Evaluation of the impact of the liberalisation of the European electricity market on the CHP, District heating and cooling sector; 'Save CHP/DHC'. Final report

Improved energy efficiency will play a key role in meeting the EU Kyoto target economically. In addition to a significant positive environmental impact, improved energy efficiency will lead to a more sustainable energy policy and enhanced security of supply. The study: 1) Identifies and evaluates parameters and conditions which in relation to the liberalisation of the electricity market will have an impact on the CHP/DHC sector in EU15 and Poland. 2) Establishes an information base on CHP/DHC systems in EU15 and Poland. 3) Analyses the CHP/DHC sector and its ability to meet changing market conditions. 4) Assesses the effect of the liberalised electricity market on electricity production in relation to CHP/district heating and cooling. 5) Identifies threats for the viability of CHP/DHC in a liberalised market and evaluates means and measures to overcome such threats. The study brings forward the goals and commitments in respect of European energy and environmental policy and gives an overview of the present and expected future framework in which CHP/DHC is to operate. The study evaluates the viability of the sector at an overall level and for different groups/categories of CHP/DHC systems in different countries. The effects of existing or proposed national public measures are analysed. The analyses are essential to decision makers in the transition process towards a fully liberalised market. Recognised uncertainties in the market during the transition period may cause either a temporary or a permanent recession for the CHP/DHC sector. Improved understanding and recognition of threats and opportunities is important to all actors just now. The study can be considered a first step of a process to create a market situation, where the energy customers can make their choices under competition rules and where environmentally friendly and efficient CHP and DHC is considered an attractive business opportunity in competition with other energy supplies. (EHS)