Cogeneration in Europe’s Challenging Market

Finally, there are serious considerations regarding security of energy supply. Currently, Europe imports around 50% of its energy needs. This is set to grow to 70% by 2020. A top priority is how to reduce demand through energy efficiency. The European economy is still very wasteful as a whole, with electricity efficiency being only slightly better than the world average figure of about 31%. This is a disgraceful situation. High-efficiency cogeneration, renewable energy systems, and improvements in energy use can all contribute to better resource deployment.

Fortunately, it looks as though measures are at last being taken to address this wastage – but not without resistance. Europe now has laws that promote renewable energy for electricity production and energy efficiency in buildings – and we are finalizing a law on cogeneration. All of these are essential building blocks for a future energy market that tackles sustainability, reduced environmental impact and long-term security.

Technology and markets worldwide

The key to successful power generation is to maximize the amount of energy produced from a given quantity of fuel – the level of electrical generation efficiency is crucial. It is here that developers of fuel cells think they can improve over existing generation technologies. The use of fuel cells is also likely to reduce maintenance downtime, writes Greg Hoogers in a review of the current status of small- and micro-scale cogeneration with fuel cells.

Power consumers face increasing problems with their supplies, as utilities strive to optimize the return on their capital investment by closing down back-up power plants. This has an important knock-on effect on the power consumer: electricity supplies will become more erratic (black-outs) and more variable (brown-outs, frequency changes, spikes, etc.). All this leads large consumers to invest in back-up generator systems or, alternatively, on-site power generation. This has the additional benefit of allowing the use of heat generated in the process, increasing the overall fuel efficiency by cogeneration, or CHP.

Meanwhile, a large number of companies are working on fuel cell systems that allow the generation of smaller amounts of electricity (1-20 kW range) for domestic or light commercial use. The structure of the potential market differs between countries such as the US and highly populated European countries.

In the US, remote power generation is an issue where grid connections are simply too expensive. The same is true for many developing countries. Under these circumstances, fuel cell systems will enter direct competition with diesel or gasoline-powered generators, possibly as part of a contracting model offered by utilities.

In Europe, there are very few locations where grid connection is not feasible. Here, customers would view a domestic fuel cell system as a boiler replacement with the additional benefit of generating electric power.

Cogeneration and remote power generation will also play an important role in electrifying developing countries. It is here that most of the future growth in power consumption is expected, at a rate which simply will not allow the lengthy process of planning and building large central power stations and a national power grid. In those countries, flexible CHP systems will play the same role for power generation as does the cellular phone for rapidly establishing communication networks.


Fuel cells are electrochemical devices consisting of two electrodes separated by a solid or liquid electrolyte that convert chemical energy directly into electrical energy. The electrolyte gives a fuel cell its name and four different types of fuel cells are currently competing for the stationary power market.

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