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ORGANISATION FOR THE PROMOTION OF ENERGY TECHNOLOGIES

Combined Heat & Power/ District Heating Results of activities 2003-2005

2005 Reproduction is authorised provided the source is acknowledged. distribution and consumption (excluding nuclear energy) by promoting the use and exchange of information on new technology in the marketplace. both in terms of energy supply and demand management. Belgium) with the technical assistance of Motiva Oy. © European Community.opet-chp. Most consumption is derived from fossil fuels . 9. Member State and regional levels. 18. support to the OPET Network 2 3 . The OPET Network was restructured in 2002 around a series of Thematic Consortia to provide an integrated and comprehensive view of on-going research and to further innovative technologies deployment. accelerating innovation of renewable energy sources (RES) and the rational use of energy (RUE). depleting natural resources and contributing to global climate change. which provides a summary of the promotion and dissemination actions undertaken betwen 2003 and 2005 in emerging sustainable energy technologies. The OPET Thematic Consortia: Micro and small-scale CHP (M/SSCHP) 12-15 1 2 3 4 CHP Directive Technology Financial incentives Market potential Biomass CHP 16-17 1 2 Present use Actions to overcome market barriers China: CHP and trigeneration 18-19 Further information: http://www.much of it imported from outside Europe. significant changes of behaviour are required now. 5. pointing the way towards more intelligent energy use in Europe. Printed in Belgium on Biotop Photo Credits: Motiva OY (Cover. The CO-OPET partners in cooperation with each Thematic Consortium have issued a Consortium brochure. Ever-increasing energy consumption is one of the greatest challenges facing Europe and the world today. When the EU signed the Kyoto Protocol. To meet this commitment. supporting and implementing European policy priorities at EU. established by the European Commission. 16. aimed at the valorisation and integration of R&D results. through increased greenhouse gas emissions. with the financial support of the 5th RTD Framework Programme. it promised to reduce these emissions by 2012. nor do they accept responsibility for any use made thereof.net Legal notice: This publication was produced and published by PRACSIS (Brussels.Contents Context Context 3 Eight reasons to promote Combined Heat & Power/District Heating(CHP/DH) 4 OPET CHP 5 Legislative context 6 CHP/DH in Central/Eastern European Countries (CEEC) 7-11 1 2 3 4 5 6 7 Organisational framework Price regulation and taxation Support and promotion mechanisms Legislative and regulatory measures Energy planning Benchmarking Financial options for CHP/DH investments The Organisation for the Promotion of Energy Technologies (OPET) Network. managed by the Directorate-General for Energy and Transport and represents those organisations' views on the subject matter. seeks to enhance sustainable energy production. by 8% in comparison to 1990 levels. 19) Photodisc-Shutterstock • Buildings • Electricity generation from renewable energy sources (RES-e) • Combined heat and power / District Heating (CHP/DH) • Clean fossil fuels (CFF) • Energy issues in transport • New energy technologies in the Mediterranean region (MEDNET) • Modern and clean energy and transport technologies in Latin America and the Caribbean (OLA) • Early market introduction of new energy technologies (EMINENT) and • CO-OPET. Some product and company names mentioned in the publication are trademarks or tradenames of their respective companies and are protected by international law. Neither the European Commission nor the publisher guarantee the accuracy of the data included in this publication. The resulting efficient knowledge transfer benefits all European citizens.

