Indicator Assessment

Combined heat and power (CHP)

Indicator Assessment

Prod-ID: IND-122-en

Also known as: ENER 020

Published 30 Apr 2012 Last modified 11 May 2021

21 min read

Topics: Energy

This page was archived on 12 Nov 2013 with reason: Content not regularly updated

In 2009, the share of electricity produced from combined heat and power (CHP) in the EU-27 was 11.4% a modest growth from 2008 (11.0%), but it has changed little from earlier years, where in 2005 11.1%, despite strong policy support to promote the technology in many Member States. High gas prices, inconsistent energy policies and relatively low electricity prices have kept the competitiveness of gas-fired CHP-plants marginal in many Member States, though there are signs that this is changing. CHP is also a significant contributor to the heat supply in Europe, supplying 15.2%. However, the EU-15 indicative target of 18% of CHP electricity in gross electricity production by 2010 will be missed (currently 11.0% of total gross electricity production in EU-15).

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The share of electricity from combined heat and power in total gross electricity production in the EU-27 was 11.4% in 2009, which is a growth from 2008 of 0.4% and a rise from 2005 of just 0.3% points. CHP has seen modest progress in increasing the share of CHP in EU electricity generation.
The share of the heat market has been estimated for this indicator. CHP provided 15.2% of the total heat supplied in the EU-27 in 2009. This is an increase in the share from 11.8%, though there have been some adjustments to the methodology for calculating heat, which results in the two years not being directly comparable.
The preferred fuel for new CHP plants is natural gas due to its flexibility concerning the heat to power ratio as well as a better environmental performance compared for instance with liquid fossil fuels. In recent years, CHP has suffered from increasing natural gas prices and falling electricity prices, development which diminished the cost competitiveness of these plants. This trend may change in the future given that both prices have now started to rise again (see Eurostat website, Energy Statistics – prices (see link in References section below)). Other barriers included high costs for grid connection to sell surplus electricity, relatively high start-up costs, and the design of the policy framework in some cases.

Fuel input to CHP plants in the EU-27 in 2009

Note: Fuel input to Combined Heat and Power plants in the EU-27 in 2009

Data source:

Eurostat. Energy statistics: Supply, transformation, consumption - all products - annual data. http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/data/database

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Fuel input to CHP plants in EU-27 and EEA countries in 2009

Note: Fuel input to Combined Heat and Power plants in EU-27 and EEA countries in 2009

Data source:

Eurostat. Energy statistics: Supply, transformation, consumption - all products - annual data. http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/data/database

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Recalculation of CHP fuel input using the CHP Directive

Note: Recalculation of Combined Heat and Power fuel input using the CHP Directive

Data source:

Eurostat. Energy statistics: Supply, transformation, consumption - all products - annual data. http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/data/database

Internal analysis (Only EU-27)

