CHP ‘needs financial incentives’

The DEFRA study, Analysis of the UK Potential for Combined Heat and Power, was published on 19 October. CHPA director Graham Meeks said it failed to deliver financial incentives for CHP and without them power companies would invest in cheaper, less efficient technologies.

He said: “It is encouraging that the government recognises CHP can deliver substantial carbon savings at very little cost. But the reality is that in the absence of effective incentives to recover waste heat and build CHP plants, our leading power companies are lining up to build a new generation of less efficient, power only plant.

“Instead of moving to a low carbon future, our energy policies mean that we are in danger of turning back the clock to the days when Britain was seen as the ‘dirty man of Europe’,” Meeks said.

The CHPA contests the report’s prediction that over 10% of the UK’s electricity will come from CHP generation by the end of 2010. According to the association there is uncertainty over the continuation of existing fiscal incentives.

It said these are “at best hard to get hold of and companies are unsure as to how long government will continue to offer exemptions on the climate change levy and business rates for CHP power generation plant and machinery”.

Meeks said the legacy of failing to promote CHP now would be felt for the next 30 years. “While there is over 9000MWe of new power station capacity awaiting planning consents, only 2000MWe of this utilises CHPs and the majority is unlikely to proceed under current incentives,” he said.

“As a nation we should be looking to seize this opportunity. The energy industry is now looking to government to provide the leadership and introduce effective incentives for investment to fulfil this potential.”

The CHPA said elsewhere in Europe governments were more progressive. The German government has outlined investment plans that will see CHP meet 25% of the country’s electricity needs.