Traditionally. 7 Supply security and market benefits By substantial fuel savings and the wide range of different fuels utilised. They can be switched to a reserve fuel source as needed. so use tends to be local which matches CHP's local nature.Eight reasons to promote Combined Heat & Power/District Heating (CHP/DH) OPET CHP 1 Conformity with European energy policy CHP is one of the primary means for the EU to achieve its energy policy objective of improving energy efficiency and its environmental policy objective of reducing greenhouse gas emissions. and a cost-effective energy source. 3 High thermal efficiency Plants achieve a total efficiency between 80 and 90%. Natural gas and biofuels can largely be used as substitutes for coal and oil. supplying around 10% of electricity generated and heat demand. usually only as a supplement. such as industrial wastes and biofuels. industrial waste. 30-40% higher than separate production of heat and electricity. The coordinating partner was the Danish Technological Institute. 4 Lower environmental impact The high efficiency of the CHP plant leads to lower fuel consumption. Primary energy consumption in CHP is lowered by approximately one third. wood and peat. CHP significantly contributes to reducing the dependency on foreign energy supplies (50% now and 70% in 2030 based on current trends). Systems can operate for at least 20-40 years. 5 Fuel flexibility A wide variety of fuels can be used. CHP applications are an ideal use for biofuels. 8 Economic benefits CHP facilitates through generation plant diversification. The 14-month project included a large range of activities at national and international level as well as specific national partner actions. The fuel mix used in CHP plants will change considerably. In conventional condensing power plants the efficiency remains at around 40%. small in size and processes can utilise a wide variety of fuels. 4 5 . mainly in connection with forest industry processes. equivalent to 300 million tonnes CO2 per annum). 6 High availability CHP plants have high availability levels enabling uninterrupted energy production. (The Kyoto Protocol requires an EU greenhouse gas emission reduction by 8% by 2008-2012 from1990 levels. The project Consortium consisted of thirty-two partners from twenty-two EU and Central and Eastern European countries and China. efficient and renewable energy technologies • Improvement of industrial energy efficiency The project results are presented on the project website www. Fuel cells offer the opportunity for higher levels of power-to-heat ratios. dispersed EU wide. CHP plants are better maintained and operated than in-building systems. The activities were organised in Work Packages addressing specific objectives: • EU CHP Directive information provision and knowledge transfer • Support to CHP development in Central and Eastern European countries • Support for market uptake of small scale CHP • Promotion of further use of biomass for CHP • Promotion and support of Chinese market penetration by EU clean. The Commission estimates that doubling the amount of CHP electricity will allow the EU to meet half of its CO2 reduction commitment. not only from carbon dioxide but also from sulphur and nitrogen oxide emissions. Local CHP generation can reduce the risk of power and/or heating outages. biomass fuels have been used in CHP generation. For many reasons. natural gas. The OPET CHP Consortium aimed at promoting technical improvements and market development tools and thereby supports further use of efficient CHP/DH technologies within the EU policy framework. Oil is used sparingly. which consequently reduces the burden of energy production on the environment. Increasing DH use is essential for moving from the present 9% to 18% of EU electricity generated by CHP. Plants are often local.opet-chp. including those with a low calorific value and high moisture content. competition in generation and liberalisation of energy markets in general. Biofuels transport is costly given their low calorific value. Heating consumes more energy than any other use. The most commonly used fuels are coal.net 2 Reliability CHP is a proven and reliable technology.

in Bulgaria. most DH companies are state owned. Furthermore. Annex 2 implementation guidelines for the calculation of CHP electricity. Latvia. Organisational framework In most CEEC. 2 1 Other relevant legislation Cogeneration Directive . The DH market share varies from 16% in Hungary up to 70% in Latvia. homeowner interests are also nationally represented. National surveys on the current CHP/DH situation from a policy. Estonia. the price covers the development. The activities included studying the policy framework conditions and the current sector situation. The objectives were to develop and further promote appropriate tools and measures to overcome barriers for improvements in these sectors and to provide key market actors with increased understanding of the problems related with upgrading and modernisation of the existing systems and the possible solutions to these problems. 2 6 7 . DH has the highest market share . Romania and Lithuania. The Directive specifies: • • • • Harmonisation of CHP definitions Establishment of EU wide efficiency values Micro and small scale CHP (M/SSCHP) A Guaranty of Origin of CHP Electricity scheme framework • An obligation for Member States to ensure objective.in some cases exceeding 75%. (Latvia. local government plays a key role in the DH and CHP sectors through ownership. the homeowner associations have an important role whereas in Bulgaria the representation is through the consumers' association. in some countries. A number of criteria are set for an obligatory analysis of the national potential for high efficiency CHP (including M/SSCHP). Specific national circumstances. to some extent.COM 30 (1997) Price regulation and taxation Independent regulatory bodies have been established in all CEEC. However. Czech Republic. tariff criteria and administration. The