The Cogeneration or CHP Directive

This refers to the ”’Directive on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive  92/62/EEC”’, officially 2004/8/EC and popularly better known as the ‘CHP Directive’

It is a European Union directive for promoting the use of cogeneration in order to increase the energy efficiency and improve the security of supplyof energy. This is intended to be achieved by creating a framework for the promotion and development of high efficiency cogeneration.

The directive entered into force in February 2004 and  member states have been obliged to begin its implementation since 2006. (however due to delays resulting out of the comitology process, member states had to adopt the first obligations of the directive by 6 August 2007.)

It is intended that the directive will have a significant impact on the legislation and the diffusion of CHP /cogeneration and district heating within the member states of the European Union.

In summary, the Member States are obliged to produce reports covering their analysis of the state of CHP in their own countries, to promote CHP and show what is being done to promote it, to report on and remove barriers, and to track progress of high-efficiency cogeneration within the energy market.

Objectives

”’Promotion of cogeneration”’

The objective of the Directive is to establish a transparent common framework to promote and facilitate the installation of ”’high-efficiency cogeneration”’ plants where demand for useful heat exists or is anticipated. This overall objective translates into two specific aims:

•in the short term, the Directive should make it possible to consolidate existing cogeneration installations and promote new plants;

•in the medium to long term, the Directive should serve as a means to create the necessary framework for further ”’high efficiency cogeneration”’, aimed at reducing emissions of CO2 and other substances contributing to global warming.

The provisions of the directive and the framework is intended to be adjustable to take account of technical progress.

”””NOTE:”’ ”’high-efficiency cogeneration”’ has a particular meaning and is defined further down in this article.

Key Requirements to satisfy the Directive

Each member state must evaluate the existing legislative and regulatory framework for implementing ”’high efficiency cogeneration”’, in particular any barriers, both legislative, market failure, grid access,lack of internalisation of the external costs in energy
prices, and administrative.

Each member state must assess their National Potentials for ”’high efficiency cogeneration”’ systems, including high efficiency micro generation.

Each member state must track and report every 4 years on progress towards increasing their share of ”’high efficiency cogeneration”’ to the Commission.

Each member state must report annually what is being done to support ”’high efficiency cogeneration”’ to the commission.

Each member state must encourage ”’high efficiency cogeneration”’.

Each member state must develop a national system of “Guarantees of Origin” commonly referred to as GO certificates, which will indicate the quantity of electricity coming from ”’high efficiency cogeneration”’.

(The possession of such GO certificates may permit governmental support to the CHP plant operators and maybe essential where there are sales of CHP derived electricity from one Member State to another.

Eligibility for public support

EU  guidelines currently allow certain types of public support for cogeneration if it can be shown that
the support measures are beneficial in terms of protection of the environment, because the conversion efficiency is particularly high, because the measures will allow energy consumption to be reduced or because the production process will be less damaging to the environment. Such support will in some cases be necessary to further exploit the potential for cogeneration, in particular to take account of the need to internalise external costs.

Any  support for cogeneration must also take into account the effects of and opportunities
available for reducing energy demand through other economically feasible or environmental advantageous measures like energy efficiency measures.

Any  support mechanisms which a producer of cogeneration receives, must not have the effect of restricting trade.

Commission reporting

On the basis of the reports submitted to it (as mentioned above) the Commission will review the application of the Directive and submit to the European Parliament from February 2008 and every four
years, a progress report on the implementation of the Directive.

In particular, the report will:

(a) consider progress towards realising national potentials for ”’high-efficiency cogeneration”’;

(b) assess the extent to which rules and procedures defining
the framework conditions for cogeneration in the internal
energy market are set on the basis of objective, transparent
and non-discriminatory criteria taking due account of the
benefits of cogeneration;

(c) examine the experience gained with the application and
coexistence of different support mechanisms for cogeneration;

(d) review ”’efficiency reference values for separate production ”’   (defined further down)
on the basis of the current technologies.

If appropriate, the Commission will submit with the report
further proposals to the European Parliament.

Cogeneration technologies covered by the Directive

These are specified in ANNEX I of the Directive (summarised lower down) and list the technologies considered to come under the Directive’s purview.

Harmonised efficiency reference values

The Commission has established ”’harmonised efficiency reference values”’ to cover separate production of electricity ( ie a power station) and heat (ie a boiler) and will review these harmonised values for the first time on 21 February 2011, and every four years thereafter, to take account of technological developments and changes in the distribution of energy sources.

These reference values are important as they are used when calculating the primary energy savings as per Annex III.

These ”’harmonized efficiency reference values”’ define the efficiency levels of non chp power stations and heat-only boilers and  permit the energy savings due to a cogeneration scheme to be calculated on a common basis across Europe for differing technologies

Member States must ensure, on the basis of the ”’harmonised efficiency reference values”’ and within six months of their adoption, that the origin of electricity produced from high-efficiency cogeneration can be guaranteed according to objective, transparent and non-discriminatory criteria laid down by each Member State.

Guarantees of Origin commonly referred to as GO certificates

On the basis of the Harmonised Efficiency Values (above) and other relevant definitions, as per Annex 3 Member States must ensure that the ”’guarantee of origin”’ of the electricity certificates enables producers to demonstrate that the electricity they sell is produced from high-efficiency cogeneration.(as defined in the directive)

A guarantee of origin must:

•specify the lower calorific value of the fuel source from which the electricity was produced;

•specify the use of the heat generated together with the electricity and the dates and places of production;

•specify the quantity of electricity from high-efficiency cogeneration that the guarantee represents (this quantity being calculated in accordance with Annex II);

•specify the primary energy savings calculated in accordance with Annex III based on harmonised efficiency reference values established by the Commission.

Competent bodies and accuracy of the GO regime

Member States may designate  competent
bodies, independent of generation and distribution activities, to
supervise the issue of these guarantee of origin to ensure that the guarantee of origin
are both accurate and reliable

Member states are required to outline in their reporting to the Commission the measures taken to ensure the reliability of the guarantee system.

Definition of High Efficiency Cogeneration

High efficiency co generation is defined as that which saves at least 10% of primary energy compared to the alternative methods of generating heat and power separately ie in electricity only power stations and boilers calculated in accordance with the official formula – see below in Annex III summary.

Production from small scale and micro cogeneration units providing primary energy savings may qualify as high-efficiency cogeneration.

Other key definitions

The  Directive, provides the following definitions:

(a) ‘cogeneration’ shall mean the simultaneous generation in
one process of thermal energy and electrical and/or
mechanical energy;

(b) ‘useful heat’ shall mean heat produced in a cogeneration
process to satisfy an economically justifiable demand for
heat or cooling;

(c) ‘economically justifiable demand’ shall mean the demand
that does not exceed the needs for heat or cooling and
which would otherwise be satisfied at market conditions
by energy generation processes other than cogeneration;

(d) ‘electricity from cogeneration’ has a special meaning and means electricity generated
in a process linked to the production of useful heat
and calculated in accordance with the methodology laid
down in Annex II;

 Calculation of electricity from cogeneration

For the calculation of electricity from cogeneration to be used for example in GO certificates and national reporting, the directive provides a methodology in Annex 2. What this means is that all electricity from specified types of high efficiency cogeneration (as defined) can be considered as from cogeneration.

Other important definitions
Article 3 has these other important definitions

(a) ‘cogeneration’ shall mean the simultaneous generation in
one process of thermal energy and electrical and/or
mechanical energy;

(b) ‘useful heat’ shall mean heat produced in a cogeneration
process to satisfy an economically justifiable demand for
heat or cooling;

(c) ‘economically justifiable demand’ shall mean the demand
that does not exceed the needs for heat or cooling and
which would otherwise be satisfied at market conditions
by energy generation processes other than cogeneration;

(d) ‘electricity from cogeneration’ shall mean electricity generated
in a process linked to the production of useful heat
and calculated in accordance with the methodology laid
down in Annex II;

(e) ‘back-up electricity’ shall mean the electricity supplied
through the electricity grid whenever the cogeneration
process is disrupted, including maintenance periods, or out
of order;

(f) ‘top-up electricity’ shall mean the electricity supplied
through the electricity grid in cases where the electricity
demand is greater than the electrical output of the cogeneration
process;

(g) ‘overall efficiency’ shall mean the annual sum of electricity
and mechanical energy production and useful heat output
divided by the fuel input used for heat produced in a
cogeneration process and gross electricity and mechanical
energy production;
(h) ‘efficiency’ shall mean efficiency calculated on the basis of
‘net calorific values’ of fuels (also referred to as ‘lower
calorific values’);

