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CODE

Review progress of Directive D5.1 Northern Europe Region – Report on issues and progress with Directive

www.code-project.eu

March 2011

http://www.code-project.eu/

CODE: Work package 5 Cogeneration Directive Progress Northern Region overview

March 2011 2

Table of contents

1. Introduction to the region ............................................................................................................ 3

2. Method of research and analysis ................................................................................................. 3

2.1 Directive implementation .............................................................................................................. 3

2.2 Measures adopted to improve Cogeneration ............................................................................. 13

2.3 Effectiveness of the Cogeneration Directive ............................................................................... 21

2.4 Status of cogeneration - Incentives and barriers ......................................................................... 26

2.5 Assess the real diffusion of cogeneration against the potential ................................................. 31

2.6 Progress report ............................................................................................................................ 37

3. Conclusions ................................................................................................................................. 40


March 2011 3

1. Introduction to the region

The Northern Region of the CODE project contains a wide array of state supports for Cogeneration

and. The level of implementation of the Cogeneration Directive across the Northern Region is high

although the impact of the implementation varies considerable between states. Those states with

a history of support for CHP have tended to move towards renewable CHP support and have

implemented the Directive more fully compared to those with a less supportive policy framework

for CHP. The use of the Guarantees of Origin varies across states with some actively attributing

value (Flanders) to them whereas others (such as the UK) do not.

Member State reporting under the directive is highly variable and, therefore, comparisons of the

implementation of the directive have been challenging. This report highlights that the Directive

facilitate active support for CHP in member states that wish to drive CHP but that it provides no

guarantee of support for CHP.

2. Method of research and analysis

In order to monitor the progress of the implementation of the Cogeneration Directive by the four

countries and analyse and compare the results, a questionnaire was sent to Member State

representatives who addressed the following six main issues:

1. Has your Member State implemented the Cogeneration Directive 2004/08/EC?

2. Which are the instruments put in to practice by your Member State to promote the high

efficiency cogeneration?

3. What is your opinion: is the Directive effective in improving the penetration of cogeneration

in your Member State?

4. Is cogeneration growing in your Member State?

5. Assess the actual position of cogeneration compared to the estimated potential in 2020.

6. Progress Report.

2.1 Directive implementation

Detailed below is an overview of the extent to which the Northern Region Member States have

implemented the Cogeneration Directive 2004/08/EC. This includes discussion on reporting of CHP

potentials, legislative framework and barriers, guarantees of origin and progress reporting.

Austria

Austria has transposed all aspects of the Cogeneration Directive into national law.


March 2011 4

The independent body E-Control manages the Austrian electronic registry system for issuing

Guarantees of Origin (articles 5.3 and 10.1 of the Cogeneration Directive). E-Control is accredited

under the European Association of Issuing Bodies (AIB) and the Austrian Government has ultimate

responsibility for the system and monitors its reliability.

A report entitled “Potential study for cogeneration” (Endbericht Studie über KWK-Potentiale in

Österreich) was submitted to the Commission in 2005, as required by articles 6.1 and 10.1 of the

Cogeneration Directive, outlining the potential for CHP in Austria. Based on a 2002 reference year

the report identified growth potential of 2,379MWe between2005-2020. It is not clear whether

this figure is technical or economic potential. This assessment does not specify the potentials in

relation to the timeframes 2010, 2015 and 2020 with appropriate cost estimates for each of the

timeframes in line with Annex 4 (C) of the Cogeneration Directive.

A subsequent report “Progress report according to Article 6(3) of Directive 2004/8/EG” was

submitted to the Commission in 2007, which reiterates how the Directive has been transposed

nationally. It outlines the reports that had been submitted to the Commission to date and included

details of the system for GoOs, relevant legislation, CHP potential, support schemes and that these

support schemes hadn’t been in place long enough to measure progress. Information on the legal

framework was included within this report and could not be found in a separate report. This

detailed two national laws Elektrizitätswirtschafts- und organsiationsgesetz EIWOG BGBI I Nr

106/2006 (Electricity Act) and Ökostromgesetz BGBI. I Nr. 106/2006 (Green Electricity Act) which

was subsequently translated into regional legislation in the nine Austrian states. Subsequent to

this report however, these two laws have been superseded by the Austrian Federal Law on the

Promotion of CHP (KWK-Gesetz, Federal Law Gazette I No. 13/2009) which entered into force on

the February 23rd, 20091.

A 2009 report was submitted to the Commission entitled ‘Report on the results of the analysis and

evaluations carried out in accordance with Article 9 of “Directive 2004/8/EC – Cogeneration

Directive Administrative procedures”, which outlines the way in which CHP installations are

authorised. It was noted in the report summary that as CHP plant may have adverse effects on

local populations or the environment, these procedures have become increasingly complex and

lengthy, some taking several years to complete, which presents a material barrier to CHP

deployment.

1 http://www.e-control.at/portal/page/portal/medienbibliothek/recht/dokumente/pdfs/kwk-gesetz-bgbl1-111-

2008.pdf


March 2011 5

As of March 2011 a second report detailing progress against the identified potential in respect of

Article 6.3 (deliverable 10.2) of the Cogeneration Directive had not been published and submitted

to the Commission.

Belgium (Flanders)

The Cogeneration Directive (2004/08/EC) has been fully implemented in Belgium. Energy is dealt

with regionally by Flanders, Wallonia and Brussels. Flanders has the greatest amount of installed

CHP which are primarily industrial applications. Wallonia also has some industry based CHP

capacity whilst in the Brussels region CHP capacity is predominantly smaller scale building based

CHP market.

As energy is a regional issue, Belgium has three different support systems for CHP and the

Guarantees of Origin Certification system exists in each of the regions. The potential for CHP is

greatest in Flanders.

Documents supplied to the commission include the following (most of which are supplied in Dutch,

French and English):

“BE report Art 6 9 10 2009” is the primary document summarising the CHP treatment in the three

regions and contains information about guarantees of origin, CHP potentials, and legislative

framework and barriers.

In line with Articles 5.3 and 10.1, an additional document for regarding Guarantees of Origin in

Wallonia and Brussels has been submitted to the Commission (BE Annex2 documents). This

document also addresses articles 9.1, 9.2 and 10.1 and covers Legislative framework and barriers

in Belgium.

“BE Annex 4” documents CHP potentials as outlined in articles 6.1 and 10.

Progress against the Directive for articles 6.3 and 10.2 is initially reported in the following

documents: Flanders – “BE report Art 10 Cogen report Flanders 2007 situation” and “BE Annex 3

WKK inventaris” and for Wallonia – “BE Annex 1”. A separate document is not provided for

Brussels, but CHP potentials are included in the general report “BE report Art 6 9 10 2009”.

No subsequent progress report is available on the Commission’s website as of April 2011.

Denmark

Denmark has fully implemented the Cogeneration Directive, primarily through the Danish Heat

Supply Act and Electricity Supply Act. As “Cogeneration plays an absolutely crucial role in Danish

energy supply, and Denmark is one of the countries with the highest cogeneration cover in the


March 2011 6

European Union”2, Danish law existing prior to the Cogeneration Directive provided support for

CHP and therefore compliance with the Directive required minimal amendments to the existing

legislative framework.

In line with articles 5.3 and 10.1, a provisional set of calculations for cogeneration in Denmark was

produced from reference values for separate production published by the European Commission

on 6 February 2007. The Danish Energy Authority issued an executive order to this effect on

February 16th, 2007, which came into force on March 1st, 2007. Up to the end of 2010, a

Guarantee of Origin could be issued without a specific calculation of the primary energy saving for

current electricity production, provided that it can be proved that at national level cogeneration

production was generated with an average saving of primary energy of at least a 10%. In these

cases, the electricity producer could choose to have a primary energy saving of 10% shown on the

Guarantee of Origin. If the electricity producer wished to have a specific calculation carried out,

the enterprise responsible for the system would carry out this calculation. Energinet.dk would

then issue the guarantees, at the request of the electricity producer3.

In 2007, The Danish Energy Authority issued the “Report to the European Commission in

connection with the implementation of the Cogeneration Directive 2004/8/EC 21” in line with

articles 6.1, 6.3, 9.1, 9.2, 10.1 and 10.2 of the Cogeneration Directive. This details the CHP

legislative framework, barriers, potential and promotion of cogeneration to date. Across a range of

sectors this report identified installed capacity of 9.6 GWe, a technical potential of an additional

13.9G We, but only 10.1 GWe as economically viable.


Finland

The Finnish Government has fully implemented the EU Cogeneration Directive (2004/08/EC). In

particular, the Guarantees of Origin (GoO) certificates became available in Finland in 2010. It is

important to note that whilst these certificates are tradable, they attract limited, if any, value.

The Finnish Ministry of Employment and the Economy, Energy Department, issued a report on July

30th, 2007, pursuant to article 10(1) of directive 2004/8/ec “regarding the information referred to

in article 5(3) on the measures taken to ensure the reliability of the Guarantee of Origin system”.

The report detailed the results of a pilot Guarantee of Origin scheme that for both CHP and

renewables, following the European Energy Certification System (EECS). The report concluded that

2 p5 Report to the European Commission in connection with the implementation of the Cogeneration Directive

2004/8/EC 21 February 2007 The Danish Energy Authority Ministry of Transport and Energy 3 p18 ibid


March 2011 7

it would be possible to institute a GoO system on this basis, but that the demand for the GoOs

themselves would take some years to develop.