Directive in the short-term supports existing CHP installations and creates a level playing field in the market. District heating has a long tradition in Central and Eastern European Countries and has a large share in the heating market. sector and company perspective in CEEC provide a comprehensive overview of the existing framework and conditions and highlight the important barriers to development and improvements. In Estonia. privatisation and public and private partnerships are becoming more common in most CEEC to attract financial resources for system reform and refurbishment. The regulatory body that approves DH tariffs acts at national level. transparent and non-discriminatory procedures for grid access. environmental protection costs. modernisation and. especially climatic and economic are taken into account. including harmonised reference values for separate production have been issued.91 (2002) Taxation of Energy Products Directive . In some countries. In the residential heat market (population related) it represents about 38%. Poland. In Bulgaria. away from a cost basis derived from operational costs alone. Tariff setting has moved towards full cost reflection. significantly higher than in the EU-15 countries (7%). Leasing. Poland) municipal regulatory bodies exist alongside state bodies.COM 304 (2002) Energy Performance of Buildings Directive . sectoral associations are quite active at national and European level. Lithuania. The medium and long term intention is to ensure that high efficiency CHP is considered whenever new capacity is planned. The Directive seeks enhanced energy efficiency and improved supply security by creating a promotion and development framework of high efficiency cogeneration of heat and power based on useful heat demand and primary energy savings in the internal energy market. Price setting and subsidy still face some challenges. In most countries.COM 581 (2001) New Electricity and Gas Directive . Support schemes based on useful heat demand and primary energy savings may be continued or established in the Member States to support the realisation of the potential.COM 415 (2002) Emissions Trading Directive . Necessary steps for further development of the CHP/DH sector were identified and investigated.Legislative context CHP/DH in Central/Eastern European Countries (CEEC) 1 CHP Directive EU Member States have two years to implement the EU Directive on the promotion of cogeneration based on a useful heat demand in the internal energy market (2004/8/EC ) into national legislation following its publication in February 2004. Estonia. Romania and Slovakia . Recommended tools and measures for CHP/DH sector improvement in Central and Eastern Europe The work focused on supporting development towards improvement of the economic and environmental performance of the district heating and cogeneration sectors in the CEEC partner countries covering Bulgaria. Each Member State must report to the EU regularly about the progress in achieving CHP potential and CHP promotional actions. for example. a series of pilot projects were initiated and case studies were investigated to show the application of the tools and measures in practice. In cities. In Poland.

international financing bodies have played a catalytic role.CHP/DH in Central/Eastern European Countries (CEEC) 3 Support and promotion mechanisms R&D activities have been limited. Other Directives influencing energy sector development are the Directive on Energy Performance of Buildings and the Energy Service Directive. The DH rehabilitation and modernisation financing mechanisms range from direct government support to third-party financing and capacity leasing. The liberalisation degree varies. Usually a joint financing model is used. In particular. and coordination by a DH association or third-party organisation. In the gas market. To this end. including combined heat and power. 8 9 . and at the same time high reliability of energy supply and a minimum impact on the environment. introduction of CHP unit. the process lags behind due to sector specificities and monopoly structures. The Directive on Emission Trading encourages the use of more energy efficient technologies. being often associated with the privatisation process. Latvia and Hungary. Most countries passed an overall Energy Act providing for sectoral legislation. The Directive on the Promotion of Cogeneration creates the framework for the support and promotion of CHP based on useful heat demand and primary energy savings. feed-in tariffs are used in Bulgaria. Benchmarking implementation requires cooperation between the companies. since in most cases the issue of rate of return is critical for obtaining finance from commercial banks and private investors (the two major sources of funds). the national support schemes have benefited from international finance. Promotional activities One of the barriers to CHP/DH market development is lack of knowledge and awareness. Other barriers to overcome are underestimation of the need for qualified assistance and proper project development and costs. Efficient planning allows both optimisation of expenses at the national level and introduction of competition between different energy utilities at the planning level. the Energy Efficiency Funds in Bulgaria and Romania have been established with World Bank and European Bank for Reconstruction and Development (EBRD) financing. Most countries strongly support CHP generation development. 7 Financial options for CHP/DH investments A cross-national review of financing opportunities has been made to facilitate future energy efficiency and CHP project implementation in the CEEC. The legislative framework focuses on: • Energy market organisation and rule formulation defining energy sector business activities • Energy sector restructuring • Reorganisation and privatisation • Increased energy efficiency through technological innovation 5 Energy planning Energy planning is a focal instrument to enable the development and operation of the energy sector with minimum expenses. averaging about 30%. 