(i) ‘high efficiency cogeneration’ shall mean cogeneration
meeting the criteria of Annex III;

(j) ‘efficiency reference value for separate production’ shall
mean efficiency of the alternative separate productions of
heat and electricity that the cogeneration process is
intended to substitute;

(k) ‘power to heat ratio’ shall mean the ratio between electricity
from cogeneration and useful heat when operating in
full cogeneration mode using operational data of the
specific unit;

(l) ‘cogeneration unit’ shall mean a unit that can operate in
cogeneration mode;

(m) ‘micro-cogeneration unit’ shall mean a cogeneration unit
with a maximum capacity below 50 kWe;

(n) ‘small scale cogeneration’ shall mean cogeneration units
with an installed capacity below 1 MWe;

(o) ‘cogeneration production’ shall mean the sum of electricity
and mechanical energy and useful heat from cogeneration.
Formula for calculating energy savings

For the purposes of the directive, calculation of primary energy savings is defined in accordance with Annex III (summarised below). This is important as to qualify as high efficiency cogeneration then primary energy savings must exceed 10% by this formula.

Infringements

On 20 November 2009 sent a ”’Reasoned Opinion”’ to four Member States, Portugal, Slovakia, Finland and the United Kingdom, for failure to communicate the full transposition of the Directive on the promotion of cogeneration. The ”’Reasoned Opinion”’ is the second step in the infringement procedure. The four Member States had two months to take the necessary measures to comply with the ”’Reasoned Opinion”’. After that, the Commission can decide to bring the case before the European Court of Justice.

Targets

The Directive does not have any national targets for cogeneration and does not require the countries to support cogeneration. It is for this reason seen as a soft measure by industry bodies such as Cogen Europe and Euroheat & power

Purchase of additional electricity

The directive states that tariffs related to the
purchase of additional electricity – “top-up” sometimes needed by
cogeneration producers should be set according to
objective, transparent and non-discriminatory criteria.
Especially for small scale and micro-cogeneration units
access to the grid system of electricity produced from
high-efficiency cogeneration may be facilitated subject to
notification to the Commission.

Subsidiarity

The directive recognises that each member state has particular circumstances and so the detailed
implementation are left to Member States, thus
allowing them  to choose the regime,
which corresponds best to its particular situation. The directive explicitly states that the …”
Directive confines itself to the minimum required in
order to achieve those objectives ”(ie the promotion of chp”)  and does not go
beyond what is necessary for that purpose.”

Deviations / Opt outs, and Derogations

Under Article 12 until the end of 2010 Member States may use an
alternative methodology to define cogeneration as high-efficiency
cogeneration without verifying that the cogeneration
production fulfils the criteria in Annex III if it is proved on
national level that the cogeneration production identified by
such an alternative calculation methodology on average fulfils
the criteria in Annex III.
 
However, specification of the quantity of electricity from cogeneration
produced in such a production, for issuing a guarantee of
origin and for statistical purposes, shall be determined in
accordance with Annex II.

The United Kingdom is one country where an alternative method is used to define the efficiency of CHP, namely the CHPQA scheme which is administered by the Department of Energy and Climate Change, DECC.

 Technical Annexes

There are 4 Annexes summarised here briefly:

ANNEX I

Lists cogeneration technologies covered by the Directive

(a) Combined cycle gas turbine with heat recovery

(b) Steam backpressure turbine

(c) Steam condensing extraction turbine

(d) Gas turbine with heat recovery

(e) Internal combustion engine

(f) Microturbines

(g) Stirling engines

(h) Fuel cells

(i) Steam engines

(j) Organic Rankine cycles

(k) Any other type of technology or combination thereof falling under the definition laid down in Article 3(a)

ANNEX II
Deals with the calculation of electricity from cogeneration

For the calculation of electricity from cogeneration to be used for example in GO certificates and national reporting, the directive provides a methodology in Annex 2. What this means is that all electricity from specified types of high efficiency cogeneration (as defined above in Annex 1 summary) can all be considered to be derived from cogeneration. 

(For micro-cogeneration units the calculation may be based on
certified values.)