A second report issued by the Ministry of Employment and the Economy Energy Department on

April 29th, 2009, documented; Articles 6.1 and 10.1 regarding CHP potentials, legislative

framework and barriers as requested in articles 9.1, 9.2 and 10 and the progress to date of high

efficiency cogeneration against potential in line with articles 6.3 and 10.2. The report concluded

that due to the existing promotion of CHP in Finland as well as the structure of industry and

climatic conditions, it is competitive against separate generation. There is little support for CHP

therefore, the exception being small-scale renewable CHP which is not yet competitive. Specific

targets for industrial and district heating cogeneration in 2010 and 2025 are outlined. The

combined CHP potential total for 2025 is 41.9 TWhe.

A second progress report is not yet available on the Commission’s website as these are due every

4 years and the first wasn’t published until 2009.

Germany

The German Government implemented the EU Cogeneration Directive (2004/08/EC) and brought

a new CHP law into force January in 2009. The German Government aims to double the amount of

electricity generated by CHP (to 25% of electricity generation) by 2020. The new law incorporates

the definition of high quality CHP, only providing a “bonus tariff” for qualifying plant and also

details the system for issuing Guarantees of Origin.

In February 2007 the report, “An analysis of the national potential for the application of high-

efficiency cogeneration, including high-efficiency micro-cogeneration in Germany” was issued in

line articles 6.1 and 10.1 of the Cogeneration Directive. This report examined the potential for

additional CHP use in a wide range of sectors and considered a variety of fuel types. The report

also identified the return on investment requirements of utility companies in the energy sector

(liberalised in 1998) as a very real barrier to uptake of CHP. The potential was identified as 328

TWhth pa and 351 TWhe pa.

Section 3.2 of the above report detailed the legislative framework (this was not submitted to the

commission in a stand-alone report). This section detailed the new Energy Management Act which

entered into force in July 2005. Key aspects for CHP included the unbundling of network operation

from trading and production activities which could potentially be negative for district heating

networks but positive for third party CHP operators.

Prior to the Cogeneration Directive the German Government adopted the Cogeneration Act in

2002 to support CHP in the liberalized market with falling energy prices. Support, in the form of


March 2011 8

surcharges on electricity supply payments, under this regime ended in 2010 for all types of CHP

except microCHP (up to 50kW) which are supported to 2018 and fuel cell CHP technology which

ends in 2020. Under this regime however, expansion between 2002 and 2006 was seen mainly in

small plant under 2 MW but particularly less than 50 kW. To address this, the Cogeneration Act

was amended in 2009 to support CHP at all scales. The amendment included rules on the

introduction of a guarantee of origin of electricity from cogeneration. The amendment states that

operators of high-efficiency cogeneration plants can apply to the Federal Office of Economics and

Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle), for a guarantee of origin for

electricity produced by cogeneration.

The “Report by the German Federal Ministry of Economics and Technology in accordance with

Article 10(1) read in conjunction with Article 5(3) and Article 10(2) read in conjunction with Article

6(3) of 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 92/42/EEC”, issued in 2009, identified the penetration of CHP in 2004-2006

(20.8 GWe and 45.7 GWth in 2006) and the system for Guarantees of Origin.

As of April 2011, a second progress report was not available from the Commission’s website as

these are due every four years, the next should therefore be available in 2012.

Ireland

The Republic of Ireland has fully implemented the Cogeneration Directive. In addition, based on

the CHP potentials study, the Government has agreed non-binding targets for CHP. The

Guarantees of Origin have been put in place in Ireland; however, the methodology for calculating

high efficiency CHP has not yet been established. The Irish regulator outlined in 2010 that this

methodology will be determined in the 2011 work programme.

An undated report (likely issued 2009) was submitted to the Commission highlighting the CHP

potential for Ireland as required by articles 6.1 and 10.1. This same report also detailed the

legislative framework and barriers as required by articles 9.1, 9.2 and 10.1.

The document submitted to the Commission appears to be a summary of a more detailed report

from August 2009 entitled “Combined Heat and Power (CHP) Potential in Ireland”, prepared for

the Sustainable Energy Ireland (SEI) by Byrne Ó Cléirigh. Both documents cite targets from the

Government’s Energy White Paper “Delivering a Sustainable Energy Future for Ireland” published

in 2007 of 400 MW by 2010 and 800 MW by 2020 from a baseline of 300 MW in 2008 (160 MW of

this installation base is a single site). The report suggested that this low start point was due

historically to the low energy intensive nature of industry and housing in Ireland. Funding

allocated to CHP amounted to 11 million €. With regard to potential for further uptake, low,


March 2011 9

medium and high scenarios were created resulting in potential of 366 to 773 MW in 2020. Support

for CHP in 2009 consisted of the SEI CHP deployment programme of grants and accelerated capital

allowances.

An update to the 2009 document “Combined Heat and Power in Ireland 2010 Update” was

published for SEI, however, this document appears to present the same figures and it is unclear

what has been updated. No other document containing an updated progress report addressing

articles 6.3 and 10.2 appears to be available from the Commission’s website as of April 2011.

Netherlands

The Cogeneration Directive has been fully implemented in The Netherlands. Guarantees of Origin

for high-efficiency cogeneration were put in place in 2008 managed by CertiQ and prior to this, in

the period 2005-2008; certificates were issued by CertiQ for CO2-free electricity, which could be

redeemed for the MEP (renewable energy and CHP subsidy scheme). All other Cogeneration

Directive reporting on CHP potential, barriers and documentation of the legislative/regulatory

framework were submitted in a timely fashion. Implementation of the Directive, however, has not

produced a more favourable climate for CHP in the Netherlands and during the same time period,

support for CHP has actually declined.

In line with Articles 5.3 and 10.1 the Ministry of Economic Affairs, Directorate-General for Energy

and Telecommunications, Directorate for Energy and Sustainability prepared a report in April 2009

regarding Guarantees of Origin (GoO). This report highlighted that since December 14th, 2005, the

1998 Electricity Law (Elektriciteitswet 1998) has provided a framework for the nature, operation

and application of guarantees of origin for high-efficiency cogeneration. The detailed regulations

are documented in: “Regeling garanties van oorsprong voor elektriciteit opgewekt in een

installatie voor hoogrenderende warmtekrachtkoppeling, (September 14, 2007)”. CHP-GOs refer to

1 MWh each and are issued for gross production. The GoOs, issued on a monthly basis, are valid

for one year, but are not part of a subsidy or trading scheme and consequently are not be

transferable, but can be cancelled. To April 2011, no GoOs have been issued.

An analysis of legislative framework and barriers under articles 9.1, 9.2 and 10.1 was submitted to

the Commission in November 2007. This document, entitled “High-efficiency cogeneration in the

Netherlands: Analysis of the potential for high-efficiency cogeneration and overview of barriers and

recent developments” prepared by Daniëls, Boerakker, van der Welle and Wetzels used the

analysis of support and barriers to assess economic potential. This was also regarded by The

Netherlands as their first Progress report as required by articles 6.3 and 10.2 of the Cogeneration

Directive.


March 2011 10

Support for CHP in 2007 included an exemption from energy tax on fuel consumption for

electricity producing installations (not only for CHP) over 60 kW with an electrical efficiency higher

than 30%. Moreover, CHP electricity produced for on-site use was exempted for the energy tax on

electricity, provided that the Senter efficiency (electrical efficiency + 2/3 of thermal efficiency) is at

least 60%. The Energie-investeringsaftrek is a tax credit for company profits invested in energy

savings measures and renewable energy; 44% of the invested amount could be subtracted from

the profits. At 2007 tax rates (25%), this was roughly equivalent to a subsidy of 11% and at present

(2011) equivalent to roughly 10%. In addition, an operational support “MEP” per kWh produced

was provided to CHP until 2008. Technical potential for current cogeneration technologies in the

services sector is estimated on between 30 and 60 PJth in 2010, and will probably decrease

towards 2020.

“The potential for high-efficiency cogeneration in the Netherlands” report by Dijkstra of ECN in

March 2010 to the Ministry of Economic Affairs, addressed articles 6.1 and 10.1 of the

Cogeneration Directive, identifying economic and technical CHP potential. This builds on the

economic potential identified in 2007 but differentiates technical and economic potential. A

maximum technical potential of 7.7 GWe of new cogeneration by 2020 (on top of the existing 12.9

GWe) at a CO2 price of 15€ per tonne was calculated. Economic potential for new cogeneration,

however, is just 2.3 to 3.4 GWe. Economic potential varies more, with increases in the price of

carbon leading to higher electricity prices making it attractive for businesses to generate their own

power by cogeneration.


Sweden

The Cogeneration Directive has been fully implemented in Sweden.

A system for Guarantees of Origin was established in 2007 addressing Articles 5.3 and 10.1. The

report “Monitoring and evaluation of the guarantees of origin system” (Reference: ER 2007:32),

describes the relationship between guarantees of origin for high-efficiency cogeneration electricity

and those for renewable electricity (under the SFS 2003:437 Lag om ursprungsgarantier avseende

förnybar el (Renewable Electricity Guarantee of Origin Act)). Interestingly, the report also identifies

that: “Ownership of guarantees of origin is being transferred both in Sweden and abroad. This is

thus something that has developed spontaneously in the market [...]. This development


March 2011 11

demonstrates that guarantees of origin have come to have a greater significance than could have

been anticipated at the time of the legislation coming into force”4.