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The share of CHP production in gross electricity production was significantly higher in 2009 in the new Member States (15.6 % of total gross electricity production) compared to the EU-15, where the share was 11.0% (see Figure 1a). Countries with a high market penetration of CHP electricity include Denmark (45.3%), Finland (35.8%), and the Netherlands (32.5%). In Denmark CHP has received strong government policy support in the past, providing tax incentives and subsidies, and growth has been seen mainly in public supply as a result of investments in district heating infrastructure. Government support was also an important factor in the Netherlands, combined with widespread availability of natural gas. The high level of CHP production in Finland reflects the cold climate, which provides scope for a better use of the heat, through district heating as well as the electricity produced by CHP. 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[1] 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. Eventually, 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 for space conditioning. A large decline in share has been observed in Romania (from 26.2% in 2005 to 9.6% in 2007), which was due to restructuring, however, the share is now increasing again and in 2009 was 10.8%.
The share of CHP in gross electricity production has risen only modestly since 2005. In 2005, 11.1% of gross electricity production was derived from CHP. Figure 1b shows the CHP contribution in 2005 and 2009 for the EU-27.
Most of the EU Member States have in place feed-in tariffs for CHP promotion. Apart from feed-in tariffs, other support mechanisms exist such as investment subsidies (Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Finland, Germany, Greece, Ireland), excise duty exemption, energy tax exemption (Belgium, Finland, Germany, UK), preferential treatment for grid access (Estonia, Slovakia, Bulgaria), fuel subsidy (gas used as input fuel for CHP in Bulgaria, wood chips in Finland), etc. to promote new CHP (COGEN 2007a,b). The level of feed-in tariff sometimes depends on the size of the unit, on the fuel use (e.g. in Slovakia the feed-in tariff is linked to share of coal in the input fuel, in Estonia peat, waste and shale gas are promoted) or is linked with the obligation to deliver heat into the district heating system (e.g. Latvia).
The use of renewable energies (biomass) in combined heat and power provides an opportunity to further improve the environmental performance of CHP, while simultaneously increasing renewable electricity production (see ENER30). However, in 2009, as in 2008, renewables provided only 11.0% (of the fuel input in CHP plants in the EU-27 (see Figure 2a). Natural gas accounted for 53.6% of the fuel input in EU-15 and 22.6% in the new Member States in 2009. Solid fossil fuels such as coal and lignite provided 14.6% of the fuel input in EU-15 and 74.2% of in the new Member States in 2009 (see Figure 2b).
However, fuel input to CHP plants presents a problem from the statistical reporting. Whereas CHP electricity generation and CHP heat production provide the CHP output, which are in line with the philosophy of the CHP Directive (2004/8/EC). This requires that a CHP plant’s output is divided into that which is part of the CHP process and that which is not. For the fuel input to CHP this appears not to be the case for all Member States. The CHP Directive sets a minimum threshold of 75% overall efficiency for the CHP process (lower heating value LHV). However, for a number of Member States the overall efficiency is very low, for example Slovakia 15.8%, Greece 16.8%, Poland 23.4%, Slovenia 23.1% and Italy 30.8%. Figure 2c presents a recalculation of the fuel used in CHP plants associated with the CHP process.
The share of heat production supplied by CHP has been estimated. Total heat is not reported by Eurostat, but it has been estimated by analysing fuel that was used by final consumers (excluding energy industries, non fuel uses and transport). Eurostat does collect data on derived heat from district heating. These two data sets have been combined and assumptions used for boiler efficiency and other uses (see note 6). Using this method, CHP supplied 15.2% of heat demand of the EU-27. The countries with a high market penetration are Finland (37.5%), Denmark (32.0%) and Sweden (29.4%). Finland, Denmark and Sweden are countries with a high share of district heating, while Finland also has strong intensive industries which use CHP extensively.

(1) Natural gas is the favoured fuel for combined heat and power.

Supporting information

Indicator definition

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.

Units

Electricity generation: TWh

Rationale

Justification for indicator selection

CHP or “cogeneration” implies that heat and electricity are produced simultaneously in one process. Use of combined heat and power helps to improve the overall efficiency of electricity and heat production as these plants combine electricity production technologies with heat recovery equipment. Increasing the conversion efficiency of power generation through the use of CHP helps to reduce the environmental impact of power generation. A higher penetration of CHP will also help achieving the 20% target for GHG emissions, the 20% target for renewable energy in final energy consumption and the 20% reduction in gross inland consumption compared to BAU by 2020. CHP has received policy support in the latest proposed package on the Energy Efficiency Directive, which is now being scrutinised by the Council and the European Parliament. This package will if adopted more close integrate CHP with efficiency in transformation and distribution (ENER 11) and the overall efficiency of thermal generation (ENER 19).

Scientific references

Policy context and targets

Context description

Environmental context

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).

Policy context

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 CO₂emissions 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]

Targets

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.

Methodology

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.

Methodology references

No methodology references available.

Uncertainties

Methodology uncertainty

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.

Rationale uncertainty

No uncertainty has been specified

Data sources

Energy statistics (Eurostat)
provided by Statistical Office of the European Union (Eurostat)

Other info

DPSIR: Response
Typology: Efficiency indicator (Type C - Are we improving?)

Indicator codes

ENER 020

EEA Contact Info info@eea.europa.eu

Permalinks

Permalink to this version: 06655a60-ab12-4175-962b-daddef5eb82a
Permalink to latest version: IND-122-en

Older versions

14 Sep 2010 - Combined heat and power (CHP)

05 Jul 2010 - Combined heat and power (CHP)

27 Nov 2008 - EN 20 Combined Heat and Power (CHP)

22 May 2007 - EN20 Combined Heat and Power (CHP)

Geographic coverage

Austria Belgium Bulgaria Cyprus Czechia Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom