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Combined heat and power (CHP) is showing growing potential as a major energy option. It is cheap, it helps cut carbon emissions and it has other environmental benefits.
Graham Meeks, director of the Combined Heat and Power Association (CHPA), says that over the last 10 years CHP has played an important role in the UK’s pattern of energy supply, delivering secure and reliable low-carbon energy to businesses, homes and the public sector. Today it meets 7% of UK electricity demand, and in 2009 it saved nine million tonnes of carbon dioxide.
But Meeks feels that when it comes to CHP, greater strides could have been made.
“We have seen some important developments – helping hospitals, universities, supermarkets and businesses to manage their energy costs and carbon footprint. But there is no question that the industry could have achieved much more.”
The previous government’s combined heat and power targets, which were set a decade ago, have still not been met. They aimed to reach 10GW of CHP capacity by this year but, at 5.5GW, today’s figure is only just over the halfway mark.
The CHPA is not happy with those figures. But the association accepts that the targets were very ambitious to start with and created a hostile environment for the sector that resulted in slow growth and missed opportunities.
The CHPA accuses the previous government of neglecting the sector and failing to put the right framework in place to reflect CHP’s true value and encourage uptake. The disconnect between the CHPA and the government goes back a long way. “Ten years ago the government introduced a package of energy market reforms that pulled the rug out from underneath this industry, creating a market environment that was fundamentally hostile to decentralised CHP generation,” says Meeks.
The association told the Labour government that the target would not be met because many CHP projects would not be built. It claimed that a third of CHP projects given the go-ahead would be ditched because of falling wholesale electricity prices and rising gas costs, meaning it would cost more to produce CHP for less return.
There is now more confidence in the sector about the coalition government’s intentions. “In contrast to many elements of the government’s ambitions for low-carbon energy supply, we can expect to see measurable progress within this term of office,” says Meeks. The association says new targets are more sensible than those set 10 years ago, although even if those targets are met they will not be enough
for the UK to play catch-up with other countries such as Denmark, Sweden and America.
“The latest government estimates suggest there is potential to see CHP capacity expand to about 13GW, around double the capacity we have today. This would still leave us far behind our industrial competitors – Germany has a target for 25% of electricity from CHP by 2020 and has legislation to deliver it – but it is a sensible and achievable goal for the coalition.”
So what now? Where can Britain’s CHP industry go from here and just what will the next 10 years bring to the sector? Will the public start to see and hear about the benefits of the industry, will more projects be given the green light and, most importantly, will the 2000 targets ever be met and when?
The CHPA hopes so and believes the government needs to focus on a better public understanding of the benefits of CHP so that it stands out as a good energy option. There is a real opportunity to revitalise CHP as part of a more competitive, low-carbon energy market,” Meeks says.