To satisfy Articles 6.1 and 10.1 of the Cogeneration Directive the Government’s District Heating

Committee (Fjärrvärmeutredningen) commissioned the (District Heating Inquiry; N 2003:03) “An

assessment of the potential for high-efficiency cogeneration in Sweden” by Öhrlings

PricewaterhouseCoopers in February 2005. This report stated that all existing Swedish CHP plants

are highly efficient at over 90% efficiency. It also looked at current CHP installations, economic and

technical potential. The economic potential was identified as 14 TWh for 2010, approximately 15.5

TWh for 2015 and 17 TWh for 2020, with around 60% of this potential from municipal district

heating systems. Within this total potential, 0.5-1 TWh was from small-scale CHP and 10-15 TWh

from industry.

When the Green certificates were introduced in 2003 the final year for scheme entrants was 2010

(with support provided for 15 years from that date). This was later extended to 2016.

Pursuant to Article 6(3) and 10(2) of the Cogeneration Directive (2004/8/EC), the Swedish Energy

Agency submitted an initial progress report to the Commission on 1 June 2010 (Reference: 10-

2010-487). This report assessed figures to 2008 and stated that: “There is growth in the use of

high-efficiency cogeneration in Sweden in absolute terms and as a proportion of electricity

production, and that the proportion of district heating produced by cogeneration is growing. High-

efficiency cogeneration's share of all cogeneration is estimated to be 100%.”5 with most Swedish

cogeneration plants operating at around 90% efficiency6.

United Kingdom

The Cogeneration Directive has been fully implemented in the UK.

The model for determining high efficiency cogeneration (Guarantee of Origins Certificates), as set

out in Articles 5.3 and 10.1 of the Directive, has been rejected in favour of an existing scheme

called the Combined Heat and Power Quality Assurance Programme (CHPQA). This has been

modified in order to comply with the Directive and is the tool by which eligibility for CHP support is

determined. The reliability of the CHPGO system is ensured because this data is used to determine

eligibility for fiscal benefits in the UK and consequently is subject to rigorous checking and audits

by the CHPQA administrative team. It is also possible to operate as a partially qualifying CHP plant,

4 p48 Monitoring and evaluation of the guarantees of origin system ER 2007:32 Swedish Energy Agency, Sep 2007

5 p3 ibid

6 Report pursuant to Article 6(3) of the Cogeneration Directive (2004/8/EC), Swedish Energy Agency,

1 June 2010, Ref.: 10-2010-487; District heating and cogeneration in the future (SOU 2005:33)


March 2011 12

in which case benefits are applied only at times when the CHP plant operates in high efficiency

cogeneration mode. As the GoO certificates attract no value in themselves, there is no trade in the

certificates.

In line with articles 9.1, 9.2 and 10.1 of the Cogeneration Directive, the undated “UK - Report on

Implementation of Article 9 of EC Directive 2004/8/EC Cogeneration”: Evaluation of Administrative

Procedures’ (possibly from 2009) outlines the existing legislative and regulatory framework for

CHP and focuses on the planning development of plant. The document refers to the Energy Act

1976 and February 2003 Energy White Paper "Our energy future – creating a low carbon economy"

(Cm 5761) in combination with the Town and Country Planning Act as a basis.

“Potential for CHP in the UK” was prepared by AEA Energy & Environment, BRE and PB Power in

2007 and formalised by Defra (Department for Food and Rural Affairs) as “Analysis of the UK

potential for Combined Heat and Power” October 2007 as part of the Government’s cogeneration

strategy to 2010 in order to respond to articles 6.1 and 10.1 CHP potentials. It contains analysis in

three areas: industrial sectors, individual buildings and community heating. In 2005, using the

definitions in the Cogeneration Directive, there were 1,502 CHP units with a total electrical

capacity of 5,440 MWe, generating 27TWh of electricity and 51 TWh of heat. Potential to 2015

suggested 94 TWhth, 81TWhe (12,529MWth and 10,567MWe). These did not include renewable

CHP, trigeneration or microCHP.

The report also identified the barriers to uptake of CHP as uncertainty over future of gas and

electricity prices and lack of Government support. The Government support provided to high

efficiency CHP in 2007 included exemption of Climate Change Levy of all input fuel for electricity

generation, enhanced capital allowances and business rate exemptions.

In order to comply with articles 6.3 and 10.2 of the Cogeneration Directive 2004/8/EC, an undated

Progress Report was submitted to the Commission, probably in 2007. This document is titled: 3The

UK Progress Report to Comply with Article 6.3 of Directive 2004/8/EC on the Promotion of

Cogeneration”. The report outlines what have already been submitted to the commission

including the GoO system, legislative framework and barriers, CHP potentials and support

measures. The report also noted that additional deployment of CHP from 2004 to 2007 has been

slow due to the number of barrier still in place.

An update to the 2007 progress report is now due but is not yet available on the Commission’s

website.


March 2011 13

2.2 Measures adopted to improve Cogeneration

Outlined below are the mechanisms by which CHP is promoted in each Northern Region Member

State. This includes both barrier removal and support. Where possible, whether measures were

adopted before or after the Cogeneration Directive and whether these measures are enduring,

have been identified.

Austria

Support for high efficiency CHP has changed over time in Austria. Previously, “existing” CHP plant

(which received planning permission before 2003) and modernised CHP plant (which started

operation after 2001) connected to district heating networks were eligible for support to 2008 and

2010 respectively. This feed-in tariff was based on additional expenses (balance between revenue

and costs) for maintaining operation of a CHP plant (costs for an adequate return on capital

employed were taken into account).

The Green Electricity Act (Ökostromgesetz) currently incentivises renewable generation through a

(export) feed-in tariff7 for biomass-gas8 or waste-gas CHP. Rates are specified for 0-250 kW, 250-

500 kW and over 500 kW. Supporting this is a thirteen year purchase obligation for the “biomass

balancing group” aggregator. After the first thirteen years of operation, a generator can decide

whether to sell their electricity on the open market or continue to sell to the aggregator. When

avoided costs are considered, it is more cost effective to use power on-site than to export.

Investment support for new (built after July 2006) high efficiency (municipality) CHP plant

connected to district heating networks and industrial plant can offset capital investment against

tax (a similar mechanism to Enhanced Capital Allowance in the UK). Up to 2 MWth 30% of the

“environmental” investment can be offset, but above this size only investment in district heating

(DH) can be offset up to the EU State Aid Diminimus limit of 500.000 €.

Large electricity generators of all kinds have to pay a levy towards system balancing costs.

Generators or groups of generators, under 5 MW are exempt from this levy.

7http://www.e-control.at/portal/page/portal/medienbibliothek/oeko-

energie/dokumente/pdfs/OekostromVO%202011.pdf 8http://www.e-control.at/portal/page/portal/medienbibliothek/recht/dokumente/pdfs/oekostromgesetz-

konsolidierte-fassung-20102009.pdf

http://www.e-control.at/portal/page/portal/medienbibliothek/oeko-energie/dokumente/pdfs/OekostromVO%202011.pdf

http://www.e-control.at/portal/page/portal/medienbibliothek/oeko-energie/dokumente/pdfs/OekostromVO%202011.pdf

http://www.e-control.at/portal/page/portal/medienbibliothek/recht/dokumente/pdfs/oekostromgesetz-konsolidierte-fassung-20102009.pdf

http://www.e-control.at/portal/page/portal/medienbibliothek/recht/dokumente/pdfs/oekostromgesetz-konsolidierte-fassung-20102009.pdf


March 2011 14

Belgium (Flanders)

The three Belgian regions have broadly similar CHP support systems with; certification process for

CHP electricity based on efficiencies, carbon savings and energy savings. All three certificate

schemes are outlined briefly below:

The Flanders’ system is based on primary energy savings (i.e. 1 certificate for 1 MWh

primary energy savings). These “CHP certificates” and are only available to CHP

installations. These certificates have a minimum guaranteed floor price of 27 euro per

certificate and a penalty per missing certificate of 45 euro. The required energy saving

quotas is raised each year. See further detail below.

The Walloon system is based on CO2 reduction (i.e. 1 certificate for a saving of 450 kg of

CO2). These certificates are called “green certificates” as they are also available to

renewable technologies. The minimum guaranteed floor price is 65€ per certificate with a

penalty per missing certificate of 100€. The required CO2 reduction quotas are raised each

year.

The Brussels system is based on CO2 reduction (i.e. 1 certificate for a saving of 217 kg of

CO2). These certificates are called “green certificates” as they are also available to

renewable technologies and are similar to the Walloon system. Penalty per missing

certificate is 100€ (in 2009). Certificates from Wallonia are recognized for the certificate

obligation in Brussels (but not the other way around). The required CO2 reduction quotas

are raised each year.

Flemish investment support for CHP ended in February 2011.

In addition to the principle support mechanism described above, investors in high efficiency

cogeneration also receive a tax benefit with a reduction of corporation tax from 34 per cent to

13.5% for new investments.

Non-financial incentives include priority access to the grid improving the ability of new plant to

start dispatching power, however, there is no priority dispatch for any generator in Flanders and

this applies equally to CHP.

Flanders

Electricity suppliers are obliged to source a proportion (1.19% in 2006, 2.16% in 2007, 2.96 in

2008, 3.73 in 2009, 4.39% in 2010, 4.9% in 2011, 5.2% in 2012 (will be increased to 7.6%), 5.23% in

2013-2020 (will be increased to 7.0% in 2013), 7.9% in 2014, 8.5% in 2015, 9.2% in 2016, 9.8% in

2017, 10.5% in 2018-2020) of their electricity from CHP with “white certificates” are required as


March 2011 15

evidence a supplier has met their CHP target. For suppliers not generating electricity from CHP

themselves, they can purchase white certificates on the open market. Those electricity suppliers

that cannot present adequate certificates at the end of the reporting period are required to pay a

fine that is greater than the white certificate market price, currently 45€/MWh, with the floor

being 60% of this amount. The fine will decrease to 41€/MWh from 2012 and the floor will

increase to 31€ per certificate (only for new installations from 2012).

CHP generators are awarded “white certificates” for electricity generated by high efficiency CHP

plant, based on their primary energy savings, for each MWh. The sale of these certificates provides

additional income for generators on top of revenue earned from power or heat sales. A floor price

for the white certificates is set by the Flanders Government, currently 27€ (March 2011). This is

realised through an obligation on the distribution grid operator to buy certificates at the floor

price directly from generators (not certificates purchased on the market). This ensures there is

always a buyer for the certificates, provides insulation from any certificate price crash and

certainty for investors. For CHP plant connected to the electricity transmission network which is

managed at a federal not regional level, however, there is no minimum price guarantee for their

certificates making them vulnerable to market oversupply of white certificates.

The effectiveness of this system can be seen through the additional supply within the market

which has in turn decreased the trading value of certificates from 40€ to 35€. The success of this

system, however, could well have negative implications if an oversupply of white certificates

causes the price of certificates to crash (except for installation on the distribution grid that have

the minimal guaranteed floor price).

Denmark

Denmark has promoted district heating and CHP since the 70’s and the Electricity Supply Act and

Heat Supply Law were introduced in 1979. The Electricity Supply Act effectively prevented the

building of power plants (with an electrical capacity of over 25 MW) without heat recovery. The

Heat Supply Law required local authorities to undertake an analysis of current and future heat

supply across their own building stock as well as buildings and industry within their jurisdiction.

Based on these heating needs councils were required to prepare a regional heat plan which was

supported by a mixture of fiscal and regulatory tools (further details below). This incentivised heat

users to connect to district heating (DH) schemes and/or source their energy requirements from a

CHP station. Incentives included:

A Feed-in tariff regime was extended to cover Gas CHP in 1992. This paid generators for

electricity exported to the grid.


March 2011 16

An obligation to buy locally produced CHP electricity when exported onto the public

distribution network. This was phased out in 2005.

An obligation for new and existing buildings connect to DH or mains gas was introduced in

1982.

These measures were supported by a ban on electric heating within all new buildings or

existing buildings that were serviced by water based central heating system.

As there is already extensive use of CHP in Denmark, new investments in fossil fuel CHP, for large

plants near cities for example, do not attract any production or capital subsidy in Denmark;

however, there is a financial mechanism to support the move to renewables and for microCHP.

Small existing plants receive a triple feed-in tariff to compensate for sunk costs involved with

production, associated with the forced conversion to CHP. Renewable CHP (including use of waste

as the primary fuel) receives a tariff on kWh of production.

It is important to note that no low quality CHP has been developed in Denmark and therefore all

plant has qualified for the appropriate support.

Finland

There is generally no CHP specific support in Finland with the exception of small scale renewable

CHP. Aid is no longer awarded to larger CHP plants, since these projects are generally large enough

to be covered by the EU emissions trading scheme and this is considered sufficient incentive to

increase use of bioenergy within this class. CHP projects are not considered to be energy saving or

energy efficiency projects in themselves in Finland

Most barriers to CHP deployment, such as connection to the electricity networks or the risk of

losing heat customers, were effectively removed when the Finnish energy markets were

liberalised in1995, thereby facilitating CHP entry into the market.

CHP operations in Finland are now generally profitable and new investment is attractive. This is in

part due to the widespread deployment, and expansion, of district heating networks which

provide a consistent heat demand with very low risk of significant or precipitous demand loss. The

low risk is due to the volume of customers on the network; the potential for a significant

proportion of heat networks customers to be removed from the network is very low. As the same

profile also applies to the electricity network, CHP operators can be confident of an enduring

market for both heat and power. Traditionally, Finnish networks are initially supplied with heat

from boilers. Once the heat network is large enough to support base load CHP, the boilers are

replaced (in part) with CHP plant.


March 2011 17

Germany

The Kraft-Wärm Kopplungsgesetz (the 2002 CHP law) provided an obligation to connect CHP to the

grid, provided a bonus for CHP electricity fed in into the public grid from new CHP plants up to

2MWe or modernised CHP plants. Under this regime some 2 GW of modernisations where realized

and small scale CHP flourished; subsequently in 2009, the Cogeneration Act was amended to

support CHP at all scales.

The 2009 amendment provided a feed-in /generation tariff in which the kWhs generated by the

first kW capacity of a utility are rewarded at a higher level than subsequent generation. This

financial incentive is available for sizes of new CHP plant (starting operation between 2009 and

2016) operating at high efficiency, where previously only plant under 2 MW received support. This

feed-in bonus tariff, provides sustained support over 10 years for small CHP engines of up to 50

kW, but larger plant receive support for only 4 or 6 years. The support is guaranteed until 2016.

Customers pay a surcharge on all power for CHP which covers the cost of the generation tariff for

CHP.

Further to this, all electrical power generated now receives support where previously only power

exported to the public grid received a payment. This is particularly important for industrial

customers who have a significant onsite base load power demand. The level of support for

electricity generated from renewables has also increased 50% from 2c kWh to 3c kWh in the

renewable energy law of 2009.

In addition, the Energy Tax Law and the Renewable Energy Law defined that fuel for CHP was

exempt from Ecotax and provided a feed-in tariff for biogas CHP.

Ireland

Financial support under the CHP Deployment programme was provided in Ireland until 2009 and

whilst running, the scheme supported 52 small CHP plants. In addition to the removal of this

support, CHP installations are also now liable for new network charges, carbon tax and windfall

carbon levy introduced in 2010.

To 2009, the CHP Deployment programme provided grant support for fossil fuel plant up to 999

kWe capacity and biomass CHP of any size. €11 million was allocated for fossil fuel and biomass /

anaerobic digestion fired CHP in both capital grant aid and support for feasibility studies. A grant

covering 30% of capital costs, up to a maximum of €900,000, was provided for eligible plant.

Under the Renewable Energy Feed in Tariff (REFIT) CHP received a payment rate of €0.12 per kWh,

and domestic micro-CHP received 0.19€ per kWh through the Irish feed in tariff.


March 2011 18

The Accelerated Capital Allowances (ACA) scheme, similar to the UK Enhanced Capital Allowances,

introduced under the Finance Act in 2008 supported CHP and trigeneration plant. In the case

where the eligible equipment is purchased on the basis of capital grant support, the portion of

expenditure not covered by grant aid can be claimed for under ACA.

In 2009 the Irish Government introduced an electricity rebate (10kV connector), 1.5c per kWh on

grid imports (due to high energy costs) the input on CHP is €15 MWh. Cost of €6-600,000 pa for a

5 MW some CHP sites are loss making. Reduced during October from 0.8c to 1.5c. But network

charging reduced by 0.4 therefore 0.8 + 0.4 = 1.2 at most.

2010 revision of network charging decreased charges for industrial/commercial and increased

charges for domestic therefore a relative benefit of operating CHP for industrial/commercial users

eg for 10 kV connection October September. October 2010 total day charges 1.12c to 0.66 kWh.

5MWe, 400,000MWh per year 180,000€ loss

In 2010 introduced carbon tax on fuels (i.e. producers) but CHP is exposed to all input fuel. 3€

MWh if in EU ETS its 17% of this = 0.5 €MWh

Windfall carbon levy in 2010 applies from January 2011 only to 2-80MW CHP as large scale w/s

market 65% levy on windfall.

Netherlands

Historically The Netherlands has provided subsidies for investments. Since 2000, however, support

schemes for cogeneration in The Netherlands have been reduced or removed with investment

support being replaced by operational support.

A feed-in tariff style mechanism (MEP – renewable energy and CHP scheme), which ended in 2006,

originally provided operational support per kWh produced. A successor for the MEP called the SDE

(Stimulering Duurzame Energie) focuses on sustainable energy production, supporting renewable

CHP only and was instated by SenterNovem the Ministry of Economic Affairs' agency in 2008. The

SDE is considered a “modified feed-in tariff”; a premium on the base fixed subsidy for heat delivery

with an option for a higher price per kWh if the electricity price goes above the subsidy ceiling.

Estimated annual caps are calculated based on capacity installed and estimated installations from

2008 to 2011. This offers additional certainty to investors, while preventing over stimulation.

Tax exemptions also stimulate the uptake of cogeneration. The Energie-investeringsaftrek is an

exemption of taxes on company profits for investments on energy savings measures. 44% of the

invested amount may be subtracted from the profits. At 2007 tax rates (25%), this was roughly

equivalent to a subsidy of 11% and at present (2011) equivalent to roughly 10%.


March 2011 19

Electricity producing installations do not have to pay energy tax on their fuel consumption,

provided that the electrical efficiency is higher than 30%.

The Cogen Nederland 2011 Cogeneration Roadmap identifies the lack of specific CHP policy

(particularly for non-renewable CHP) and suggests there is a need for further financial support. The

Roadmap recommends reincorporating cogeneration into the existing SDE and IEA (Energy

Investment Deduction Scheme) schemes, which would reduce capital costs and address some

investor uncertainty.

It is also likely that additional legislative support will soon be established for priority dispatch of

electricity from renewables and CHP.