4 Legislative and regulatory measures Legislative initiatives of the European Union present certain requirements for the development of the energy sector in the CEEC. Private sector investments have an increasing importance. Estonia replaced the overall Energy Act by sector specific Acts. Most commonly retrofitting of existing large DH networks with big capacity needs substantial investment. Estonia. and by size. However. upgrade and refurbishment of DH networks (pipelines and substations)). the CEEC have developed a relatively extensive energy legislation framework with a sectoral approach. The CEEC. except Bulgaria. Different support schemes are usually used as complementary sources of funding. have started electricity market liberalisation in line with EU Directives. Energy efficiency projects in DH companies can be divided by type (retrofitting of production site. This can be in different countries. 6 Generally. For example. In many cases. and Poland has just one overall Energy Act. Research financial resources are limited and the resources from donor countries are used for DH system development and refurbishment. Financing of energy efficiency and CHP projects in DH companies is dependent on legislative and regulatory frameworks developed in different CEEC. DH system rehabilitation and in EU project participation. introduction of CHP plants. Potential users and investors are not aware of CHP advantages. The activities have been focused on strategy development. Benchmarking Benchmarking permits the comparison of any DH company's technical and economic parameters with other companies. price and tariff incentives and preferences for CHP can influence the profitability of CHP introduction projects. In some cases. Financing issues are of common concern but the specific problems vary depending on the size of the company and the national location.

KAPE (Polish National Energy Conservation Agency) set up an Energy Planning Secretariat (EPS) whose main aim is to develop conditions for the implementation of a national energy planning training scheme and dissemination of methodology and experience gained during the main project. there are problems related to the experience in preparing development plans regarding gas and heat supply • Absence of time limits and sanctions results in low budgetary priority for executing planning and implementing improvement measures • Data collection was very time consuming. The project was coordinated by a Steering Committee with representation from the Danish Energy Agency. The project contained stakeholder analysis. social and technical issues at the local level and to prepare a set of materials helping the authorities make decisions concerning these processes.gov. A status report for the DH system was prepared including hydraulic analyses of the network. Energy planning was demonstrated as a means to balance both short-term and long-term development goals of reliability of supply.support to decision-makers project's main aim was to support community energy planning implementation according to the Polish Energy Act. environmental sustainability and economic efficiency. An analysis of the CHP option was elaborated. An important element of the feasibility study is a Polish electricity market analysis. Main issues for all three components were training. At the same time. diversification and flexibility at less cost.kape.pl/EN/Programmes/Programme s_Bilateral/SPE/index. The following conclusions were drawn: • At the local level. This can be achieved by efficiency. subcontractors being PEPRC (Power and Environment Protection Research Centre of the Warsaw University of Technology) and COWI Polska. The need for re-engineering the major heat consuming processes at the factory was identified in order to improve the future CHP schemes. Energy Department. knowledge transfer relating to planning as well as managerial know-how and experience dissemination. toolbox elaboration and energy planning in selected municipalities. The possibilities of joint implementation financing were investigated. The main contractor was the Danish company.CHP/DH in Central/Eastern European Countries (CEEC) Project example Energy planning in Poland at municipal level The Energy planning at municipal level . the Polish Bureau for Housing and Urban Development and the Polish Ministry of Economy.phtml 10 11 . COWI (Consulting Engineers and Planners AS). Myszkow energy audit project: the project comprised a detailed energy audit of the paper mill to investigate the optimisation of paper production and a more energy efficient electricity and heat production. a suburb close to Warsaw • Myszkow in southern Poland. Three municipalities were selected as model municipalities: • Bytow in northern Poland • Legionowo. More information: www. The initial project and the two follow-up projects in Legionowo and Myszkow have resulted in creating a group of Polish municipalities experienced in implementing the planning procedure and a replicable toolbox useful for energy planning by other municipalities. The specific project goals were to explain political. The Government of Denmark financed the project under an agreement between the Danish Ministry of Environment and Energy and the Polish Bureau for Housing and Urban Development. Analyses will be made on the consequences of increasing the heat supply from the mill to the greatest extent (meeting up to 90-95% of the district heating demand in Myszkow). The following was recommended for the three model municipalities: • the planning processes initiated during the project should be continued • DH master plans should be prepared in each municipality • An energy audit of the Myszkow paper mill should be carried out Follow-up project Legionowo CHP plant: the project comprised master plan preparation for the Legionowo DH system including a more detailed analysis of the possibilities of a major natural gas fired CHP plant.

In Slovenia. In some countries. which increases M/SSCHP profitability remarkably. there are support schemes addressing M/SSCHP in particular. Micro and small Scale CHP. Although the M/SSCHP technology is available. Legislative support measures comprise the obligation of the grid operator to purchase cogenerated electricity. fuel cells and exhaust gas purification systems. cogeneration or decentralised energy. technology availability is an important condition for M/SSCHP promotion. Objectives of these schemes are usually promotion of climate and environmental protection or SME development. M/SSCHP owners profit by the trade in green and cogeneration certificates. Measures like CO2 tax and green and cogeneration certificates could also increase M/SSCHP profitability. declining heat demand and low prices for electricity produced in amortised big power plants.net) 12 13 . Given higher investment costs per kW installed capacity. Estonia has a fuel cell research centre. economic and technical barriers. In Flanders (Belgium).s c a l e C H P ( M / S S C H P ) Promising small scale power generation concepts are under development to ensure efficiency and environmental performance. maintenance. Belgium and Austria. planning. where in 1997 a CO2 tax on fossil fuels was introduced. Innovative technology such as Stirling engines. Most countries support cogeneration by obligating the grid operator to purchase cogenerated electricity and some type of remuneration model.M i c ro a n d s m a l l . Basically the same support mechanisms as for medium and large scale cogeneration apply in all countries. Nevertheless. An exception is Germany. national or regional financial support schemes. Gas engines are most common. such as the Austrian Kommunalkredit under the Environmental Support Scheme. However. there are only a few cogeneration units with a capacity of 1 MW and less in most of the European countries. 1 Legislative support Almost all European countries have enacted specific legislation for energy efficiency. Cross-National Report by berliner Energiagentur (www. Support is offered in the form of soft loans. for instance under the Greek operational Programme for Competitiveness. Modernisation and Development of Combined Heat and Power Act. financing. Similar systems will be introduced in Bulgaria in 2007 with the new Energy Regulation which is currently under preparation. 3 Financial incentives In addition to the legislative support. bonus payments for cogenerated electricity as well as subsidies/ preferable tax treatment for CHP fuels. installation. Germany and Spain where M/SSCHP technology is widely applied. The energy sector structure is far from beneficial for M/SSCHP in most countries with vertically integrated energy companies. fuel cells and microturbines provide CHP packages for individual homes. fourteen partners of the OPET CHP/DH cluster focused on compilation and exchange of information on the status quo and framework conditions for the use of M/SSCHP. The spectrum ranges from countries like Bulgaria. Some legislation includes quantitative targets for cogeneration. Very few countries have introduced mechanisms for the internalisation of external costs. where the extension of small-scale CHP installations and the introduction of fuel cells are listed among the objectives of the Conservation.opet-chp. Greece and Estonia. Most policies and legislation do not even mention small-scale CHP and its promotion. there are no specific targets for micro and small-scale CHP in national energy policies. there are hardly any targets and only a few support mechanisms specifically for M/SSCHP. engines. M/SSCHP should be considered as a cost-effective solution for replacing obsolete and often oversized large-scale heat and power plants. fuel cells or micro-turbines are available only in a few countries such as Germany. Sometimes regulations support centralised CHP solutions excluding M/SSCHP. Investment cost support schemes exist in most countries. Austria subsidises 30 % of the costs for M/SSCHP equipment turbines. in most of the countries only very few units have been installed due to a variety of legislative. Belgium. 4 Market potential M/SSCHP offers solutions for a wide range of applications. in many countries M/SSCHP is thus not considered profitable under this legislative framework. M/SSCHP owners benefit from the higher efficiency and thus reduced tax burden in comparison to separate production. Nevertheless. The biggest market is Germany with almost fifty companies offering M/SSCHP services such as operation. in many countries investment for M/SSCHP is supported under international. investment costs for M/SSCHP units are subsidised by grants. consultancy and turn-key installations. Last but not least. Often. Only some countries promote fuels for cogeneration. Total installed M/SSCHP capacity in selected countries Promising M/SSCHP applications 2 Technology Apart from a promotional energy policy. where SSCHP as a decentralised solution for heat and electricity production is just starting to be implemented to Austria. and information dissemination to support M/SSCHP project development. existing promotion measures and technical know-how need to be communicated to potential users. In order to promote M/SSCHP. Stirling engines. * approximation / estimation * especially in combination with cooling applications Source: CHP/DH Cluster: Work Package 2. M/SSCHP needs further promotion at the legislative level with special regulations and schemes for small appliances.

