The EC has proposed a new directive aimed at saving energy, reducing external energy dependence and helping to meet its Kyoto commitments by compelling member states to encourage the cogeneration of heat and power. It is based on the belief that new cogeneration plants save 10 or more per cent of the fuel otherwise used for separate production of heat and electricity and complements the EU’s Renewables directive and recent proposals on energy efficiency in buildings and biofuels. The European Union has committed itself to reducing its greenhouse gas emissions by 8 per cent by 2008-2012 compared to levels in 1990.

Cogeneration represented 11 per cent of the Union’s total electricity production in 1998, leading to energy savings comparable to the annual gross energy consumption of Austria or Greece.

The potential energy savings therefore are huge. If, for example, the cogeneration share in electricity production increased to 18 per cent of total electricity supply, energy savings in the range of 3-4 per cent of the Union’s total gross inland energy consumption could be achieved, with reductions in CO2 emissions of 65 million tonnes per year, which would go a considerable way towards meeting the Union’s Kyoto commitment.

The Directive would encourage member states to promote cogeneration, through a systematic identification and progressive realisation of the national potential, by obliging them to report on the progress achieved towards meeting this potential and on the measures undertaken.

To remove current barriers, member states would also be required to guarantee that electricity from cogeneration would be transmitted and distributed on the basis of objective, transparent and non-discriminatory criteria, facilitate access to the grid for electricity produced from cogeneration units using renewable energy sources and from units with a capacity less than 1 MWe, and ensure that guarantees of origin of electricity from cogeneration could be issued on request by one or more competent bodies.

To remove ambiguities and ensure transparency and coherence a common definition of cogeneration and a flexible methodology to identify high efficiency cogeneration would be established by the EU.

The proposed Directive will be forwarded to the EU’s Council of Ministers and the European Parliament for adoption under the co-decision procedure.