Sweden

The measures to support CHP in Sweden were all implemented prior to the Cogeneration

Directive, they are outlined here. Tax relief (at 30%) on heat generated from CHP. Tax reduction

for CHP schemes covered by the EU ETS. A system of Green Certificates supporting cost effective

renewable electricity, a primary beneficiary of which is biomass (including peat) CHP (Lag

(2003:113) om elcertifikat, Law on Green Electricity Certificate (2003:113) revised 2010) which has

promoted CHP connected to district heating systems and new bioenergy CHP plant. Other policy

instruments including the energy tax and a carbon dioxide tax have provided indirect support to

CHP. The system for acquiring environmental and location permits from local authority planning

departments, required for all CHP and industrial activity, however, remains lengthy and uncertain,

increasing costs significantly. Grants are also available for converting electric heating to district

heating.

United Kingdom

Enhanced Capital Allowances (ECAs) are a tax based investment incentive which enables a

business to write off the whole of the first-year capital cost of investment, against their taxable

profits of the period during which they make the investment. This support is viewed by the CHP

community as vital to encourage investment in new plant which has a significantly higher capital

outlay compared to the counterfactual choice of a boiler.

Feed-in Tariffs (FiT) offer financial support for gas-fired CHP up to 2 kW (and biogas CHP up to

5MW), providing a guaranteed return on investment for generating low-carbon electricity.

MicroCHP plants are rewarded at £100 per MWh (2010 prices) and rise in line with inflation. Any

exported electricity is rewarded at £30 per MWh. The tariff support lasts for 10 years. For

renewable electricity supported under the FiT there is no additional support for operating in CHP

mode through the FiT system.


March 2011 20

The Climate Change Levy (CCL) is chargeable on non-domestic supplies of energy. The levy is

charged on input fuels based on the energy content (not the carbon content) of the input fuel.

Good quality CHP plants are exempt from the input fuel tax under the CCL. In addition, electricity

supplied to non-domestic customers incurs a CCL tax currently costing ca £4.70 per MWh. For

onsite supply of CHP electricity, CHP plants are exempt from the tax. For electricity exported to

the grid, CHP plants can apply for CHP Levy Exemption Certificates (CHP LECs) which demonstrate

the amount of electricity supplied from good quality CHP sources. These LECs can be sold to

energy suppliers who have liabilities under the CCL regime. The amount of value received for a LEC

depends on individual company/operator negotiations with CCL liable entities but this can vary to

100% of the value being passed to CHP operators to about 60%. Small scale CHP operators do not

generally apply for LECs due to the administrative complexity associated with the system. As a

result small scale CHP plants are often sized to meet onsite power demand and deliberately avoid

export to the grid.

Since the general elections in May 2010 the new Administration has proposed a reform of the CCL

system. Electricity generators (including CHP) are exempt from the CCL tax. The intention is to

remove this exemption and to introduce a new CCL rate based on the carbon content of the input

fuel. This change will be implemented in 2013. The carbon price will be determined based on the

historic prices of EU ETS allowances and an intended carbon price (targeted at a linear growth

from 2013 to 2020) to reach £30/ ton in 2020 and starting at £16/ton in 2013. In April 2011 the

Government announced that it intended to provide a relief from the tax to CHP plant although the

level of the relief is unknown. The variable nature of the tax (as it is relative to EUA prices) means

that the tax relief for CHP plant will create an unpredictable relief or incentive. As part of the new

carbon tax measures the Government signalled the intention to remove CHP LECs from 2013. The

Government has stated that it intends to preserve the status quo for CHP but precisely how this

may happen is unclear. The current uncertainty over support for fossil fuelled CHP has halted new

investment.

Electricity suppliers are required to source a proportion of their electricity from renewable

sources. Suppliers acquire Renewable Obligation Certificates (ROCs) from eligible generators when

purchasing electricity, in order to demonstrate the proportion of renewable supply delivered to

customers. For biomass CHP plants, an additional 0.5 ROCs are provided for each MWh of

renewable electricity generated in CHP mode. A biomass power only generator receives 1.5 ROCs

per MWh whereas a biomass CHP plant receives 2.0 ROCs per MWh. The UK Government decided

that it would not offer above 2.0 ROCs for any renewable power output and this prevented

bioliquid CHP and biogas CHP from receiving an uplift for operating as CHP rather than in power

only mode. Energy from Waste CHP can also receive 1.0 ROCs per MWh of renewable electricity

generated and an assumption is made that 50% of the waste burned is organic matter and,


March 2011 21

therefore, renewable. In effect, therefore, an EfW CHP plant receives 0.5 ROCs per MWh

electricity generated. The difficulty of achieving permanent ‘good quality CHP status for EfW CHP

plants under the CHPQA programme has meant that no EfW CHP plants have been developed

under the RO. The support for all generation types supported under the RO is undergoing a

triennial banding review in which support levels are examined. The Government intends to end

the RO in 2017 when it will be replaced with a new Feed in Tariff for renewables and low carbon

generation. The details on the new tariffs are not yet available.

From June 2011, the UK Government will introduce a new support system for renewable heat

generation. Initially, the support will apply only to commercial, public and industrial uses with

domestic support being introduced from 2012. The intention is that CHP plant will be able to

operate under the renewable electricity support mechanism (FIT or RO) and the heat mechanism

(the Renewable Heat Incentive -RHI) and claim support for the metered outputs of both heat and

power. As both outputs will be metered the Government sees no need to use the Cogeneration

Directive (and the CHPQA programme) as a mechanism for ensuring that high efficiency

cogeneration is deployed. The presence of twin incentives is intended to drive maximum

efficiency. The tariffs have been calculated based on heat only technologies and not separate CHP

band is being proposed. As a result it is unknown if support under the RHI will drive renewable

CHP in the UK or not. The reward for renewable biomass CHP is set at £25 MWh of renewable

heat. Support is available for biogas up to 200kWth but there is currently no support for biogas

under the FiT.

Embedded benefits are a payment made to generators connected to the electricity distribution

network in recognition that their electricity does not flow on the transmission network. The

payment is designed to refund the costs incurred in the charging system which assumes use of the

transmission network. This is not a subsidy or benefit for CHP or other embedded generators

rather a cost reflective mechanism for recognising non-use of the network. There are proposals

from some quarters to remove or substantially reduce the embedded benefits payment system.

2.3 Effectiveness of the Cogeneration Directive

Detailed below, by Member State, is growth of CHP with an anecdotal assessment of what

proportion of this is attributable to adoption of the Cogeneration Directive.

Austria

The report “Progress report according to Article 6(3) of Directive 2004/8/EG” was submitted to the

Commission in 2007 and states that support schemes hadn’t been in place long enough to


March 2011 22

measure progress. A subsequent report detailing changes in deployment of CHP against the

identified additional CHP potential for 2005-2020 of 2,379 MWe should be due this year (2011)

but was not yet available from the Commission’s website.

Large scale industrial predominantly from the pulp and paper industry in Austria are generally

CHP, producing 8 TWh pa. Little support is provided for this scale of CHP as a solid investment case

provides adequate incentive. Municipal CHP and district heating contributes another 7 TWh to

Austria’s annual 60 TWh electricity demand. The main area of CHP growth is smaller rural biomass

CHP plants, which currently receive a feed-in tariff. This growth has been driven in large part by

the Renewable Directive as opposed to the Cogeneration Directive.

Belgium (Flanders)

The Cogeneration Directive has had a powerful impact on the uptake of CHP in Flanders with rapid

increase in growth of CHP – the majority of which has been in industrial applications. Growth in

CHP installed capacity was greatest in 2005. The subsequent slowing of growth may, in part, be

attributed to early progress towards the Flanders Government 2012 CHP target which was passed

in 2008, with a total of 1.832MW of installed capacity. This shows a significant growth from the

1.100 MW baseline at the point the white certificate scheme started in 2004.

The Flanders Government is seeking to continue the increase in deployment of CHP and, in light of

the issues of potential oversupply of white certificates; the Government is carrying out a review of

support for CHP.

Source numbers for figures (VITO: WKK-inventaris)

Graph 1: Total installed CHP power in Flanders


March 2011 23

Graph 2: Installed CHP power in Flanders per technology

Graph 3: Installed CHP in Flanders per sector

Graph 4: Installed CHP in Flanders per fuel type


March 2011 24

Graph 5: Amount of produced CHP and renewable electricity

Denmark

The Cogeneration Directive has had little impact on uptake of CHP in Denmark due the level of

existing support and advanced level of deployment at the time the Directive came into force. A

mechanism for issuing Guarantees of Origin was established following the Cogeneration Directive,

but these, however, have attracted little value in Denmark and are rarely traded. Consequently

they have had little impact on the market or deployment of CHP.

Finland

As there is no support for CHP in Finland and, considering that most barriers to market entry were

removed with the 1995 market liberalisation, the Cogeneration Directive has had a very limited

impact on the attractiveness of CHP investment.

As noted above, the existence and expansion of heat networks enables CHP plant to sell both heat

and power competitively into the market. The natural efficiency of CHP over separate forms of

generation ensures that CHP investment is attractive and the Finnish CHP installed capacity is

gradually growing.

Key to the ongoing growth in the CHP market and maintenance of existing operations is the ability

of CHP operators to obtain a fair and realistic price for both the heat and power generated.

Germany

It has been hard to ascertain the impact of implementation of the Cogeneration Directive in

Germany as the new CHP law was introduced at the height of the financial crisis in 2009 and

investment in CHP slowed concurrently. Through 2010, investment was seen more in small scale

plant from up to 2000 kW CHP, however, it is anticipated that investment in all forms of CHP will

pick up in 2011.


