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EU Energy Policy:
- Cogeneration Directive

Updated: July 2012

13 June 2012. The Energy Efficiency Directive was agreed between the European Parlament, Comission and Council repealing the Cogeneration Directive. Find out more information about the EED here.

19 December 2011. New Decision 2011/877/EU establishing harmonised efficiency reference values for separate production of electricity and heat in application of the Directive 2004/8/EC about cogeneration.

22 June 2011. The European Commission launches a proposal for the Energy Efficiency Directive with a new energy efficiency strategy in line with its Energy Efficiency Plan 2011, promoting the electricity produced from renewable sources in the EU electricity market. This proposal repeals the Directives 2004/8/EC and 2006/32/EC.
It outlines the methodology for determining CHP including some guidelines for high efficiency co-generation, and energy savings.
Each Member State must submit a progress report on the aspects covered by the Directive in April 2013, and thereafter every three years, and in November of each year must submit statistics on national electricity and heat production, as well as statistics on primary energy saved with co-generation.

Amending act of the Directive 2004/8: Regulation (EC) No 219/2009 (see part 7.6 about cogeneration) adapting a number of instruments subject to the procedure referred to in Article 251 of the Treaty to Council Decision 1999/468/EC with regard to the regulatory procedure with scrutiny.

Amendments and corrections to Directive 2004/8/EC have been incorporated into the basic text. This consolidated version has been made just for information.

November 13, 2008, the EU Commission launched two papers to promote cogeneration as part of the Energy Security and Efficiency Package & Second Strategic Energy Review.

The documents are:
- Communication "Europe can save more energy by combined heat and power generation" COM(2008)771. While cogeneration is increasing in the EU, the increase is slower than expected due to several barriers, including inadequate grid access and interconnection. For the increase of cogeneration the Commission asks the countries to remove barriers. It also proposes a common framework of grid access rules should be of help to all stakeholders.

- Decision on detailed guidelines for electricity calculation in combined heat and power C(2008)7294. This guideline should finally close the discussions on how to calculate the production of electricity from cogeneration, a central concept in the cogeneration directive.

Read the EC documents here.

Cogeneration Directive
The Directive was approved on February 11, 2004 as Cogeneration Directive 2004/8/EC and implemented until 2006.

Index of this Page
· INFORSE Recommendation Read
· Content of Cogeneration Directive 2004/8/EC, Read
· Next Steps: EC Communications and Parliamentarian Initiative (2006-2008) Read

INFORSE Recommendation
The increase in cogeneration is an important element in increased energy efficiency. Thus, it is important that the Directive is implemented in a way, where it supports substantial capacity expansion of cogeneration and that it does it in a way that maximizes efficiency and emission reductions. It is proposed that:

- The national implementation includes an open and participatory analysis of the national potential for high-efficiency cogeneration

- The countries use the implementation of the Directive to establish stable conditions for investments in cogeneration that support an increase of cogeneration up to the full potential of high-efficiency cogeneration.

- The countries set national targets for expansion of cogeneration, and include these targets in their climate and energy strategies.

- Micro Combined Heat & Power stations (building-integrated CHP) should be evaluated as an efficiency measure for buildings on the same term as measures covered by the new Energy Performance of Buildings Directive.

- Renewable energy based CHP (RE-CHP) should not be imposed efficiency limits, i.e. must not necessarily be high-efficiency cogeneration.

- Taxes of heat from CHP must not be higher than taxes of waste heat from industry or condensing power plants.

Content of the Cogeneration Directive

The Cogeneration Directive (Directive 2004/8/EC on the Promotion of Cogeneration Based on a Useful Heat Demand in the Internal Energy Market) attempts to promote cogeneration through a systematic identification and progressive realisation of the national potential for high efficiency cogeneration by creating a common definition and removing barriers.

To remove current barriers to cogeneration, Member States would need to enact the following:
· Guarantee that electricity from cogeneration would be transmitted and distributed on the basis of objective, transparent and non-discriminatory criteria.
· Ensure that guarantees of origin of electricity from cogeneration could be issued on request by one or more competent body.
· Make analysis of the national potentials for high-efficiency cogeneration.
· Report on progress

The countries can make support schemes for cogeneration, but they do not have to. The support must be based on the useful heat demand. The support must not be used to subsidize heating.

The Directive does not have any national targets for cogeneration and does not require the countries to support cogeneration. It is certainly a soft measure, where the value shall be seen as more focus on the benefits of cogeneration and the opportunities for national organizations to use the directive as a driver for national support for cogeneration. In connection to the Directive, the Commission puts forward a number of arguments for cogeneration, including that cogeneration plants are less vulnerable to terrorism than central power plants because they are smaller and an eventual attack will have less impacts.

It is the hope of the Commission, and of many others, that the Directive will support the use and development of cogeneration in the EU accession-countries, where the widespread use of district heating is a good basis for cogeneration. When the electricity directive is introduced in the accession countries, it is important that this Directive and the renewables directive are implemented as well. This can help to avoid that the market introduction would hamper a sustainable development.

One background for the Directive is the Commission's cogeneration strategy from 1997 with a target of co-generation in total EU electricity production of an increase from 9% in 1994 to 18% by 2010. That strategy has paved the way for the proposed and now approved Directive.
The cogeneration industry associations (Cogen Europe) welcomes the Directive, but finds it weak.

Read about Directive 2004/8/EC at and at (views of the cogeneration industry).

The Directive was proposed by the EU Commission in July 2002.
It was discussed among EU countries in November 2002.

After the first opinion of the EU Parliament, the EU energy ministers agreed on a number of outstanding issues, September 9, 2003 in a common position.
The Parliament has given its second opinion in December 2003, where it has basically agreed to the previous compromises in the ministers common position.
With the agreements of the Parliament, the final adoption of the Directive by the ministers was done on February 11, 2004, and it had been implemented until 2006.


Next Steps: EC Communications and Parliamentarian Initiative (2006-2008)
In a Communication entitled “Action Plan for Energy Efficiency: Realizing the Potential” (19 October 2006), the EU Commission highlighted that in 2006 cogeneration represented only 13% of electricity consumed in the EU. Thus, it proposed amendments to the current Directive on the Promotion of Cogeneration such as accelerating harmonization of the calculation methods for high-efficiency CHP, proposing that Member States be required to identify waste heat potential or adopting a European Norm and a minimum efficiency requirement for micro CHP.
Read the Communication on the European Commission's web site (pdf file 139kB).

With its Energy Package from January 2008, the European Commission announced in a Communication (COM2008/11/Final) that it would issue a Decision on detailed guidelines for the Directive on Cogeneration and a Communication on the implementation of this same Directive in 2008-2009.
Read the Communication on the European Commission Web site

On January 31, 2008, the European Parliament adopted an own initiative report on “An Action Plan for Energy Efficiency, Realizing the Potential”. Among many other requests and statements, the European Parliament asked the Commission to consider the fact that “cogeneration boilers are by far the most efficient, and to set minimum performance requirements for boilers accordingly”. In addition, Members of the European Parliament (MEPs) urge Member States to include cogeneration in their national energy efficiency plans and to promote the use of cogeneration.
Read the full report on the European Parliament's web site

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