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30 Nov 2016

EU Clean Energy Package: "Energy efficiency first" approach a step in the right direction

COGEN Europe welcomes the renewed commitment to the “energy efficiency first” principle in the European Commission’s “Clean Energy for All Europeans” package released today. To unlock the potential of high efficiency cogeneration, the ‘energy efficiency first’ principle should be consistently applied across all the legislative proposals in the Package, and across the whole energy system, from customers right through to generators, taking an integrated approach across heat and power.

Today, high efficiency cogeneration, or combined heat and power (CHP), generates 10.5% of the electricity and 15% of the heat produced in Europe, improving the efficiency of buildings for householders, small businesses and public authorities and increasing the competitiveness of EU-based industry, while contributing to grid stability and the integration of renewable energy.

Reaping the benefits of efficient decentralised generation, like CHP, requires a series of actions:

Empowering active energy consumers

COGEN Europe supports the Commission’s vision on active consumers playing a key role in the EU’s energy transition. On-site or embedded CHP enables domestic, commercial and industrial energy users to efficiently produce their own heat and electricity, while still enabling them to engage in demand response or export electricity to the grid during peak demand periods.

Rewarding flexible CHP generation

In addition to facilitating access of self-produced electricity to the different power markets, embedded CHP should also count towards adequacy assessments and be able to fairly access capacity mechanisms, whenever deemed necessary.

Removing administrative barriers

Lengthy grid connection for CHP installations remains a barrier in many Member States, which can be overcome by retaining the reference to the “install and inform” simplified procedure in Article 15 of the Energy Efficiency Directive.

Not forgetting heat

Incentivising biomass energy production in CHP mode will help ensure that we are using our limited and valuable biomass fuels as efficiently as possible while increasing renewables in heating and cooling. The Commission’s proposal relating to biomass with high efficiency CHP in the Renewable Energy Directive recast is welcome but will have limited impact unless it is applied to a higher share of installations (i.e. smaller than the proposed 20 MW threshold).

In addition, European industrial sites requiring high grade heat (e.g. steam) for their industrial processes should be reassured that the high efficiency CHP installed on-site can be operated without compromising on the security of heat supply – a key principle now removed from Article 15 of the Energy Efficiency Directive (2012/27/EU). It is thus important that the security of heat supply is one of the main criteria when grid access rules for industrial CHP (i.e. priority of dispatch and priority access to the grid/curtailment) are decided.

Counting energy efficiency gains in a transparent, comprehensive and robust way

COGEN Europe believes that energy efficiency gains should be measured in primary energy savings, in order to account for efficiency improvements across the whole supply chain. In this respect, the primary energy factor for electricity (EU PEF) used to convert final into primary energy should be based on a robust methodology that reflects inefficiencies in today’s electricity system and incentivises real efficiency improvements.

The limitations of using an average EU PEF across different policy objectives should also be recognized, and thus COGEN Europe recommends conducting further assessment to account for the seasonal and/or marginal variations in electricity production and use.

The newly released Package introduces provisions that could enable Member States to create stable and predictable policy frameworks, creating new opportunities for the CHP sector or more fairly rewarding the added value of cogeneration. COGEN Europe is committed to contributing to the upcoming legislative process, ensuring that the “Clean Energy for All Europeans” package delivers positive outcomes in Europe.

Read the full PDF version of the press release