March 2011 25

A study is currently being undertaken by Prognos AG and Berliner Energieagentur to assess

whether the current support mechanisms are anticipated to achieve Germany’s target of 25%

electricity generation from CHP by 2020.

Ireland

There has been little progress towards the potential of 800 MWe of installed CHP capacity by

2020, identified in 2009, from a 2008 baseline of 300 MW. The exception to this is the modest

growth in the sub-1 MW sector, but this has fallen to near zero following the removal of the SEI

deployment grant scheme and recent network changes. Ireland, however, will need growth in

large scale industrial plant in order to meet the identified CHP potential.

It is also believed that the lack of binding CHP target and defined responsibility for CHP within

Sustainable Energy Authority Ireland is a problem.

Netherlands

The Cogeneration Directive has not had a significant impact in The Netherlands. Apart from the

implementation of Guarantees of Origin, no other barrier removal or support for CHP has been

bought into force.

Currently (2011), the proportion of electricity generated by CHP in The Netherlands is just under

55%. In the forthcoming years, however, not much growth is expected in the installed capacity and

there may even be some decline.

Sweden

The Cogeneration Directive has not directly stimulated growth in Swedish CHP, as the financial

support for CHP was put in place before the Cogeneration Directive. Further to this, the Directive

has not stimulated additional uptake of high efficiency cogeneration, as all plant installed in

Sweden have been high efficiency as standard practice since before the Directive came into force.

Due to the advanced state of efficient generation in Sweden plant being installed now is bioenergy

and the amount of fossil fuelled CHP is falling9.

The proportion of district heating fuelled by CHP has increased over time. The Swedish Energy

Agency concluded in their 2010 Cogeneration Directive progress report that CHP electricity

9 Report pursuant to Article 6(3) of the Cogeneration Directive (2004/8/EC), Swedish Energy Agency, 1 June 2010, Ref.:

10-2010-487


March 2011 26

production was growing in both absolute terms and as a proportion of electricity production, see

table below illustrating growth in GWh generated by CHP by year.

Bioenergy CHP All district heating CHP

2004 2 975 7 501

2005 3 204 6 681

2006 3 565 7 170

2007 3 474 7 135

2008 3 803 7 212

2009 4 389 9 307

2010 5 251 12 560 Table 1: Growth in GWh generated by CHP each year

United Kingdom

The Cogeneration Directive provides the framework for existing support for both gas fired and

renewable CHP, however, as the Directive does not require of a member states to develop

incentives for operating CHP it has not been a key driver in UK Government policy. The Renewable

Energy Directive has created a far more powerful focus on delivering increased renewable energy.

A key value of the Directive has been using it to demonstrate that CHP saves a minimum of 10%

primary energy. This objective document is a valuable reference for industry and Government

when detractors of CHP suggest that it is of no value. The current proposals for a relief from the

new carbon tax and the potential for additional incentives for CHP will rely on the Directive for

determining good quality CHP.

The UK Government and other organisations have commissioned reports into the potential for

CHP. The UK low carbon transition plan indicated that CHP capacity would more than double to

15.5 GWe by 2020. Current 2010 levels are estimated to be around 7 GW. The policies to ensure

such growth have not however been put in place so it is difficult to see how such a step change in

growth will occur without a significant shift in policy.

Growth – amount installations, amount generation, proportion of all elec, proportion of all

DH, fuel type

2.4 Status of cogeneration - Incentives and barriers

This section contains a broad overview of whether CHP is growing in each Northern Region

country. Anecdotal reasons for this state of play, which identify changes in barriers and support


March 2011 27

for CHP, are documented here. Where possible, an indication of when changes occurred in

relation to adoption of the Cogeneration Directive, are included.

Austria

Small scale biomass CHP is the main area of growth in Austria and this sector is supported through

a feed-in tariff.

As only a small segment of the CHP industry receives financial support, the remaining proportion is

reliant on the spark spread (difference between gas and electricity prices) for their investment

case. The volatility of the spark spread is viewed as a barrier to further CHP growth.

A 2009 report was submitted to the Commission entitled “Report on the results of the analysis and

evaluations carried out in accordance with Article 9 of Directive 2004/8/EC – Cogeneration

Directive Administrative procedures”, which outlines the way in which CHP installations are

authorised. It was noted in the report summary that as CHP plant may have adverse effects on

local populations or the environment, these procedures have become increasingly complex and

lengthy, some taking several years to complete, which presents a material barrier to CHP

deployment.

Belgium (Flanders)

As noted earlier, the most rapid growth in the installed capacity of CHP occurred in 2005. As CHP

capacity has grown rapidly (the 2012 target was achieved four years ahead of schedule), the risk of

oversupply of white certificates could lower the marginal value of certificates, for transmission

connected CHP plant, to zero. The impact of such an oversupply of certificates would have a direct

impact on the investment case for new CHP and on the operational case for existing plant.

It may be that some investors foresaw the potential oversupply issues which led to the slowing of

CHP capacity growth in 2008-2009. Current estimates are that, with no intervention, the predicted

oversupply of white certificates would not be abated until 2020.

Whilst distribution grid connected CHP plant receive a minimum of 27€ per MWh, in many cases it

is thought that this will not be sufficient to keep the plant profitable; the market price for

certificates historically sat at 40€ MWh. As a result, there is an expectation that the current

growth in CHP installed capacity will cease for a period of one to two years.

It should be noted that these problems are due to the support system’s own success and that use

of a market mechanism, such as white certificates, carries the risk of oversupply as seen in

Flanders.


March 2011 28

Denmark

CHP in Denmark stopped growing in 2004/05 when the Danish Government moved its attention to

wind. A recent study by the Danish Energy Agency identified that whilst wind turbines are

increasing their contribution to electricity generation, small scale CHP is decreasing its share of the

market. Large scale condensing CHP power stations, however, have retained their contribution. It

is hard to isolate where demand for differing generation types originates due to the internationally

connected electricity markets.

In 2007 Denmark’s report to the Commission identified that although some barriers to CHP uptake

had been removed, the price of electricity would continue to be a barrier. Grid barriers have

largely been removed and local distribution and transmission companies and system operators are

obliged to set up a programme for internal monitoring with the aim of preventing discrimination

towards the users of the grid. In coming years the price of electricity will not be high enough to

allow for investment in new cogeneration capacity. This is attributed to the fact that the electricity

price is below the long-term marginal costs for a new plant. As older plants are taken out of

service, capacity will gradually fall and the price of electricity will rise to a level at which

investments may be profitable.

Finland

Only minor barriers to the further uptake of CHP were identified in 2009. The risk of policy

changes affecting funding and in turn investor confidence is still applicable in 2011. Variability and

volatility in the price of renewable fuels is also continues to be a significant barrier, due to the

attraction of tax rebates for the use of renewable fuels within electricity generation projects.

CHP capacity is continuing to grow steadily in Finland. The Finnish potential for CHP is considered

to be a function of the growth in heat networks and the total heat and electricity demand that is

still met by separate generation. The CHP potential has been identified as sitting principally within

the heat network market rather than in larger scale industrial deployment.

Germany

The amount of CHP in Germany is increasing from the baseline of 20.8 GWe in 2009. 2010 saw

small scale plant up to 2 MW built, whereas it is anticipated that larger scale installations will be

commissioned from 2010.

In 2007 barriers to further CHP uptake in Germany were identified as low payback periods

compared to the level of risk involved with installation. This has been exacerbated by the initial

reduction of wholesale and retail electrical prices from the electricity market liberalisation,


March 2011 29

availability and competition for fuels, additional costs of the EU ETS and administrative and

approval procedures.

Ireland

Two 80 MW installs contribute to around 50% of Irelands installed capacity. This decision by a

single organisation leads to the impression that uptake of CHP in Ireland is progressing, whereas

there is not a widespread use of this technology.

The original identification of barriers to CHP uptake suggested the following: Lack of a mature

energy intensive industry and Ireland’s population and urban density. The definition of CHP under

the Cogeneration Directive was perceived to be a barrier, in particular the definition of the term,

“economically justifiable demand”, support may have to be “scaled back” to reflect the proportion

to which they qualify under the requirements of the Directive. Typical payback periods sought by

many of the sites in Ireland is three to four years, with some sites requiring a payback period as

short as one year. CHP projects often fail to make these required “hurdle rates”. Grid connection

delays are also a recurrent problems faced by potential CHP installations.

It has been suggested that underpinning all issues listed above is a lack of commitment to CHP

from within Government.

Netherlands

In line with the Cogeneration Directive, The Netherlands submitted a report to the Commission in

2010 updating their analysis of additional potential for CHP as well as assessing progress against

the initial appraisal. This report identified a technical potential 7.7 GWe of new cogeneration in the

period up to 2020, in addition to the existing 12.9 GWe (from a baseline of 8.8GWe in 2005). The

lower economic potential for new cogeneration, which will vary with the carbon price, was

estimated to be between 2.3 and 3.4 GWe.

There is extensive use of CHP in The Netherlands currently, with CHP contributing 55% of Dutch

power. COGEN Nederlands however, expect this to decline in coming years, being pushed from

the market by newly built non-CHP coal and gas plants due to lack of financial support.

Barriers identified in 2007 included the following: fuel price volatility following electricity market

liberalisation, uncertainty in the CHP subsidy scheme due to its foundation on the “spark spread”

(differential between gas and electricity prices), the shortage of high tension grid capacity is

slowing down, or in some cases refusing, connection of renewable and sustainable cogeneration

plants to the networks.


March 2011 30

Sweden

No specific report is available on the Commission’s website regarding barriers to uptake of CHP.

