Distributed Generation: Development of EU Policy
The Dutch energy research body ECN has issued the report "Distributed Generation: Development of EU Policy", which is based on the international research project Decent. COGEN Europe was a partner of the project team. The study identified the main barriers and success factors to the implementation of decentralised generation projects within the EU and makes a number of recommendations to enhance their feasibility within the internal energy market. Download the report...

Emissions Trading: Council achieved Agreeement, but Cogeneration still at Risk
Yesterday, the Council of Environment Ministers unanimously agreed a common position on the Commission's proposal to introduce a greenhouse gas emissions trading system in the EU. Key points of the agreement are:
Opt-out: Individual installations or activities can be exempted from emissions trading in the pilot peruid 2005-2007, subject to approval by the Commission on strict conditions (e.g. fulfilling the same emission reduction as installations participating in the scheme).
Opt-in: Member States can unilaterally include additional sectors and gases from 2008, subject to approval by the Commission.
Pooling: The agreement also provides for the possibility for companies to pool their emission allocations on a voluntay basis until 2012.
Allocation of emission rights: Allocations of emission permits will be free of charge, but Member States can auction up to 10% of allowances from 2008. The Commission retains the right of veto over national emission allowance allocation plans. It will develop allocation criteria to guide Member States by next December.
Penalties: the penalty rate foreseen for the period from 2005-2007 has been slightly reduced from 50€ per tonne of C02 equivalent emitted in excess of the allowance to 40€. It will be 100€ thereafter.

As highlighted in a recent COGEN Europe Position Paper, the proposed Emissions Trading Scheme paradoxically threatens to become one of the biggest obstacles to the installation of new larger cogeneration capacity, despite the massive CO2 savings that this measure would achieve. Environment Ministers have failed to include complementary mechanisms into the design of the Scheme that would avoid such a scenario. It is therefore now up to the European Parliament, in its second reading, to ensure that the Scheme will encourage cogeneration instead of penalising it.

New COGEN Europe Members: Cargill and Elbar
COGEN Europe welcomes two new Members, Cargill b.v. (Western European Sweeteners) and Elbar b.v. (Sulzer Turbomachinery Services), which will join our association from 1 January 2003 through the Dutch cogeneration association Cogen Nederland. Cargill Sweeteners is part of Cargill Inc. and supplies a variety of nutritive sweeteners used in beverages, baked goods, candies, cereals, prepared foods and more. Elbar's Sulzer Turbomachinery Services include Hickham, Elbar and Sulzer Repco. They offer comprehensive repair, remanufacturing and maintenance services on general rotating and reciprocating equipment worldwide.

Final Summary Report of the Micromap Project available
The Micromap project produced a study and development plan for mini and micro-cogeneration, thus providing a reference framework for European and national policy makers to stimulate the growth of these environmentally, economically and socially beneficial technologies. The final summary report of the Micromap project is now available (pdf, 191 Kb).

Other important Decisions of this week's Council of Energy Ministers
EU energy ministers agreed on Monday 25 November 2002 the full liberalisation of electricity and natural gas markets and splitting of transmission and distribution system operators from energy producers, both by July 2007 at the latest. Both moves should reduce possibilities of discrimination against new producers, including cogenerators, and increase access to the electricity grid. However, the final compromise over electricity labelling fails to satisfy demands by several countries for all suppliers to communicate environmental impacts as well as sources of their power. The European Parliament originally wanted this "duty of disclosure" to include cogeneration. For more information read the press release...
Ministers als agreed on a €190m budget for the funding programme "Intelligent Energy for Europe". This opens the battle with the European Parliament which wants to increase the budget from €215m as proposed by the European Commission to €255m.

EU Directive on Energy Tax once more delayed
Finance ministers have deferred yet again finalisation of a long-awaited deal on the proposed European Directive on taxation of energy products. The item was on the agenda of a Council meeting in Brussels two days ago. Yet, too many outstanding differences remained on three key issues: taxation of diesel, the treatment of energy-intensive industries, and the fate of existing exemptions from national energy taxes. Agreement may be reached at the next Council meeting on 3 December. The Directive is also expected to contain provisions on tax breaks for highly efficient cogeneration.

