A new study by IDC Energy Insights provides an overview of cogeneration/combined heat and power (CHP) methodologies for utilities and vendors and presents critical factors to consider before embarking on any cogeneration project. It also evaluates how cogeneration approaches are being applied across Europe, covering current deployment levels, the regulatory environment, and regional and utility trends.
Cogeneration currently accounts for about 11% of electricity production in Europe, but recent trends show that cogeneration is seen as a key strategy in the battle to improve energy efficiency, increase fuel security, and reduce carbon emissions, and is increasingly expected to play a key role in Europe's, and the world's, future energy landscapes.
According to the study, the majority of CHP in Europe is fossil-fuel based, but there is a growing trend toward using renewable fuels. In particular, there is likely to be a significant move toward biomass-based CHP in the next 10 years. Currently, CHP is typically used in countries with an existing district heating (DH) network, as in many parts of northern, Central, and Eastern Europe, and in countries with energy intensive industries. Though CHP deployment across Europe has increased substantially in the last two decades, growth has slowed or even declined in recent years in many countries. In countries such as Denmark and Finland this is primarily a result of CHP deployment approaching saturation, while in other countries it is due to economic factors such as fluctuating gas and electricity prices and shifting focus to renewable energies. But the renewed push toward high-efficiency CHP and biomass-based CHP is likely to stimulate new growth.
"Though there has been limited growth in the deployment of cogeneration technologies in the last few years, there has recently been a renewed push across Europe with new policies and incentives introduced," said Daniella Muallem, senior research analyst, IDC Energy Insights EMEA. "With the exception of some Nordic countries, cogeneration has been under-deployed across Europe and there remains considerable potential. Given rising energy prices and the potential benefits of cogeneration in terms of energy efficiency and reduced emissions, there is significant room for growth if the new policies succeed in overcoming market and regulatory barriers."
The study highlights key utility trends for the CHP market, including:
- Most of the large energy utilities in Europe include some form of CHP generation in their portfolio, but a significant share of CHP is operated by alternative players, including contractors, energy services companies, IPPs, regional or municipal utilities, and industrial and engineering companies. Among the major European utilities, those providing heat for DH have large-scale (100s of MW) central CHP capacity.
- Though many utilities are looking to expand and build new power plants, only a few are actively pursuing CHP, with the majority looking to improve efficiency technologies and cleaner coal solutions for conventional thermal electricity generation.
- Across Europe, utilities are moving to reduce CO2 emissions by increasing their share of renewable/biomass energy capacity. As part of this, several utilities are already active in biofuel or waste-based CHP and plan to expand in this area.
- Utilities active in transitional economies in Central and Eastern Europe (including Russia) are seeking to expand large-scale CHP capacity combined with more efficient prime mover technologies for gas/coal-fueled power generation.
- A number of electric and gas utilities, particularly those active in Germany, the U.K., and the Netherlands, are promoting the introduction of micro CHP to the market, working with a range of manufacturers.
The study, Business Strategy: Cogeneration in Europe (IDC Energy Insights #EIRS02T, August 2011), is available to purchase on idc.com. For more information, or to arrange a one-on-one briefing with Daniella Muallem or Roberta Bigliani, please contact Kanupriya at kanupriya@idc.com.
Cogeneration currently accounts for about 11% of electricity production in Europe, but recent trends show that cogeneration is seen as a key strategy in the battle to improve energy efficiency, increase fuel security, and reduce carbon emissions, and is increasingly expected to play a key role in Europe's, and the world's, future energy landscapes.
According to the study, the majority of CHP in Europe is fossil-fuel based, but there is a growing trend toward using renewable fuels. In particular, there is likely to be a significant move toward biomass-based CHP in the next 10 years. Currently, CHP is typically used in countries with an existing district heating (DH) network, as in many parts of northern, Central, and Eastern Europe, and in countries with energy intensive industries. Though CHP deployment across Europe has increased substantially in the last two decades, growth has slowed or even declined in recent years in many countries. In countries such as Denmark and Finland this is primarily a result of CHP deployment approaching saturation, while in other countries it is due to economic factors such as fluctuating gas and electricity prices and shifting focus to renewable energies. But the renewed push toward high-efficiency CHP and biomass-based CHP is likely to stimulate new growth.
"Though there has been limited growth in the deployment of cogeneration technologies in the last few years, there has recently been a renewed push across Europe with new policies and incentives introduced," said Daniella Muallem, senior research analyst, IDC Energy Insights EMEA. "With the exception of some Nordic countries, cogeneration has been under-deployed across Europe and there remains considerable potential. Given rising energy prices and the potential benefits of cogeneration in terms of energy efficiency and reduced emissions, there is significant room for growth if the new policies succeed in overcoming market and regulatory barriers."
The study highlights key utility trends for the CHP market, including:
- Most of the large energy utilities in Europe include some form of CHP generation in their portfolio, but a significant share of CHP is operated by alternative players, including contractors, energy services companies, IPPs, regional or municipal utilities, and industrial and engineering companies. Among the major European utilities, those providing heat for DH have large-scale (100s of MW) central CHP capacity.
- Though many utilities are looking to expand and build new power plants, only a few are actively pursuing CHP, with the majority looking to improve efficiency technologies and cleaner coal solutions for conventional thermal electricity generation.
- Across Europe, utilities are moving to reduce CO2 emissions by increasing their share of renewable/biomass energy capacity. As part of this, several utilities are already active in biofuel or waste-based CHP and plan to expand in this area.
- Utilities active in transitional economies in Central and Eastern Europe (including Russia) are seeking to expand large-scale CHP capacity combined with more efficient prime mover technologies for gas/coal-fueled power generation.
- A number of electric and gas utilities, particularly those active in Germany, the U.K., and the Netherlands, are promoting the introduction of micro CHP to the market, working with a range of manufacturers.
The study, Business Strategy: Cogeneration in Europe (IDC Energy Insights #EIRS02T, August 2011), is available to purchase on idc.com. For more information, or to arrange a one-on-one briefing with Daniella Muallem or Roberta Bigliani, please contact Kanupriya at kanupriya@idc.com.