The Öhrlings PricewaterhouseCoopers report “An assessment of the potential for high-efficiency

cogeneration in Sweden” produced in February 2005 however, identifies a range of areas whose

uncertainty has a negative impact on the investment case. The primary barrier to CHP uptake is

the removal of Green Certificate support planned for 2016. In the absence of the green certificate

system, the investment case becomes more sensitive to issues such as CO2 tax on cogeneration

and allocation of emission allowances. In addition uncertainty around taxation of cogeneration

energy, environmental aspects, the regulatory framework and the electricity market have an

impact. This impact can be observed through a lower than estimated volume of cogeneration

actually implemented.

United Kingdom

Installed CHP is growing slowly in the UK. The greatest area of market activity is in the sub 5 MW

market supplying public buildings and the commercial sector with CHP plants. Such CHP plants can

benefit from generating onsite power which is substantially cheaper than the cost of electricity

supply. The work for the CODE work package three project indicated that the 1 MW project had

the best modelled rates of return. There are some large scale CHP projects under construction or

consideration within industry but the current policy uncertainty is creating an investment hiatus.

Small scale CHP operators fail to achieve good value for exported electricity, often being offered

supplier rates which are so low as to cause a negative return with the cost of generating being

higher than the value of export. As a result small scale CHP plants are often run to scale down

generation when nearing generation export.

The UK electricity market is highly complex and entry is almost impossible. The large suppliers

hedge market risk through vertical integration – having both generation and supply businesses.

New entrants are unable to operate as vertically integrated entrants as this would require securing

equal generation assets and demand (customers) simultaneously. As many CHP operators are

independent market players, they are subject to risks not experienced by large vertically integrate

players which presents a highly significant barrier to market entry. The UK electricity market is

highly illiquid further increasing the risk to new entrants.

The lack of an established series of heat networks and a policy on domestic, commercial and

industrial heat has led to significant policy uncertainty for CHP operators and developers.


March 2011 31

2.5 Assess the real diffusion of cogeneration against the potential

An assessment of progress against baselines and technical and economic potentials is required by

article 6.1 in the Cogeneration Directive. A common metric for this assessment is not,

unfortunately, specified and could consequently be denoted in delivered energy (TWh), capacities

(MW) or % electricity market supplied by CHP. Where possible, additional details regarding sector

performance against targets and breakdown by CHP size and fuel type as detailed here.

CHP installed capacity and technical and economic potential reported to the Commission under

Cogeneration Directive Articles 6.1 and 10.1, as collated within CODE Work Package 2 in 2010, are

outlined in the table below.

Member State

Reported Installed Economic GWe

Technical GWe

Economic GWe

Estimated Installed GWe

Technical GWe

GWe

Austria 4.25 11.83 - 4.3 7.6 3.0

Belgium 2.09 - 3.24 2.1 1.2 1.2

Denmark 9.68 13.90 10.10 9.7 4.2 0.4

Finland 5.90 - - 5.9 1.2 1.2

Germany 20.83 - - 20.8 66.3* 66.3*

Ireland - 1.91 0.73 0.3 1.9 0.7

Netherlands 9.54 - - 9.5 0.0 0.0

Sweden 3.99 - - 4.0 3.8 3.8

UK 5.40 - 10.60 5.4 10.6 10.6 Table 2: Reported and estimated CHP capacity.

Austria

Reported installed capacity in 2009 was 4.25 GWe. From this baseline an estimate 7.6 GWe of

additional technical potential was estimated in WP2 however, only 3.0 GWe of this is seen as

additional capacity that may economically be installed.

A report entitled “Potential study for cogeneration” (Endbericht Studie über KWK-Potentiale in

Österreich) was submitted to the Commission in 2005, as required by articles 6.1 and 10.1 of the

Cogeneration Directive, outlining the potential for CHP in Austria. Based on a 2002 reference year

the report identified growth potential of 2.379 MWe between 2005-2020, however, it is not clear

whether this is technical or economic potential. This assessment does not specify the potentials in

relation to the timeframes 2010, 2015 and 2020 with appropriate cost estimates for each of the

timeframes in line with Annex 4 (C) of the Cogeneration Directive.


March 2011 32

CHP has an established use on industrial applications, which have a solid investment case. In the

recent past CHP was promoted in municipal applications to provide district heating and reduce city

pollution. Currently small scale biomass CHP is the main area of growth in Austria and this sector is

supported through a feed-in tariff. As only a small segment of the CHP industry receives financial

support, the remaining proportion is reliant on the spark spread (difference between gas and

electricity prices) for their investment case. The volatility of the spark spread is viewed as a barrier

to further CHP growth.

Belgium (Flanders)

Belgian reported installed capacity in 2009 was 2.1 GWe. From this baseline, 1.2 GW of additional

capacity was estimated in WP2, with no difference between technical and economic potential

implying all 1.2 GW should be economical to install.

As a result of the success of the scheme, current oversupply of white certificates, the 2012 CHP

potential was reached 4 years early, in 2008 (see previous questions). Subsequently in 2009, the

Government of Flanders re-evaluated the potential for CHP in the region. Two scenarios were

estimated; business-as-usual (BAU) and pro-CHP. Under the BAU scenario the Government

estimated that CHP could grow to 2500 MWe installed by 2020 but under the pro-CHP “growth”

stance that figure could grow by 500 MW to 3000MWe. The adequacy and longevity of

Government support are considered to be key features to achieving these targets.

Growth can be seen in particular areas. The figure below shows the number of CHP certificates

(directly related to the primary energy savings) issued in Flanders per technology. It can be seen

that the largest amount is for internal combustion engines, many of which are in green houses.

Almost 50% of electricity generated for new greenhouse installations is from CHP. The growth of

CHP in buildings and biomass CHP continues to be rather limited.


March 2011 33

Graph 6: Number of CHP certificates in Flanders per technology Source: VREG (Vlaamse regulator voor elektriciteit en gas)

Denmark

In 2007, The Danish Energy Authority issued the “Report to the European Commission in

connection with the implementation of the Cogeneration Directive 2004/8/EC 21” in line with

articles 6.1, 6.3, 9.1, 9.2, 10.1 and 10.2; which details CHP legislative framework, barriers, potential

and promotion of cogeneration to date. Across a range of sectors this report identified installed

capacity of 9.6GWe, a technical potential of an additional 13.9 GWe, but only 10.1 GWe as

economically viable.

Reported installed capacity in 2009 was 9.7 GWe. From this baseline 4.2 GWe of additional

technical potential was estimated in WP2, however, only 0.4 GWe of this is seen as additional

capacity that may economically be installed.

It is assumed that Denmark is on track to achieve their potential of an additional 10-13 GWe

increase from 9.7 GWe, as stated in their report to the Commission in 2007. Whilst there could be

an increase in district heating and consequent increase in demand for CHP, as energy efficiency of

buildings improves, the heat demand is not likely to increase overall. There is likely to be

additional growth seen in the microCHP market.


March 2011 34

Finland

Reported installed capacity in 2009 was 5.9 GWe. From this baseline an estimate 1.2GW realistic

additional capacity was estimated in WP2, with no difference between technical and economic

potential implying all 1.2 GW should be economical to install.

The 2009 report for the Ministry of Employment and the Economy identified specific targets for

industrial and district heating cogeneration in 2010 and 2025. The combined total for 2025 is 41.9

TWhe.

Currently, CHP supplies about 40 per cent of total electricity demand (as of 2010) which equates

to about 27 TWhe compared to a total demand of between 80 and 90 TWh annually.

Of district heating networks, which deliver the heating requirements for 50 per cent of buildings in

Finland, between 70 and 80 per cent of the heat was delivered from CHP.

With such a high penetration of CHP both in the electricity market and in the district heating

market, the potential for further growth in installed capacity is clearly limited. It is anticipated,

however, that there will be continuing demand for new installations of small CHP in part to

replace ageing CHP assets on heat networks.

Germany

Reported installed capacity in 2009 was 20.8 GWe. From this baseline 66.8 GW of realistic

additional capacity was estimated in WP2, with no difference between technical and economic

potential implying all 66.8GW should be economical to install.

The 2007 report on potentials identified 328 TWhth pa and 351 TWhe pa as the economic potential

in Germany.

The German Government commissioned a study in December 2010 to assess the diffusion of CHP

to date against the stated potential of 66.3 GWe stated by the German Government in their

“Analysis of National Potential” submitted to the Commission. This document is intended to

inform the evolution of the German CHP law and will be available later in 2011.

Ireland

Reported installed capacity in 2009 was 0.3GWe. From this baseline an estimate 1.9 GWe of

additional technical potential was estimated in WP2, however, only 0.8 GWe of this is seen as

additional capacity that may economically be installed.


March 2011 35

The potentials report submitted to the Commission in 2009 identified a range of potential capacity

from 366 to 773 MW in 2020.

A progress report for Ireland has not yet been submitted to the Commission and therefore

progress to date, against this identified potential cannot be assessed.

Netherlands

Reported installed capacity in 2009 was 9.7 GWe. From this baseline no additional capacity was

identified.

The 2010 report on potentials submitted to the Commission identified a maximum technical

potential of 7.7 GWe of new cogeneration by 2020 (on top of the existing 12.9 GWe) but of this an

economic potential for new cogeneration of just 2.3 to 3.4 GWe.

The Netherlands has achieved approximately half of its identified technical CHP potential (at

12.9GWe in 2010 with a further 7.7GWe potential, this corresponds to just under 55% of the

country’s electricity being generated by CHP), however, under the current regime this is likely to

contract without additional support.

