Combined heat and power (CHP) is set to be an essential contributor to Europe’s energy transition but has thus far been overlooked and undervalued by policymakers.

That was the unanimous conclusion of the non-policymaker speakers at this week’s ‘CHP as a sustainable enabler for renewable energy’ event in Brussels, part of Sustainable Energy Week (EUSEW17).
Sustainable Energy Week EU

Organised by the Belgian cogeneration association Cogen Vlaanderen and industry trade group COGEN Europe, the event brought together energy sector professionals and policymakers for a day of presentations and spirited discussion. 

Jean Pierre Boydens, Cogen Vlaanderen’s managing director, perhaps summed up the prevailing mood best, telling Decentralized Energy that the ideal outcome of the day’s event would be to make it “clear to the European community” that with the transition to an energy mix that includes increasing numbers of intermittent renewable energy sources comes “a high need to develop a system of how we will provide the complementary energy”.

“The problem is that, at the moment, people think the way [more renewables] could be realised is with demand-side management or batteries, but unfortunately this is not the solution we need for the ‘problem’ we want to tackle, because the ‘problem’ is a question of much longer periods of time,” he explained.

“In real life, these periods of low renewable output are between 10 hours to 10 days, and you cannot stop using your washing machine for 10 days. Over the whole year we have this fluctuation in the average availability of renewable energy, and then periods of no availability at all, and sometimes high availability for quite long periods. That means we have to look for other solutions.

“Of course in Germany, exercises are being done in power-to-gas and power-to-heat to tackle moments of high renewable electricity production – that’s an important point – but we also have to find a solution for the much more important periods when there is no production.

“You cannot solve a multi-day period of low renewable production with demand-side management,” he added. “Cogeneration is the most efficient way of using a fuel, and the best complementary technology to renewable energy.” 

But Augustijn Van Haasteren, senior policy officer for wholesale electricity and gas markets at the European Commission, said he wanted to “make sure you understand” that “markets and market design do not come in isolation, but are in fact part of a larger package of how the energy sector will develop and how we will achieve those goals”.

On how Europe’s proposed electricity market reform would treat CHP, he said, “of course we are moving to a world where technologies which have been around for some time and are suitable for our objectives have to find a place, but they have to find a place in a market context. The Commission doesn’t say ‘Now we will have 50 per cent micro-CHP’; instead we have to create an environment where investors have the best chance to do so.”

In terms of Europe’s binding energy efficiency target of 30 per cent by 2030, Van Haasteren said the Commission would “focus on the building sector first of all” in terms of energy consumption and eco-design. Recent revisions to the Renewable Energy Directive aim to create confidence for energy efficiency investors, tap into the potential for heating and cooling, encourage cost-effective deployment and strengthen the sustainability of bioenergy.

In addition, he said the recast legislation would “take away regulatory exemptions for specific technologies so we are making sure that if somebody invests, it’s done within the context of a project – this applies to renewables, CHP and domestic resources.”

He added that the Commission would “build secondary legislation to improve the balancing markets, to make sure they reflect the actual value of electricity”. It also aims to “provide an incentive for those assets which can be flexible through an incentive mechanism for them to make the investment to do so”. 

Demand response “has been developing in the past few years,” he noted, but the legislative framework “for that to develop is not perfect”. He said the Commission aims to “create a business case for aggregators to sell to the community”. 

“In our predictions, these measures mean the investability of the market will strongly improve, and under normal conditions the market will be able to support these investments,” he concluded.

Other presenters offered country-based case studies, such as Dan McGrail of the UK’s Association for Decentralised Energy, who said CHP “can and should be considered as a backbone of an advanced energy economy” and that it “adds value from a system-wide point of view”.  According to McGrail, the UK needs 25 GW of new dispatchable capacity by 2030 and the ADE has identified the potential for 15 GWe of CHP by 2025.

He said CHP, which currently meets 6 per cent of the UK’s energy needs, is “an undervalued part of the energy system” given its potential. And he noted that business energy costs in the UK have risen by 119 per cent, creating “an opportunity – and almost a requirement – for CHP”.

And Adi Golbach of Germany’s KWKKommt said his country’s target of installing 120 TWh of CHP by 2025 “doesn’t look like it will be reached now”, despite the inclusion of a tender process for projects between 1 and 50 MWe in the new CHP law. He said the planned annual CHP tender volumes (50 MW in 2018 growing to 65 MW in 2021) are “much too low to reach the target”.

Like McGrail, Golbach concluded that “the role of CHP has been devalued” in Germany, with targets reduced to “significantly below its economic potential” and the outcome of the tender process “doubtful”.

“Wind and solar do not provide security of supply,” he added, and “battery storage will not contribute a significant share”.