Cogeneration perspectives in the EU from the focus of CODE project Stane Merše CODE leader Eastern Region Jozef Stefan Institute, Energy Efficiency Centre, Ljubljana, Slovenia. Cogeneration Directive requirements Cogeneration Directive 2004/08/EC completed in Brussels end of 2008. European Directive developed under the energy strategy t to promote cogeneration for its contribution to security of supply and energy efficiency. Sets up a policy framework for the promotion of cogeneration. The Directive requires Member States to report on several aspects their cogeneration use and promotion. Report on Progress Put Guarantee of origin and statistical reporting in place Estimate Cogeneration potential Review support mechanisms Identify Barriers 1
CODE project 30 month project funded by IEE and COGEN Europe organisations Independent view of the progress of fmember States t under the CHP Directive Regional structure across Europe gathers input from stakeholders on impact of the Directive implementation as it develops: Eastern region: CZ, ES, HU, LV, LT, SK, SI Jozef Stefan Institute (JSI) Northern region: AT,BE, DK, FI, DE, IEL, NL, SE, UK Combined Heat and Power Association (CHPA), South-Eastern region: BG, CY, EL, RO, Hellenic Association for the Cogeneration of Heat and Power (HACHP) South-Western region: FR, IT, LU, MT, PT, SP Federation of the Scientific and Technical Association (FAST) Find more information on Electricity generated by cogeneration in 2008 Total installed CHP electrical capacity: 100 GW el Total CHP electricity production: 370 TWh el Total CHP heat production: 845 TWh h 2
European economic potential for cogeneration in 2020 122 GWe of CHP additional generating capacity 455 TWh of Electricity 500 455 1,000 TWh of Heat CHP capacity, electricty [G GW el, TWh el ] 400 300 200 100 0 103 122 CHP Capacity 364 Yearly electricity generation Existing units 2007 Additional economic potential 2020 European economic potential for cogeneration in 2020 3
Additional technical and economical potential by 14 MS in the year 2020 Share of CHP in total electricity generation in 2007 < 5% 5 10 % 10 20 % 20 30 % > 30 % Eastern region: 16,7% EU 27: 10,9% Source: Eurostat 4
Share of CHP in total electricity generation 2005-2009 Source: Eurostat Installed CHP capacity 2005-2009 Installed CHP Capaci ity [GWel] 10 9 8 7 6 5 4 3 2 1 0 CZ EE HU LV LT PL SK SI 2004 2005 2006 2007 2008 Source: Eurostat 5
Cogeneration capacity and electricity generation by MS in 2008 (Eurostat) TWh el ] CHP 2008 [Gwel, 30 25 20 15 10 5 0 4,8 12 0,9 1,6 2,2 8 0,5 2 1,1 2 8,8 26 2,2 7 0,3 1 Capacity Electricity Summary of cogeneration additional potential in the Eastern region: potential reported Total additional regional technical potential is more than 52 GW of installed electrical capacity and 137 TWh of electricity generation in the year 2020. Total economic potential is close to 14 GW of installed electrical capacity and 39 TWh of electricity generation: only 26% of evaluated technical potential the highest share in modernisation and upgrade of district heating and industry micro cogeneration (services and households) is not expected as wider market economic attractive (not yet?) at least 10% share of cogeneration from renewable energy sources Rather conservative? Increased share of natral gas CHP (Poland?) faster development of new small scale technologies? 6
Eastern region technical potential for cogeneration in 2020 22 20 18 CHP capacity [GW el ] 16 14 12 10 8 6 8,8 2,8 21,6 13,6 4 2 0 Poland Czech Republic 0,5 0,0 0,1 0,5 0,6 0,4 Slovakia Hungary Estonia Lithuania Latvia Slovenia TOTAL exist. TOTAL econom. Existing installed CHP capacity Additional economic potential 2020 Eastern region economic and technical potential for cogeneration in 2020 l] CHP capacity [GW e 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 73,6 8,8 Poland 36,1 2,8 Czech Republic 15,1 54 5,4 46 4,6 0,5 0,5 0,4 2,3 0,6 0,3 0,1 Slovakia Lithuania Slovenia Latvia Estonia Additional technical potential Additional economic potential 7
Eastern region economic and technical potential for cogeneration in 2020 Barriers to cogeneration expansion identified by Member States in the region Not sufficient or risks at support mechanisms: support limited only on district heating CHP (EE) insufficient support, not reflecting actual market conditions unpredictable, dependant on regulator decisions (PL) Economic: high cost of refurbishment/construction of district heating network (low cost of separate heat production/supply) Regulation on setting district heat price High CO 2 costs / carbon leakage to the non ETS sector Other: Access to the grid (EE) IPPC administrative procedures & public acceptance 8
