Ending stagnation in Europe?

Stagnation is the word used by trade association COGEN Europe to describe the status of cogeneration in Europe over the last few years. Despite a now 15-year old EU target to double the use of CHP, from 9% of total generation capacity to 18%, the latest available statistics (from Eurostat, for 2012) show a slightly increased installed electricity generating capacity, from 106 GW to 109 GW between 2011 and 2012, but a marginally decreased amount of electricity actually generated (from 375 TWh to 373). The share of total electricity generated remained almost constant at 11%.

Stagnation may be too strong a word. An alternative view is that, in contrast to some other technologies, cogeneration is holding on to its market share despite the very considerable growth of renewables. Where decades-old schemes are being retired, new capacity is being installed in its place. And cogeneration is moving with the times ” much of the new capacity is fuelled with biomass or other biofuels.

COGEN Europe continues its work to influence EU energy policy to ensure that cogeneration plays its part in meeting all three of the security of supply, competitiveness and environmental objectives. Most recently, the association has laid out how cogeneration could improve the competitiveness of Europe’s industries ” around half of Europe’s cogeneration capacity is embedded in industrial sites.

The association has now been joined by Eurelectric, the trade association for Europe’s wider electricity generation and distribution industry ” not always a natural ally. Introducing a new paper on cogeneration, Eurelectric goes further than describing CHP’s status as stagnant: ‘conflicting policies and the economic downturn are causing a decline in CHP and smarter policies are needed if CHP is to fulfil its potential.’

The paper addresses a familiar list of objectives, led by a call to strengthen the EU Emissions Trading Scheme (ETS) as the key driver towards decarbonisation of the power sector. CHP’s high efficiency and low emissions should ensure its benefits from a much stronger ETS, particularly if the scheme was extended from electricity to the heating sector.

The need to reform and strengthen the ETS to benefit all low-carbon technologies has been apparent for a long time ” the whole system has been staggering under the weight of an oversupply of emissions allowances due to lower-than-expected energy demand since the start of the economic collapse in 2008.

Eurelectric also recognises CHP’s potential role in making electricity markets more flexible and able to adapt to decarbonisation, including the growth of intermittent generation from renewables. Barriers to the participation of the aggregated flexibility from smaller CHP plants should be removed, says the association.

Last, Eurelectric suggests a point on taxation that would benefit the whole fossil fuel generation sector: ‘The different levels of taxation across EU Member States undermine the EU’s objective of creating a European-wide internal energy market. Power generators in the EU, including CHP plants, need to be able to compete on a level playing field. For this reason electricity should be taxed at the point of consumption,’ says the association.

Whether cogeneration is actually in decline in Europe right now we won’t know until the statistics catch up. But fixing the ETS in its favour would be an important step towards putting the high-efficiency technology back on track.

Steve Hodgson à‚  Steve Hodgson
Contributing Editor

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