential BarriersforCHP/administrativeproceduralsituation

[Art10(2)Art6(3)] [Art10(1)Art6(1)] [Art10(1)Art9(1&2)]dueon21/02/2007andthen

each4years dueon21/02/2006 dueon21/02/2006

BE received received receivedBG

received

received

received

CZ received notreceived notreceivedDK received received receivedDE received received receivedEE received received receivedIE notreceived received receivedEL received received receivedES received received receivedFR received notreceived receivedIT waitingfortranslation received waitingfortranslationCY received received receivedLV received waitingfortranslation waitingfortranslationLT received notreceived waitingfortranslationLU notreceived waitingfortranslation notreceived


37/38

HU notreceived notreceived notreceivedMT received received receivedNL received received receivedAT received received receivedPL received received receivedPT notreceived notreceived notreceivedRO received received receivedSI received received receivedSK received received receivedFI received received receivedSE waitingfortranslation waitingfortranslation waitingfortranslationUK received received received


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Annex 4: Regional reports on Member State reporting under theCogenerationDirectiveAnnex4.1:NorthernEuropeRegion

Annex4.2:EasternEurope

Annex4.3:SouthWesternEurope

Annex4.4:SouthEasternEurope

european potential for cogeneration

Documents