16 May, 2002 – The Combined Heat and Power (CHP) Association has reacted to the release yesterday of the UK government’s draft strategy on CHP production by describing it as, “too little, too late.”

The Department for the Environment, Food and Rural Affairs (Defra) published a set of proposals to help make CHP generation more viable and said it aimed to have 10 000 MWe of Good Quality CHP capacity in the UK by 2010.

But David Green, chairman of the CHP Association rounded on the government for taking five years to deliver on its promises for CHP, during which time there has been a marked reversal in the industry’s fortunes in the UK. “In 1997 the Government committed to creating a new CHP strategy and launched a major campaign to convince more companies to put CHP to work. Five years on and orders have dried up, redundancies have set in and all the major CHP suppliers have disbanded their CHP development teams,” said Green.

Green pointed out that the government had a manifesto proposal to double CHP capacity and up until today, had only delivered rhetoric. “We welcome these long-awaited proposals but fear they are too little, too late,” said Green.

Launching the strategy, Environment Minister Michael Meacher said, “The CHP strategy will play a significant role in the Government’s sustainable energy policy, which brings together economic, social and environmental objectives within a competitive market framework. Key measures in the strategy include complete exemption for Good Quality CHP from the Climate Change Levy (subject to State Aids clearance) – worth £25m per year now, rising to £25m by 2010 – announced in the Budget.”

CHP is to have wider eligibility to Enhanced Capital Allowance, a £50m Community Energy Programme, a reduction in VAT for grant funded domestic CHP installations and a range of other measures.

The CHP Association called on the government to quickly implement the proposed exemption from the Climate Change Levy and to act now to reform the New Electricity Trading Arrangements (Neta), which has caused the output of CHP plant to decline significantly.

Only one new significant CHP scheme has been announced in the UK in recent years. The success of the 730 MW Conoco co-generation facility planned along side its Humber refinery is dependent on the absence of a Climate Change Levy and the reform of Neta as it impacts CHP.

It also is lobbying for a ‘CHP Commitment’, similar to the renewable Energy Commitment already in place – obliging electricity suppliers to source a certain amount of CHP production. It also demanded corrective legislation, which erroneously imposes the full costs of the renewables obligation on CHP schemes.

Combined Heat and Power (CHP) is the simultaneous generation of heat and power, usually electricity, in a single process. CHP is a highly fuel-efficient technology, which is making a valuable contribution to carbon abatement in the UK. It is also known as co-generation.