Commission proposes development of combined heat and power generation
The European Commission has adopted a communication on the promotion of combined heat and power generation (CHP). The proposed strategy will facilitate the development of CHP and remove barriers to its penetration in the European market as an energy saving and environmentally-friendly system of heat and power production. A CHP plant can convert as much as 85-90% of the energy content of a fuel, compared to only 30-40% when burnt to produce electricity in the conventional process. Simply by channelling the heat produced in creating electricity, CHP more than doubles fuel efficiency. One example of a successful CHP application is the City of Copenhagen, where hot water produced in electricity generation is used for industry or to heat homes, buildings and shops. Currently only 9% of energy production uses CHP. The Commission proposes to double this to 18% by 2010. It sees this target as realistic, and suggests that achieving this would reduce CO2 emissions by 4% of the EU's total emissions. However, while there is scope for action at EU level, the major effort in extending the use of CHP must be undertaken by Member States at national level. The proposed strategy will include the following efforts: - Promotion of CHP as an environmentally-friendly technology, through tax incentives, setting of emission standards for power plants and full transparency in the costs and benefits of different power generation processes; - Increasing the share of funding for CHP under Community programmes such as JOULE/THERMIE, SAVE, ALTENER, SYNERGY, PHARE, TACIS and MEDA and the Structural Funds; - Negotiated agreements, with specific targets, with industrial sectors with high potential to implement CHP; - Exchanges of information and experience between Member States; monitoring of effects on CHP of energy market liberalization; internalization of external costs and benefits through taxation; and the use of financial instruments such as third party financing to help companies invest in CHP.