sauna landscapes and hot water for catering services lead to an increased heat demand even in summer.opet-chp. Stirling engines and fuel cells are not yet used in most countries. swimming pools. M/SSCHP is also used for district heating. hot water and space heating requirements of the two building complexes. Tagarades (GR) and Liosa (GR) landfill sites show. During the transition in the early nineteen-nineties.s c a l e C H P ( M / S S C H P ) Best practice applications The OPET CHP partners have reviewed existing M/SSCHP units in their countries and compiled best practice descriptions of typical M/SSCHP applications: hotels. good examples of profitable M/SSCHP applications are sanatoriums such as the hospital rehabilitation centre in Palanga (LT) and the San Eloy Hospital (E) and sport centres such as Zumaia (E) with a high demand for heating and hot water throughout the year. the reduced consumer cost for hot water and electricity and the municipal budget benefit due to third-party installation financing are only a few of the advantages. Due to constant heat demand for space heating and production processes.M i c ro a n d s m a l l . but an energy service company which has planned and financed and now operates the small cogeneration units at their own risk. The examples of the SSCHP installations in the Pääsküla (EE). the Municipality of Adazi (LV) experienced an industrial and agricultural decline. Similarly. The better performance of the technology. Apart from heat demand for hot water and space heating. how nearby municipalities can be supplied with heat whereas the cogenerated electricity is fed into the grid. where heat is used for drying wood and cogenerated electricity covers part of the factory's consumption. condensing boilers and the M/SSCHP plants were set up in an energy efficiency project framework. agriculture. In Germany. The cogenerated electricity is fed in to the power grid of two housing blocks. Other examples of industrial M/SSCHP use are the small scale CHP use in a Bulgarian textile factory as well as in Slovenian poultry processing and sport equipment plants. in order to prove that long maintenance intervals and less emission make this technology an attractive alternative. The latter can be particularly profitable if electricity produced by landfill gas-fired cogeneration plants is remunerated according to special green electricity tariffs as it is in Estonia. there are innovative technologies in the test stage. For example. the Municipality decided to outsource heat production. To reduce energy consumption for space heating and hot water. With the advantage of turning waste into usable energy and decreasing greenhouse gas emission. An example is a furniture factory in Azpeitia (E). industry offers another interesting application. The residential sector M/SSCHP use is not yet developed in most countries. Apart from all these decentralised applications. Innovative technologies such as micro turbines. landfill sites. Essent Balitic started to run a SSCHP heat supply system and the cogenerated electricity is delivered to the grid. One of the few examples is the micro-CHP in social housing blocks with nineteen dwellings in Herenthout (B). hospitals. Another example of innovative technology use is two fuel cells developed for multi-family houses in the German cities of Brake and Oldenburg which cover the major part of the electricity. residential buildings. Given the outdated technology and over capacity. The examples of small co/trigeneration in shopping centres in Berlin (D) and Celje (SLO) demonstrate M/SSCHP in commercial and office building centres. The Hotel Almesberger (A) and Hotel Bankya Palace (BG) cases show that hotels are a profitable application of M/SSCHP units. a Stirling engine is being tested by the district heat and electricity provider of the City of Kiel. particular needs such as spa treatments. industry. where there is no feed-in tariff for cogeneration in general but only for electricity produced on the basis of renewable energy sources. 14 15 . Both are also examples of third-party financing models: it is not the centre owner. greenhouses and district heating.net . Case studies are available at www. landfill sites are an M/SSCHP application with added ecological value. laundry. commercial and office buildings. thermal collectors.