The values used for calculation of electricity from cogeneration are specified:

Thus for:

(i) in cogeneration units of type (b), (d), (e), (f), (g) and (h) referred to in Annex I, with an annual overall efficiency (see definition (g) below) set by Member States at a level of at least 75 %, and
(ii) in cogeneration units of type (a) and (c) referred to in Annex I with an annual overall efficiency (see definition (g) below) set by Member States at a level of at least 80 %,

then electricity production from cogeneration shall be considered equal to total annual electricity production of the unit measured at the outlet of the main generators;

If they are not ”’high efficiency”’ (as per the Commission’s definition) then:

(b) In cogeneration units with an annual overall efficiency below the value referred to in paragraph (a)(i) (cogeneration
units of type (b), (d), (e), (f), (g), and (h) referred to in Annex I) or with an annual overall efficiency below the value
referred to in paragraph (a)(ii) (cogeneration units of type (a) and (c) referred to in Annex I) cogeneration amount is calculated according to the following formula:

E CHP  HCHP. C
where:

E CHP is the amount of electricity from cogeneration

C is the power to heat ratio

HCHP is the amount of useful heat from cogeneration (calculated for this purpose as total heat production minus any heat produced in separate boilers or by live steam extraction from the steam generator before the
turbine).

The calculation of electricity from cogeneration must be based on the actual power to heat ratio. If the actual power to heat ratio of a cogeneration unit is not known, the directive gives standard values to be used also in Annex 3

ANNEX III

Gives a definition and a formula for calculating energy savings

For the purposes of the directive, calculation of primary energy savings is defined in accordance with Annex III and calculated on the basis of the following formula: (This is important as to qualify as high efficiency cogeneration then primary energy savings must exceed 10%)

PES  {1-1/[(CHP H/Ref H)+(CHP E/Ref E)]}x100
Where:
PES is primary energy savings.

CHP H is the heat efficiency of the cogeneration production defined as annual useful heat output divided by the fuel input used to produce the sum of useful heat output and electricity from cogeneration.

Ref H is the efficiency reference value for separate heat production.

CHP E is the electrical efficiency of the cogeneration production defined as annual electricity from cogeneration divided by the fuel input used to produce the sum of useful heat output and electricity from cogeneration.

Ref E is the efficiency reference value for separate electricity production.

ANNEX IV

This Annex give guidance on the criteria for analysis of the national potentials for high-efficiency cogeneration

Considerations include:

(a)

— the type of fuels that are likely to be used the potential for increasing the use of renewable energy sources.

— the type of cogeneration technologies that are likely to be used

— the type of non chp production of heat and electricity cogeneration is likely to substitute,

— a division of the potential into modernisation of existing capacity and construction of new capacity.

(b) The analysis will assess the cost effectiveness — in terms of primary energy
savings — of increasing the share of high-efficiency cogeneration. The analysis will also take into account national commitments such as the Kyoto Protocol.

(c) The analysis of the national cogeneration potential will specify the potentials in relation to the timeframes 2010, 2015 and 2020 and include, where feasible, appropriate cost estimates for each of the timeframes.

Directorate-General for Energy

The directive comes under and is administered by The European Commission’s Directorate-General for Energy

See also
*Energy policy of the European Union
* Cogeneration
* District heating
* Euroheat & power
* Relative cost of electricity generated by different sources
* Cogen Europe
* Gas engine
* New York City steam system
* Organic Rankine Cycle
* Pinch analysis
* Stirling engine

External links
* [http://www.managenergy.net/products/R81.htm Official Commission page on the CHP Directive] * [http://europa.eu/legislation_summaries/energy/energy_efficiency/l27021_en.htm Plain words summary of directive from the general EU website] * [http://www.agfw.de/typo3conf/ext/naw_securedl/secure.phpuagfw&filefileadmin/dokumente/eur/Legal_Expertise_CHP-Directive_070312.pdf&t1184670597&hash1245f567a5d4d43b15ca69f39b69d9bf Opinion on questions of law arising from the interpretation of the CHP directive 2004/8/EC]

References
[http://europa.eu/eur-lex/pri/en/oj/dat/2004/l_052/l_05220040221en00500060.pdf Directive 2004/8/EC] OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/62/EEC. Published 2004-02-21 in the Official Journal of the European Communities: L 52/50

Category:European Union directives|Energy Efficiency
Category:Energy policies and initiatives of the European Union|Cogeneration
Category:Energy cogeneration

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1 Comment

  1. ZhenZhen Li - September 24, 2011, 1:34 pm Reply

    I’d like to use and cite this article in my paper, may I ask in which year was it published?

    thank you so much
    ZhenZhen

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