Summary and recommendations Share of cogeneration electricity in Eastern region (16,7% in 2007) is above EU average (10,9%), mainly due to traditionally well developed district heating systems. Implementation status of the Directive in the region is quite satisfactorily, although information from MS were delayed. Directive was completely implemented in all MS in the region. Harmonised methodology for evaluation of cogeneration potential would contribute to even more realistic and comparable values of evident huge potential. Feed-in tariffs or premiums as the most proven and successful support mechanism for high efficient cogeneration are implemented in all MS, except in Poland (certificate and quota obligation). Cogeneration Directive update In 2010 the Commission has to report on the effectiveness of the existing support mechanisms. The Reference values for separate production of heat and power aredue for review in February 2011. COGEN Europe:existing values have not been in operation long and that in this period (January 2008 to present) there has been no significant change in technology. Discussions around changes in the Cogeneration Directive recast of the Energy Services Directive (ESD) and the Cogeneration Directive, including a possible new overarching Directive for Energy Efficiency. intentions for a review are expected to be published in the Commissions promised Energy Efficiency Action Plan (now being referred to as an Energy Efficiency Strategy) to be published around November 2010. 10 November in Brussels: CODE debate in the European Parliament on European Cogeneration Roadmap 2020. 9
Economic analysis CHP projects in EU Calculation of economic indicators for 5 typical CHP projects in 27 EU MS: With and without support/benefits First results for Slovenia: IR RR [%] 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Engine NGEngine NG Engine Oil ST Coal CC NG 50kWe 1MWe 1MWe 12MWe 66MWe IRR without support IRR with support New Slovenian CHP support scheme More information on: http://www.mg.gov.si/si/delovna_podrocja/energetika/sektor_za_razvoj_energetike/nova_podporna_shema_proizvo dnji_elektricne_enrgije_iz_ove_in_spte/ http://www.borzen.si/eng/ http://www.agen-rs.si/en/ 10
CHP potentials in Slovenia: Paper mills Replacement of existing old 6 MWe steam condensing turbine with new 20 MWe combined cycle CHP unit: 15 MWe gas turbine with heat utilisator (Natural gas)) 5 MW steam turbine success cases for use in promotion of CHP Investment: ~30 million EUR New support scheme for CHP in Slovenia, approved in 2009, finally enabled favorable conditions for project implementation, after the decade of looking for proper solution for the location. Premium: ~40EUR/MWh el IRR: 13% Simple Payback Period: 6 years Micro cogeneration in Service sector in Slovenia Small CHP units up to 50 kwe: 5 kwe Senertec gas engines TEDOM gas engines Natural a gas; LPG, Fuel oil Hotels, schools, home for retired people,... Investment: ~20.000 EUR (Senertec) New support scheme enables economic conditions also for small scale applications and units operating for heating supply (up to 4.000 h/year). 11
Visible and tuchable cogeneration Presentation of good practice: o Web page o Case study Handbook Bring cogeneration technology closer to people! Present your case! www.codeproject.eu/category/infotools/best practise examples/ WP6 EU Cogeneration roadmap to 2020 12
Key factors for the future cogeneration development in EU The 2050 scenario is expected to continue to dominate debate in Brussels in the next 6 months: o Radical cuts in CO 2 emissions in Europe: 80 95% o renewable sector is pushing for a 100% future ETS CO 2 costs for CHP: o Since 2013 only benchmark for free alowances for heat (additional free alowances for carbon leakage sector), decrease till 2027 full purchase in 2027. o Carbon leakage small/individual boilers out of ETS Industrial Emissions Directive (recast LCP + IPPC Directives) o NO X emissions limits Recast of the Energy Performance of Buildings Directive (EPBD) o Definition of nearly zero energy buildings KEY ROLE OF THE FUTURE COGENERATION Energy Ef fficiency Renew wable energy ts Eco onomic benefi Climate cha ange 13
Thank you for your attention! 14