3 March 2023
According to the latest survey of COGEN Europe members, cogeneration technologies continue to play an important role – notably in industry and district heating systems where they enhance efficiency, reduce cost and strengthen resilience. In the coming years, cogeneration is well placed to make the most effective use of low-carbon and renewable energy sources, especially in the context of increasingly integrated, decarbonised and decentralised energy systems.
The COGEN Europe Snapshot Survey 2022 is based on contributions provided by national experts in 16 countries – including 15 EU Member States and Turkey/Türkiye. The participating EU countries (Austria, Belgium, Czechia, Denmark, Finland, France, Germany, Greece, Italy, Poland, Portugal, Romania, Slovenia, Spain & Sweden) represent in total nearly 90% of the installed CHP capacity in the European Union.
According to the survey results, the cogeneration market shows signs of growth in Finland, Germany, Poland and Turkey. Signs of decline can be seen in Denmark, Portugal and Spain. Sudden drops in the cogeneration capacity or generation are typically determined by both market and policy factors impacting the energy sector and the broader European economies. National responses to the energy price crisis varied significantly across the EU. In certain countries such as Greece, Portugal and Spain, a lack of focus on preserving the operation of cogeneration plants led to unintended short-term disruptions and an increased overall energy consumption.
"This survey coincided with the energy crisis and the post-pandemic period," explains COGEN Europe’s Head of Policy, Alexandra Tudoroiu-Lakavičė. "(While) in general, cogeneration has been stable across Europe, it has of course been impacted by the pandemic, by the lower economic performance as well as by the energy price crisis."
"Given the increase in energy prices, cogeneration has been seen as an energy efficiency solution and as a way to protect industry and small businesses from these energy price hikes," she continues. "So it has been one of the solutions that industry has chosen to help them hedge against the energy crisis generally."
The future outlook for the next 5 years remains favourable, despite uncertainties linked to energy markets and an unstable regulatory environment. In particular – industry, SMEs and district heating operators are keen to renew their existing cogeneration plants or install new systems, in order to further diversify their energy supplies, hedge against energy price volatility and reduce their carbon footprints. A fuel switch to higher penetration of renewable sources is also an established trend in the cogeneration sector, provided that policy incentives are in place to prioritise the most efficient use of these valuable fuels.
"For the coming five years we see that there will be growth in the cogeneration sector: primarily for industry and district heating, and in particular renewables-based CHP," says Ms Tudoroiu-Lakavičė. "This is of course driven by policies in the EU as well as national policies which are really pushing for higher uptake of renewable energy fuels and more diversified fuels across the whole energy sector. There is of course a focus on biomass in some countries, and biogases like biomethane as the main energy sources for CHP."
A principal source of uncertainty for new cogeneration investments is the unstable policy environment, compounding the unpredictable market conditions in many European countries. While national energy and climate plans recognise cogeneration as a vital solution for the future energy mix, policy and regulatory barriers persist. The sector is therefore hopeful that negotiations on relevant EU legislation and policy developments at national level will put energy efficiency first and prioritise cogeneration investments, as part of an ambitious approach to reaching Europe’s energy and climate objectives.