to biomass CHP • Privilege of natural gas. Africa. The CHP share in DH production is rather high in most countries. Scotland. case project descriptions. People who attended the study tours and seminars came from approximately twenty-eight countries in Europe. Lithuania and Sweden whilst. raising awareness of bioenergy as a commercial and environmental opportunity. connected with the use of biomass resources for CHP and DH purposes. training. Countries producing a rather high share of their DH by biomass are Finland Austria. advice and reports. The Netherlands' DH uses 99% fossil fuels and Slovakia and Slovenia do not use biomass.Biomass CHP 2 Biomass technologies are considered as one of the options with the highest potential to contribute to reaching the RES targets by 2010 for a number of fundamental agricultural. The key aim was to bring the needed expertise together in order to exploit possibilities for market penetration. oil and electricity • Broad category of biomass CHP technologies varying from micro-scale to large-scale production • A rather strong position of industrial CHP. Sweden and the Netherlands. The work then concentrated on exchanging experiences and latest innovative technologies in biomass district heat and CHP including the whole production-utilisation chain. Study tours included visits to biomass supply sites and plants and were supported by training actions and descriptions of twenty-nine best practice case projects. Finland. New member countries have DH and CHP but mainly using fossil fuels. articles. for example.e. i. The whole biomass utilisation chain has been the subject of study tours in Finland. Some partners have only limited biomass DH and CHP experience. Scotland. Finland concentrated on large scale and woody biomass. Study tours and training actions have been successful. Investors in innovative biomass technologies gave details of their experience at these events on: • biomass bundling technology • biogas micro turbines • biomass co-firing in large-scale CHP plants Website and journal publications also resulted. the Netherlands.net/chpbiomassswot. Lithuania. Actions to overcome market barriers The partners compiled an up-to-date summary of the major barriers and existing policy and financial measures used in partner countries relevant to the development of biomass CHP/DH technologies' further market penetration. whilst the seminars gathered more than 1800 participants interested in both biomass DH and CHP. The goal was to bring different stakeholders together to exchange information and experience with study tours. oil or natural gas to biomass in existing CHP/DH systems • Legal framework that promotes CHP and biomass usage • High potential of Biomass CHP in terms of contribution to RES targets and the strong position of fossil fuels • Low availability of finance • Lack of standards for definitions and activities • Centralised energy generation systems • High costs • Uncertain prospects on the CHP market development • Immature biomass market • Lack of efficient distribution channels • Dependency on policies 1 Present use Biomass CHP/DH technologies implementation varies significantly among countries involved (Austria. Weaknesses • Low acceptance and awareness of DH due to history Opportunities • RES promoting national and EU legislation: RES are and will be continuously promoted • Increasing price of natural gas. Poland. Lithuania. but natural gas is predominantly used as a fuel. Around 250 participants attended the study tours. Poland. Hungary. and the related technologies. OPET CHP/DH Cluster focused on the whole supply chain. seminars. opportunities for fuel switch. Austria and Sweden. Slovakia.asp 16 17 . Slovakia.opet-chp. Slovenia and Sweden). coal and oil Threats • The present process of liberalisation of the energy sector may lead to a (temporary) hesitance towards new investment projects • Falling prices of electricity • Changes in taxation or policies for subsidies • Spreading the gas networks into areas that have biomass potential • Failure of deployment of new technologies Source: www. International and national seminars were organised in Austria. whereas Sweden and Austria concentrated on small-scale biomass and biogas technologies. Finland. 2003) Biomass CHP/DH SWOT analysis Strengths • CHP and DH have a long history and so they are well known and developed • CHP technologies enable the fuel switch from coal. Denmark. Biomass and waste input compared to total fuel input for thermal power generation in partner countries (European Communities. Asia and South America. industrial and economic reasons.

