UK to Gain a Tenth of Its Electricity from CHP (22-Oct-07)
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Full story: UK to Gain a Tenth of Its Electricity from CHP (22-Oct-07)
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Government reports predict increased adoption of highly efficient technology, but CHP industry body argues more incentives are needed to stimulate business adoption
James Murray, BusinessGreen, 22 Oct 2007
Up to a tenth of the UK's electricity supply could come from combined heat and power (CHP) energy generation by 2010, according to two new Defra reports released late last week.
The reports into the UK's potential for CHP and the progress made in installing CHP capacity concluded that the technology – which increases the efficiency of energy generation by capturing waste heat and reusing waste heat – has the potential to deliver significant economic and environmental benefits.
The government claims that 27Twh of electricity and 51Twh of heat were generated in the UK in 2005 using CHP plants and that 36Twh of the 350Twh of electricity supply could come from CHP technologies both in fossil fuel-burning power plants and micro-installations by 2010. It also predicts that up to 17 per cent of the UK's electricity needs could ultimately be met by CHP, delivering significant carbon savings and energy efficiency gains.
The reports outlined the measures in place to stimulate wider adoption of CHP, noting that energy generated using CHP was exempt from the Climate Change Levy; that firms investing in CHP technology were eligible to for incentives under the Enhanced Capital Allowances scheme; that CHP plant was exempt from Business Rates re-evaluations; that biomass- and waste-fuelled CHP were eligible for incentives under the Renewables Obligation scheme; and that carbon saved through CHP installations would be rewarded under the European Emissions Trading Scheme from next year.
However, the UK's CHP Association (CHPA) trade group claimed that these incentives were not having the desired effect and adoption of CHP technologies in the UK was lagging behind that of Germany.
"It is certainly encouraging that the government recognises that CHP can deliver substantial carbon savings at very little cost," said CHPA director Graham Meeks. "But the reality is that in the absence of effective incentives to recover waste heat and build CHP plants, our leading power companies are lining up to build a new generation of less efficient, power-only plant".
He added that in Germany the government had set a more ambitious target of generating a quarter of electricity from CHP and was set to achieve attain major carbon savings as a result.
"We now have the evidence that new CHP plant can deliver cost-effective carbon savings of between four and six million tonnes by 2010, and up to eight million tonnes by 2015 – equivalent to taking eight million cars off the road," he argued. "The energy industry is now looking to the government to provide the leadership and introduce effective incentives for investment to fulfil this potential."
- Source: Accountancy Age
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