UK government consults on incorporation of CHP

Date: 20 February 2014

The changes flow from requirements set out in the 2012 Energy Efficiency Directive (EED) to promote high efficiency CHP, efficient district heating and cooling infrastructure and heating and cooling from waste heat, and must be incorporated into national laws by 5th June, reports Out-Law.com.

It is part of an ongoing transposition of the law into UK policy, which included the consultation on the transposition of Article 8 on energy audits with the Government’s proposal for the Energy Savings Opportunity (ESOS) scheme in July and energy efficiency targets for central government buildings.

With the recent European Commission announcement as to its proposals for a binding target for reducing greenhouse gas emissions by 40% against 1990 levels by 2030, following on from the 20-20-20 package, but without individual member state targets being set the implementation of this directive is even more significant.

The EED imposes various measures on EU member states to reduce their primary energy consumption by 20 per cent of their 2007 business as usual projections by 2020.

These include retrofitting of central government buildings at the rate of 3 per cent annually; the inclusion of energy efficient considerations in public procurement; removal of barriers in the energy market; promotion of efficiency in energy generation; and overcoming market failures that impede efficiency in the supply, transformation, transmission, distribution and consumption of energy.

Defra is now consulting on how best to implement those provisions of the EED which require developers of new or refurbished power generating installations with a total thermal input exceeding 20 MW to consider whether these can be developed as CHP facilities or otherwise use the waste heat.

If these opportunities exist and are cost effective, national authorities will only be able to grant an environmental permit if the facility is developed as a CHP facility or uses waste heat recovery techniques.

“Installations in any of [these] categories which are new after 5 June 2014 will in any case need to apply for an environmental permit,” it said in its consultation. “The permit application process requires the operator to supply a range of information about the installation’s technical characteristics. The EPR amendments proposed in this paper would add to that the supply of a CBA [cost-benefit analysis] [to assess the feasibility of new or refurbished cogeneration installations] in fulfilment of the requirements of [the EED].”

“With the proposed amendments, the regulator would determine from the CBA whether the installation can be permitted only on the basis of incorporating high efficiency cogeneration or district heating and cooling,” it said.

Operators will need to add the new CBA and feasibility requirements into their plans when designing and considering new installations at an early stage,” according to Energy and environmental law expert Linda Fletcher on Out-Law.com.

Article 14 of the EED also requires member states to carry out a comprehensive country-wide CBA of the potential for the national application of high efficiency cogeneration and efficient district heating, and to provide this to the European Commission by the end of 2015. They must also take “adequate measures” for cogeneration and district heating infrastructure to be developed if the CBA indicates that the benefits outweigh the costs.

Source: COSPP