Coal is a large part of the energy mix. CHP is used for residential central heating in northern cities. among other factors.874. events for dissemination etc. Many self-provided cogeneration plants exist in energy intensive companies. 60% of central heating in urban areas is produced by CHP. In the context of sustainable energy development and environmental protection. advanced technology and equipment manufacture. Up to 2001. cogeneration plants are important for energy providers in southern China. There are difficulties with grid connection due to lack of specific legislative and regulatory provisions for operation and poor economic performance as a result of higher gas prices and environmental cost externalisation. unchanged.2 billion m2. In recent years. there are a few pilot projects of gas-fuelled trigeneration carried out in the regions of Shanghai and Beijing. a diversified energy supply.369 TJ (trillion Joule) of heat per year. through exchange and collaboration with EU partners. CHP technology enjoys an important role in enhancing energy efficiency. • Established and strengthened networking among OPET China partners. Future prospects Although the power industry sector is now undergoing reform to liberalise the power market. Legislation and regulations have been developed to promote CHP development. to a certain extent. some equipped with waste heat utilising devices.000 small coal-fired boilers with less than 50% energy efficiency. in terms of study. relations with networks (power grid and gas pipeline) and energy pricing among other factors. designers and potential users are still not aware of CHP/trigeneration advantages. the demand for electricity (for heating and air conditioning) has been increasing. China is one of the largest coal consumers in the world. which are significant for completion of existing projects and development of future collaboration. 18 19 . Hence. and reduction of 65 million tonnes of CO2 in China. has been formed in recent years. the period of space heating and cooling being six to ten months. there was 32 GW of CHP installed capacity (6 MW/per unit and beyond). the shaving of peak power grid load and balancing of seasonal gas pipeline load . its monopoly status remains.China: CHP and trigeneration In China. Advantages of CHP/trigeneration fuelled with natural gas are high energy efficiency. such as petroleum. chemical. barriers on CHP/trigeneration exist: lower public awareness. pollutant emissions reduction. including Shanghai. Furthermore. annual average increment of areas heated within buildings has been more than 200 million m2. the strategic impact of energy efficiency is emphasised as is changing the energy mix through gradual replacement of coal by natural gas and other clean energies. Jiangsu. that of natural gas. Jiangsu and Zhejiang Provinces among others. particularly in the Yangtze River and the Pearl River Deltas among other examples. Other achievements related to OPET projects in China : • Increased awareness of Chinese energy actors on OPET and EU energy policies. there are some oil-fuelled internal combustion engine generators. heating area has grown five-fold up to 1. EU partners as well as Chinese energy organisations and governmental departments. Great success has been achieved with coal-fired CHP technologies. • Increased capabilities of China partners to act as bridges for Chinese actors to EU. The promotion of trigeneration fuelled with natural gas is at an early stage in China. Compared with separate production of electricity and heat. From 1991 to 2001. technologies and best practices. These regions are hot in summer and cold in winter. With rapid economic development and increasing living standards particularly in the property sector. At present. in the Pearl River and Yangtze River Deltas. where many cities forbid direct coal burning. • Extended channels for obtaining and updating EU information and cooperation potential dedicated to the OPET network. industrialists. Key potential future markets for natural gasfuelled CHP/trigeneration are in Beijing and Tianjin. CHP has been mainly used in industrial sectors and for central heating in northern cities. CHP has been developed over five decades.37% of installed thermal power. CHP/trigeneration is not easily accepted by the market. such as Shanghai. Another monopoly. In industrial parks. leading to heavy air pollution. where natural gas supply is available. which accounted for 13. However. incentive policies and instruments. Chinese market actors including government decision makers. and for commercial buildings and industrial use in southern municipalities and provinces. alleviating pollution emissions and improving Chinese urban infrastructure and living conditions. dealing with energy and industry. in the Pearl River Delta. Zhejiang and Anhui along the Yangtze River. particularly power companies and natural gas companies. equipment manufacture and design of CHP systems among others. CHP has contributed to energy savings of 25 million tce (tonne of coal equivalent). metallurgical and light industrial sectors. and 12. There are more than 500.

se .The OPET Thematic Brochures: Results of activities 2003-2005 The collection comprises 8 brochures and covers the following technological topics: • Energy Technologies in the Building Sector • Energy Technologies for the Generation of Electricity from Renewable Energy Sources • Combined Heat and Power Generation (CHP) and DHC (District Heating and Cooling) Technologies • Clean Fossil Technologies Within the Energy Market • New energy technologies and efficiency measures in transport • Mediterranean Cooperation for New Energy Technologies • Modern and Clean Energy and Transport technologies in Latin America and the Caribbean • Accelerating Market Introduction of Promising Early Stage Technologies for Transport and Energy For more information. please contact sonja.ewerstein@stem.