Evidence of this trend in industrial CHP has already been identified, by COGEN Netherlands, where

run hours have declined as plant is switched off during off-peak hours. Whilst the amount of

installed power is roughly stable for industry, the question facing industry in the future will be

whether to replace existing plant with new cogeneration or separate production of heat and

purchase of electricity from the grid. The only sector in which CHP has grown over the last few

years was horticulture (gasmotoren - gas engines).

Sweden

Reported installed capacity in 2009 was 4.0 GWe. From this baseline, 3.8 GW of realistic additional



The 2005 report on potentials to the Commission reported an economic potential of 14 TWh for

2010, approximately 15.5 TWh for 2015 and 17 TWh for 2020.

Anecdotally, renewable CHP is the area that is growing. There have been just two new CHP-CCGT

built recently but it is unlikely that there will be any more. New CHP uses biomass or waste as

fuels.


March 2011 36

United Kingdom

Reported installed capacity in 2009 was 5.4 GWe. From this baseline 10.6 GW of realistic additional



The report to the Commission in 2005 identified an installed baseline of 1.502 CHP units with a

total electrical capacity of 5.440 MWe, generating 27TWh of electricity and 51 TWh of heat.

Potential to 2015 suggested 94 TWhth, 81TWhe (12.5GWth and 10.5GWe). This does not include

renewable CHP, trigeneration or microCHP. The current target identified by the UK Government in

the Low Carbon Transition Plan is 15.5GW by 2020.

As the UK CHP market is principally located in the industrial sector (from an installed capacity

perspective) potential studies have tended to focus on a growth in industrial centres. The potential

for CHP serving extensive district heating networks in the UK has not been significantly explored

by Government and, therefore, it may be that the potential for CHP in the UK is greater than

currently considered.

The support for CHP, in the form of exemptions from the CCL and Enhanced Capital Allowances

(not accessible by energy utilities) has led to a broadly sustaining level of subsidy with very limited

net growth in CHP capacity. To achieve the potentials such as the 15.5 GW by 2020, the industry

believes that a far more significant level of support for CHP is needed. In addition large CHP plants

are associated with facilities often owned by large multinational corporations. In these

circumstances the support for CHP is not evaluated compared to installing a boiler but also to

support in other nations. With both support and policy rhetoric in Germany and Flanders being

stronger, the potential for companies to relocate or invest in CHP in these countries may be

greater.

The need to decarbonise the UK economy by 2050 has led to a series of projects focussing on how

this should be done. The impact of these has often been a foreshortening of vision within

Government leading to a perspective that all that would be needed in 2050 should happen in the

immediate future. CHP has suffered as a result of this narrative as the role of gas in the

decarbonisation process is often lost.

Renewable CHP is growing in the UK and there are a number of projects under construction or

consideration. The effectiveness of the new renewable heat incentive will be the determinant of

whether renewable CHP grows significantly in the near future.

The requirements under planning law to seek opportunities to operate plant in CHP mode rather

than as power only appears to have ensured that plant are located away from a potential heat


March 2011 37

load due to the substantial costs of building heat networks. There are a number of biomass power-

only projects that could effectively operate as CHP plants making optimal use of the limited

biomass resource but currently, it appears that, if built, the projects will operate in power only

mode.

2.6 Progress report

Outlined below is an anecdotal assessment of whether the Cogeneration Directive Progress

Reports are an effective mechanism for assessing Member State movement against baselines and

stated potentials. Suggestions for improvement of the contents and frequency of the Progress

Reports are captured here. The status of Member State Progress Report submissions to the

Commission are also detailed below.

Austria

As of April 2010 a second report detailing progress against the identified potential in respect of

Article 6.3 (deliverable 10.2) of the Cogeneration Directive had not been submitted to the

Commission.

Anecdotal feedback suggested that the Progress Reports are a useful lobbying tool and provide a

basis by which to contrast countries, but did not drive CHP deployment in their own right. No

suggestions for improvement were put forward.

Belgium (Flanders)



Commission.

Overall the Member State progress report is of value, although this is limited in part due to the

fact that energy policy is devolved to the three regions of Belgium. The member state report,

therefore, combines information from all the three regions and specific differences, both in type

of CHP potential and Governmental disposition towards the growth of the CHP market in a given

region may be lost.

Consultants VITO, prepare an annual statement for the Flanders Government on an annual basis.

As well as being region specific and, therefore, taking account of the opportunities for industrial

CHP development, the report being produced annually, proves a more dynamic source of

information about the progress of CHP in Flanders. This report, therefore, is a more valuable

report than that produced for the whole of Belgium and submitted to the Commission.


March 2011 38

Denmark



Commission.

Denmark does not consider the Cogeneration Directive progress report a valuable instrument in

improving penetration of CHP. The focus in Denmark is very much about a move from fossil to

renewable fuelled CHP.

Finland



Commission.

The Progress report is not seen as valuable in Finland since CHP uptake is not driven by CHP

specific policy. The uptake and growth of the CHP market is widely anticipated to be steadily

growing and reliable so that investors are less likely to use the progress report as part of an

assessment of the regulatory environment.

Germany



Commission.

Germany views the Member State progress reports as a valuable tool to assess progress within

each Member State. They are, however, less useful for cross country comparison as, even though

every effort has been made to create an equal footing for comparison, this has not been achieved

and, for example, analysis works from different base years within reports.

Ireland



Commission.


March 2011 39

Netherlands

The Energy Research Centre of the Netherlands submitted a report to the Ministry of Economic

Affairs, “The potential for high-efficiency cogeneration in the Netherlands”, in March 2010 in order

to comply with the Cogeneration Directive’s requirement for a four yearly progress report.

The report, however, is not viewed as a valuable tool for driving CHP uptake in its own right. This is

possibly because the Cogeneration Directive itself has not facilitated positive change for CHP in

The Netherlands.

Sweden

Sweden submitted original progress report in June 2010; consequently the subsequent second

progress report will not be due until 2014.

The Cogeneration Directive has had a very small impact on the development of CHP in Sweden, as

the financial support for CHP was put in place before the Cogeneration Directive.

United Kingdom



Commission.

The principle of the progress report is a good one but it is vital that the Commission ensures that

all member states submit a progress report and sets out a series of key questions and a template

to ensure that the necessary data for comparative evaluation are available. The progress report

currently appears to indicate the attitude of the member state towards CHP rather than an

objective assessment as to whether that member state could grow CHP and by how much.

The UK is efficient at submitting progress reports to the Commission but the lack of a full suite of

reports from all countries means that they UK submission is of limited value. As the Cogeneration

Directive does not require that CHP be actively supported, the progress report is not measured

against any clear requirement of the member state. A stronger commitment to CHP in the Revised

Directive will enable member states to indicate how CHP has benefitted or not.

A potential improvement to the reports could be a requirement to list the installed capacity of

power-only generation stations and the installed capacity of CHP stations commissioned over a

given time period such as a rolling four year period. This would enable the Commission to

determine whether the Member States was actively perusing energy efficiency in generation.


March 2011 40

3. Conclusions

Some Northern Region Member States considered the Cogeneration Directive a more helpful tool

for increasing deployment of CHP than others and this is due, in part, to their different stages of

development with regards to CHP. This in turn affects the type of support offered for CHP and the

patterns of CHP growth. Some assessment of the history of cogeneration as well as emphasis given

to energy independence and decarbonisation within a country would provide valuable context

when considering the impact of the Directive in Member States and the related additional CHP

deployment.

By way of example, lack of support for fossil fuel CHP could mean two very different things; a

country has not yet recognised its potential and should put some support in place or fossil CHP has

been very well supported for years and is the norm, the country may now only be supporting

renewable CHP with the aim of moving all generation to renewables.

For those countries which had significant penetration of CHP when the Directive was instated in

2004, this grounding of a comprehensive appreciation of efficient generation has led to a current

focus on decarbonisation. Over this time period, financial support for CHP in countries such as

Denmark and Sweden has moved from gas-fired plant, to currently incentivising only renewable

CHP. Where support for CHP or a particular branch of CHP is not available, this does not

necessarily indicate a lack of support by the Member State, but could reflect the fact that there is

a solid investment case for CHP without support, such as industrial CHP in Austria.

Following logically on from this, whether countries attributed CHP growth in their Member State

to the Cogeneration Directive was dependant on the areas of growth. For example, those

countries which had a high level of CHP penetration at the point the Cogeneration Directive came

into force would not attribute continued growth to this Directive. Growth in renewable CHP could

well be attributed to the Renewable Energy Directive.

Article 6 (3) of the Cogeneration Directive states: “Member States shall for the first time not later

than 21February 2007 and thereafter every four years, following a request by the Commission at

least six months before the due date, evaluate progress towards increasing the share of high-

efficiency cogeneration.” None of the nine Northern Region countries had submitted second

report of Progress against Potential, in respect of Article 6.3. the Netherlands submitted a report

in 2010, but this appeared to be a more detailed appraisal of technical and economic potential

building on the 2007 appraisal, rather than assessing progress to date. A lack of enforcement from

the Commission on timely reporting means that reports are developed by Members Sates at

different times. In addition to this temporal aspect, a clear area of improvement could be


March 2011 41

development of a Progress Report template which would facilitate cross country comparison as

well as ease completion.

Just over half of the Northern Region members reported that the Progress Reports were a useful

tool for driving CHP deployment. Others sited the reports as a useful lobbying tool and for

providing a basis from which to compare countries.