Of Europe’s major users of cogeneration technology, only Germany, Sweden and Poland are seeing growth in its application at present. In the Netherlands and Spain the use of cogeneration is actually declining, while the pattern is flat for Belgium, the UK, Austria, Finland and Italy.

So reported the CODE Project, a joint initiative between the EU and Europe’s cogeneration industry, two weeks ago. The main headlines were all about future potential – that cogeneration could generate a fifth of the EU’s electricity by 2030, employing a growing proportion of renewable fuels and delivering substantial primary energy savings. The amount of Europe’s heat supplied by cogeneration would grow by half, and emissions of carbon dioxide would be cut substantially.
Map of Europe

But the report: European Cogeneration Roadmap is arguably more interesting in its identification of the barriers that are still holding cogeneration back, and causing a reverse in its fortunes in Spain and the Netherlands.

Despite the potential, the current picture is rather bleak. The EU is currently experiencing a period of particularly difficult spark spread challenges for CHP operators using gas; low wholesale electricity prices have coincided with relatively high gas prices, says the report. As a result, large CHP plants in many member states are either running at part capacity or have been switched off altogether.

But the barriers to cogeneration are more complicated than poor spark spreads. The main challenge for cogeneration remains overcoming energy market failures which expose CHP operators to variability of both electricity and fuel markets despite delivering energy savings at system level, says the Roadmap. Achieving a reasonable business proposition for CHP developers and operators straddling these two energy markets remains the single biggest challenge for the CHP sector.

This is particularly significant at a time when Europe needs to improve its security of supply, for example reducing energy imports by optimising its use of energy resources, adds the report. Failing to reward operators for the real efficiency benefits that local cogeneration schemes deliver makes no sense.

Cogeneration certainly has great potential in Europe, but a whole raft of difficult market and regulatory barriers remain in place. As COGEN Europe Managing Director Fiona Riddoch said: ‘Global energy markets are beyond Europe’s control, but the efficiency of its use of energy – whether imported or homegrown – is not.’