Combined heat and power (CHP)
The share of electricity produced from combined heat and power (CHP) in the EU-27 decreased slightly between 2005 and 2006 from 11.1 % to 10.9 %. Strong policy support to promote the technology in many Member States was counteracted by the effect of increasing gas prices and relatively low electricity prices, which reduced the competitiveness of gas-fired CHP-plants. Greater incentives will be needed to reach the EU-15 indicative target of 18 % of CHP electricity in gross electricity production by 2010 (currently 10.1 %). In the new Member States the share of CHP in electricity production is 16.0%, more than 1.6 times that in the EU-15.
Is the European energy production system becoming more efficient?
Fuel input to CHP plants in EU-27 and EEA countries in 2006
Note: No data available for Malta, Liechtenstein and Switzerland
Fuel input to CHP plants in the EU-27 in 2006
Note: No data available for Malta, Liechtenstein and Switzerland
The share of electricity from combined heat and power in total gross electricity production in the EU-27 was 10.9 % in 2006. It was significantly higher in the new Member States (16.0%) than in the pre-2004 EU-15, where it was 10.1%. In 2005, these shares were 11.1 %, 16.5 % and 10.2 %, respectively.
In recent years, CHP has suffered from adverse market conditions in many of the EU Member States. The problems encountered by CHP include: increasing natural gas prices that have reduced the cost competitiveness of CHP (the preferred fuel for new CHP plants is natural gas), falling electricity prices resulting from market liberalisation and increased competition (although these prices have now started to rise again - see EN31), barriers to accessing national electricity grids to sell surplus electricity, and relatively high start-up costs. Until the external costs of energy are internalised in its price, cogeneration may require government support such as by providing investment support or giving tax exemptions (EC, 2005).
To date the uncertain and changing regulatory environment in many Member States as the electricity sector is liberalised, coupled with a lack of coordinated support policies for CHP, has led to an increased perception of risk and undermined confidence. Further support mechanisms will therefore be needed in the future in order to alleviate this situation. The CHP Directive on the promotion of high-efficiency cogeneration (2004/8/EC) is expected to start having an effect from 2006; it encourages Member States to promote CHP up-take and help to overcome the current barriers hindering progress. It does not set targets, but instead requires Member States to carry out analyses of their potential for high efficiency cogeneration.
A number of EU Member States have introduced laws or other support mechanisms to promote new CHP. Such measures include:
- Legal provisions prescribing a mandatory CHP oriented energy audit in the case of new installations or major reconstructions above a given capacity (e.g. 5 MW in the Czech Republic);
- Statutory duty to connect particular types of CHP to the grid and purchase their electricity (Germany, 2002), provisions obliging the utilities to provide CHP access to the networks, adopted in many new Member States;
- Fiscal measures to provide support to CHP, such as:
o capital grants (United Kingdom, the Netherlands),
o preferential feed-in tariffs for CHP plants (Czech Republic and Hungary) or guaranteed minimum feed-in price for electricity produced by CHP plants operated by public utilities (Germany, 2000 ),
o tax incentives: exemptions from or lower rates of taxation (United Kingdom), exemption from income tax for the operation of CHP up to a defined capacity limit (Czech Republic and Slovakia) or lower level of value added tax (VAT) applied to district heating (Czech Republic). The recent decision by the EU to allow for lower VAT-rates for combined heat and power production may help to further promote CHP (Council of the European Union, 2006).
Despite these measures, there remain substantial differences in the level of combined heat and power across the EU-27. Countries with a high market penetration of CHP electricity include Denmark, Finland, Latvia and the Netherlands. In Denmark CHP has received strong government policy support, providing tax incentives and subsidies, and growth has been seen mainly in public supply as a result of investments in district heating infrastructure. Between 2005 and 2006 the share of CHP electricity dropped by 11.4 percentage points in Denmark. This was mainly due to the large increase of electricity generation (25.7 %, see EN27) from non-CHP generation, which for the large part is exported, as the absolute level of electricity generation from CHP barely changed, moving from 18.9 TWh in 2005 to 18.6 TWh in 2006.
Government support was also an important factor in the Netherlands, combined with widespread availability of natural gas, the favoured fuel for CHP. The high level of CHP production in Finland and Latvia reflects the cold climate, which leads to a significant need for heat as well as electricity. In contrast to the process of energy market liberalisation in many other countries, the strong demand for both outputs coupled with a well developed district heating network, has actually helped to stimulate investment in CHP as opposed to hindering its expansion. Poor infrastructure for natural gas and less demand for heat, in particular in Greece and to a lesser extent Ireland and Portugal, has historically hindered CHP development and the share of CHP electricity remains low in these countries. Combined Heat/Cooling-Power Conversion may help to overcome the problem of surplus heat production in summertime and in warmer countries such as Greece and Portugal.
Although the increase in the share of CHP in electricity production has been limited, the amount of electricity production form CHP increased during 1994 to 2006 in the majority of EU-27 countries. Germany currently has the highest absolute production of CHP-electricity (79.7 TWh in 2006).
The use of renewable energies (biomass) in combined heat and power provides the opportunity to further improve its environmental performance, and increase progress towards targets for renewable electricity production (see EN30). However, as shown in Figure 2 renewables provided only 11.6 % of the fuel input in CHP plants in the EU-27 in 2006, an increase of 1.6 percentage points compared to 2005. Natural gas accounted for 49.6 % of the fuel input in EU-15 (13.4 % in the new Member States), while solid fossil fuels such as coal and lignite provided 72.3 % of the fuel input in the new Member States (16.1 % in EU-15).
Indicator specification and metadata
The share of combined heat and power (CHP) electricity production is the ratio between the electricity produced from combined heat and power plants (based upon the consideration of individual units within the plants) and the gross electricity production calculated for a calendar year. The former is expressed as a percentage of the latter. It measures the contribution of electricity produced from CHP to total electricity production. However, there are several important qualifications as not all the electricity and (useful) heat produced in CHP plants can be considered CHP production. This is explained in section 6 of the metadata. It should also be noted that although the indicator focuses on CHP electricity the quantity of useful heat recovered is almost 2.5 times higher in energy terms.
Electricity generation: TWh
Policy context and targets
Combined heat and power is one means of increasing the efficiency of electricity generation as it makes use of the heat that is otherwise lost in conventional thermal power plants. The combined efficiency of heat and electricity production from CHP schemes is therefore usually higher than that from heat and electricity produced independently. A typical efficiency value for CHP is approximately 75-90% for the combined heat and electricity generation, compared to a typical efficiency value for conventional thermal electricity-only plant of 40-50% and for heat only boilers of 80-90%, an efficiency benefit of 10-25% (ADEME, 1999). CHP plants are often also located close to where the heat and electricity can be consumed, limiting transmission and distribution losses.
Increasing the conversion efficiency of power generation through the use of CHP helps to reduce the environmental impact of power generation. Additional environmental benefits can be realised if the scheme uses low emission fuels such as natural gas or biomass as opposed to coal or oil. Meeting the indicative EU-15 target of doubling the share of CHP in gross electricity production from 1994 to 2010 could lead to avoided CO2 emissions of over 65 Mt CO2/year by 2010 (see ENER 11).
CHP in industrial processes has a large potential for achieving energy efficiency and CO2 emission reductions. A typical example: of the four refineries in the port of Rotterdam (the Netherlands) two use CHP for production of steam, the other two not. When the other two would also use CHP for steam-production, this would result in an expansion of production from refineries with app. 500 MW. Technically, a further expansion to app. 1,200 MW would be possible if all refineries would use CHP for heat-production as well. If this 1,200 MW would replace production of electricity by coal-fired power plants, this equals a net reduction of approximately 5 MtCO2 (CE Delft, 2008).
Council adopted on 6 April 2009 the climate-energy legislative package containing measures to fight climate change and promote renewable energy. This package is designed to achieve the EU's overall environmental target of a 20% reduction in greenhouse gases and a 20% share of renewable energy in the EU's total energy consumption by 2020.The climate action and renewable energy (CARE) package includes the following main policy documents:
- Directive 2009/29/EC of the European Parliament and of the Council amending directive 2003/87/ec so as to improve and extend the greenhouse gas emission allowance trading scheme of the community
- Directive 2009/31/EC of the European Parliament and of the Council on the geological storage of carbon dioxide
- Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources
- Community guidelines on state aid for environmental protection (2008/C 82/01)
- Directive 2008/101/EC of the European Parliament and of the Council amending directive 2003/87/ec so as to include aviation activities in the scheme for greenhouse gas Emission allowance trading within the community
- Regulation (EC) no 443/2009 of the European Parliament and of the Council setting emission performance standards for new passenger cars as part of the community’s integrated approach to reduce CO2 emissions from light-duty vehicles
Second Strategic Energy Review; COM(2008) 781 final. Strategic review on short, medium and long term targets on EU energy security.
Energy Services Directive; Directive 2006/32/EC. Sets out clear mandatory targets for annual energy intensity improvements at Member States’ level and for the share of energy efficient public procurement for the period 2006-2012. For the same period, strong incentives were given by the Directive for Member States to ensure that suppliers of energy offer a certain level of energy services.
Energy Performance Buildings Directive; Directive 2010/31/EU. The Member States must apply minimum requirements as regards the energy performance of new and existing buildings, ensure the certification of their energy performance and require the regular inspection of boilers and air conditioning systems in buildings.
Communication from the Commission; COM(2008) 771 final. The main objectives of this communication are to report on the current status of the combined heat and power generation (CHP or cogeneration), and to present possibilities for its development.
Detailed guidelines for the implementation and application of Annex II to Directive 2004/8/EC; 2008/952/EC. Guidelines for the calculation of the electricity from high-efficiency cogeneration.
Directive on co-generation; 2004/8/EC. Requires Member States to carry out analyses of their potential for high efficiency cogeneration.
Forthcoming policy includes: Proposal for a Directive on energy efficiency and repealing Directives 2004/8/EC and 2006/32/EC [COM(2011)370, 22/06/2011]
The CHP Directive requires Member States to analyse the potential for CHP and to make substantial progress towards this potential. The reports provided by the Member States are still being analysed and are very variable in their approaches. In the past the progress for CHP development was set by the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on “A Community strategy to promote combined heat and power (CHP) and to dismantle barriers to its development” (COM97/514 final from 15 October 1997) calls for an increase in the share of CHP production in gross electricity generation to 18 % by 2010 in the EU-15 Member States. The share of electricity from CHP in total gross electricity production in the EU-15 was 10.3 % in 2008, hence quite a large gap from the target.
Related policy documents
Energy Performance Buildings Directive
Energy Services Directive on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC
Directive 2008/101/ec of the European parliament and of the Council amending directive 2003/87/ec so as to include aviation activities in the scheme for greenhouse gas Emission allowance trading within the community
Detailed guidelines for the implementation and application of Annex II to Directive 2004/8/EC
Community guidelines on state aid for environmental protection (2008/c 82/01)
Directive 2009/29/ec of the European parliament and of the Council amending directive 2003/87/ec so as to improve and extend the greenhouse gas emission allowance trading scheme of the community.
Directive 2009/31/ec of the European parliament and of the Council on the geological storage of carbon dioxide.
Climate action and renewable energy package (CARE Package)
Combating climate change is a top priority for the EU. Europe is working hard to cut its greenhouse gas emissions substantially while encouraging other nations and regions to do likewise.
Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading system of the Community.
Proposal for a Decision of the European Parliament and of the Council on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020.
Europe can save more energy by combined heat and power generation
COM(2008) 781 final - Second Strategic Energy Review
Combined heat and power Communication COM(97) 514 final
The EU indicative Combined Heat and Power target set in the Community Strategy to promote Combined Heat and Power, COM(97) 514 final of an 18 % share of CHP electricity production in total gross electricity production by 2010
DIRECTIVE 2004/8/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC
DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC
REGULATION (EC) No 443/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 443/2009
Regulation (ec) no 443/2009 of the European parliament and of the Council setting emission performance standards for new passenger cars as part of the community's integrated approach to reduce CO2 emissions from light-duty vehicles.
Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to improve and extend the EU greenhouse gas emission allowance trading system - Summary of the Impact Assessment.
Methodology for indicator calculation
The share of electricity produced from combined heat and power as a percentage of total national electricity production. The coding and specific components of the indicator are:
Numerator: Electricity production from combined heat and power plants. However, as mentioned in section 2 there are several important qualifications regarding the quantity of electricity that be considered to be from CHP production.
A power plant which is equipped with heat recovery facilities in connection with electricity generation is called a CHP plant. From the statistical point of view, the simplest approach is to consider all the electricity and useful heat produced in these plants as CHP production. However, there are special features in CHP production, which complicate the collection of the statistics. First, there can be several units in a power plant, not all of which have the possibility of recovering heat. Therefore, the collection of statistics has to be carried out on a unit basis. There might be some supplementary heating in addition to the CHP heat production. This supplementary heat can be produced for example in an extra boiler, completely separated from the CHP process and hence must be subtracted from the total heat generation of the plant. The fuel used to generate this heat also has to be subtracted from the total fuel consumed, when the CHP production is considered. There are also flexible units, where the produced heat to power ratio is adjustable. The flexible units can be operated in a fully CHP mode, or they may also be run without any heat recovery at all, depending on the current demand for heat and electricity. Variable heat loads are typical for district heating plants, whilst in industry the ratio between heat load and electricity generation is generally more stable.
