Last week, the European Investment Bank (EIB) took a landmark decision. It will cease lending to inefficient and polluting power plants and prioritise investments in more efficient and cleaner solutions such as cogeneration (also known as combined heat and power). This is a strong signal from a bank playing a critical role in funding energy projects in European Union (EU) member states. It is an important tool for countries to meet their European energy and climate targets.
This is a very timely decision by the EIB as energy efficiency efforts are slowing down. The bank has pointed out that an investment gap in energy efficiency remains. As decarbonising our energy system and making it more efficient are becoming more pressing, the EIB decided to shift its support towards low-carbon power generation, including renewables and most efficient cogeneration projects as the solutions for a greener Europe.
The choice to support investments in cogeneration is logical. Cogeneration cuts carbon emissions and reduces energy bills while securing a constant production of heat and electricity. This is much needed for our industry, public buildings such as schools and hospitals and even our homes. Furthermore, cogeneration will improve the efficiency of new fuels including hydrogen, biogas and synthetic gasses. Finally, cogeneration is a decentralised solution and a great integrator of the gas, heat and electricity network by transforming gas into heat and electricity at local level.
Today, cogeneration supplies 11,3% of electricity and 16% of heat in the EU. This contributes up to 24% of the EU 2020 green house gas target and 18% of the EU 2020 energy efficiency target. With the right policy framework in place, the electricity and heat supply from cogeneration could double in Europe by 2030, increasing its contribution to the European energy efficiency and carbon emissions reduction goals. Therefore, we welcome this decision by the EIB to include cogeneration in its lending policy and we hope that European, national and local authorities will follow its example.