Following a change in methodology the CHP component in electricity production is now calculated from the total production of CHP plants by considering the overall annual efficiency and the power-to-heat ratio of individual units within each plant to account for the above. (see Commission Decision of 19 November 2008 establishing detailed guidelines for the implementation and application of Annex II to Directive 2004/8/EC of the European Parliament and of the Council (2008/952/EC) for more details, but this methodology has small difference from the IEA methodology). Under certain conditions all the electricity produced in a CHP unit can be regarded as CHP production and in this case there is no need to separate the non-CHP component. In the past there was no unequivocal quantitative rule to define when this separation into CHP and non-CHP components should be done. Different interpretations of the old methodology were therefore possible. The methodology was strengthened for the survey for the year 2000; a threshold of 75% for the overall efficiency was set as the criterion to select plants in which the CHP component of the electricity production has to be calculated. If the average annual efficiency is 75 % or higher, all the electricity produced in the plant is considered to come from CHP. If the efficiency is below that threshold, the CHP electricity (ECHP) is calculated by multiplying the CHP heat production by the characteristic power-to-heat ratio of the plant.
The fuel for CHP has been corrected for countries where the efficiency of CHP is less than 75%. This analysis is undertaken by summing the electrical and heat outputs of CHP and dividing by 75%. If the fuel efficiency reported in the data is greater than 75% for a Member State the data are not adjusted. However, if below then some of the fuel is probably associated with non-CHP production and so the fuel for CHP is set at the threshold of 75% and the remaining fuel is assigned to non-CHP. The comparison of this analysis is presented in Fig 2c.
Denominator Codes: 6000 electrical energy 17_107000 total gross electricity generation.
Average annual rate of growth calculated using: [(last year/base year) ^ (1/number of years) –1]*100
For a significant period of time, the statistical system did not permit the correct assessment of CHP production at European level. EU Directive 2004/8/EC on the promotion of cogeneration then obliged Member States to submit statistics on CHP to the Commission (Eurostat). However, Eurostat had already started collecting CHP statistics at the beginning of the 1990s (in the course of pilot projects). Since then, a common methodology for CHP data collection has been developed and assistance given to Member States in setting up the required statistical reporting system (Eurostat, 2007). The overall efficiency of a CHP unit is used as a measure to determine whether electricity generation is fully CHP or not. If overall efficiency is above a threshold set at 75 % (85 % for steam condensing extraction turbines and combined-cycle units), all the electricity generated is considered to be CHP electricity. On the other hand, if the overall efficiency is below the threshold, the amount of CHP electricity (ECHP) is calculated by multiplying the produced CHP heat by the power to heat ratio. These power-to-heat ratios are the actual ratios. If these actual ratios are unknown, default values can be used for several types of CHP. For several types of CHP (e.g. Stirling, fuel cell or Organic Rankine Cycles) countries can determine their own default values. These values shall be published and notified to the Commission.
Geographical coverage: Eurostat had 32 Member Countries, but for CHP data only the EU-27, Turkey and Norway have been reported. Malta has no CHP at all
Temporal coverage: 2009. The data for heat supply from CHP for Belgium was not supplied so 2008 data were used. In the cases of Denmark, Cyprus, Netherlands, Austria and UK the data for the split between main activity producers and auto-producers were not suuplied so 2008 data were used.
Methodology and frequency of data collection: Data collected bi-annually.
Eurostat definitions for energy statistics http://ec.europa.eu/eurostat/ramon/nomenclatures/index.cfm?TargetUrl=LST_NOM&StrGroupCode=CONCEPTS&StrLanguageCode=EN, Eurostat metadata for energy statistics http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/data/database
Methodology for gap filling
No methodology for gap filling has been specified. Probably this info has been added together with indicator calculation.
No methodology references available.
As mentioned in section 6 the method for data collection by Eurostat on combined heat and power has been revised in recent years. The primary change has been to account for the fact that not all of the electricity and (useful) heat produced in CHP plants can be considered CHP production. The methodology was strengthened for the survey for the year 2000 and again in 2002 and allows a clearer distinction between CHP and non-CHP electricity production and ensures more harmonised CHP statistics across the Member States. The effect of the methodology change on the reported CHP electricity production varies between the Member States. Some Member States were already reporting CHP statistics in which the condensing power, or the non-CHP production, was strictly separated from the gross production of CHP plants, whilst others were not. However, the overall effect has been to reduce the estimates of CHP electricity in the EU.
Data sets uncertainty
No historical data for new Member States. Changes in the methodology mean that historical time series are not consistent.
No uncertainty has been specified
Energy statistics (Eurostat)
provided by Statistical Office of the European Union (Eurostat)
Energy (Primary topic)
Typology: Efficiency indicator (Type C - Are we improving?)
- ENER 020
Contacts and ownership
EEA Contact InfoAnca-Diana Barbu
EEA Management Plan2010 (note: EEA internal system)
For references, please go to www.eea.europa.eu/soer or scan the QR code.
This briefing is part of the EEA's report The European Environment - State and Outlook 2015. The EEA is an official agency of the EU, tasked with providing information on Europe's environment.
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