New EU regulation on non-road engine emissions
EU-wide controls on air pollution from off-road petrol machines will soon take effect under a Directive agreed by EU Environment Ministers last week. Approval by the European Parliament will be only a formality. The Directive, proposed in 2000, expands the EU's 1998 non-road mobile machinery directive from diesel engines to also cover petrol-engined equipment, including gensets. An initial set of emission limits will take effect 18 months after entry into force, probably in autumn 2004. A second round of tighter limits will be introduced between 2004 and 2010 depending on engine type. Stage two controls are expected to apply earlier to four-stroke engines and later to two-stroke engines. The latest deadlines will apply to the technically most difficult category, two-stroke engines with large cylinders.
The European Commission is also preparing to propose a second revision of the non-road mobile machinery Directive tightening existing emission limits for diesel machines. It will possibly tighten existing emission controls and recommend feasibility studies for particle filters and nitrogen oxide (NOx) absorption some time after 2010. These requirements could start around 2006. An immediate requirement for particle filters seems not to be included.
For more information read the original proposal of the Directive (pdf), its legislative history, and the EU Council of Ministers minutes (pdf).

Natural Disasters in 2002 set to cost over $70 Billion
Experts from the reinsurance company Munich Re presented a worrying report at the 8th UNFCCC Climate Change meeting in New Delhi, India: Record-breaking rains, triggering devastating floods in Europe, destruction of homes across the Caribbean and life-threatening mudslides in India, Nepal and Bangladesh, have been a key feature of 2002. Natural catastrophes, the vast majority of which have been weather-related, have cost countries and communities an estimated $56 billion during the period January to September 2002, a preliminary study shows. The final bill for this year's natural disasters could thus be over $70 billion. Insured losses have so far cost the industry $9 billion with insured losses in Europe the highest at over $6 billion. Klaus Toepfer, UNEP's Executive Director, said: "Climate change, linked with human-made emissions, is already under way (...) The industrialized nations must do all they can to reduce their emissions of greenhouse gases". Read the full UNEP news release...

Towards a coherent Definition of Cogeneration and its Efficiency Gains
COGEN Europe releases today its latest Position Paper "Towards a EU-wide coherent approach to determining primary energy/greenhouse gas savings from CHP". The paper makes a compelling case for the creation of a EU-wide harmonised approach to determining the efficiency of cogeneration compared to the separate production of heat and power. This approach could be applied under various European Directives currently under preparation, thereby creating a more coherent framework for a more energy-efficient Europe. COGEN Europe therefore favours the preparation of a clearly defined and plausible methodology in the European Directive on Cogeneration, and suggests practical steps on how to make this approach relevant for other legal provisions. Download the Position Paper (pdf, 32 Kb)...

Emissions Trading: European Parliament strengthens Cogeneration
The European Parliament's first reading of the proposed European Directive on greenhouse gas emissions trading led to the adoption of a legislative resolution with 74 amendments to the text proposed by the Comission. Parliament requests that carbon savings from CHP should be taken into account when allocating emissions allowances to operators. This should be done on the basis of a "European Guidance on the Carbon Equivalence" which the Commission would have to prepare before the emissions trading scheme starts (Amendments 6 and 18).

Energy Performance of Buildings Directive close to Adoption
In its second reading of the energy performance of buildings Directive, the European Parliament adopted on 10 October a legislative resolution approving a Council common position, together with a number of amendments. The Council had already signalled its agreement with Parliament's proposals in the Committee stage. The compromise reached between the two institutions will avoid a conciliation procedure and thus allow for a swift adoption of the Directive. The agreement covers the three-year deadline for the transposition of the Directive, which can now be extended by a further three years for building certification, the control of heating systems and air conditioning systems where a Member State lacks qualified and or accredited experts in these fields. The Directive is likely to support micro-cogeneration in buildings through mandatory feasibility studies, and by recognising the energy savings from cogeneration when calculating the energy performance of buildings.

Development of cogeneration in France still blocked
The offical contrat d'achat, establishing conditions and prices for purchase of electricity exports from cogeneration installations, is still under development in France. Debates on the latest proposals have not yet lead to any agreement. The results for cogeneration in France during the first 6 months are depressing: Only 13 projects with a total of 25 MW electrical capacity have been registered during this period, continuing the depression after legislation introduced in February 2000 repealed the existing legal framework without providing operational provisions for a new contrat d'achat. This regulatory gap has since then crippled the development of cogeneration in France. The establishment of new purchase tariffs by Decree of 31 July 2001 did not much to relieve the problem, because the lack of a final contrat d'achat continues to frustrate new projects (more information in Energie Plus n° 291 from 15 September 2002).

EU's 6th Environmental Action Programme published
The Action Programme was published yesterday in the Community's official journal. Effective for ten years from 22 July this year, the programme sets out the EU's strategic approach to environmental protection and is to be followed by a series of thematic strategies for priority problems, including concrete objectives and timetables. "Climate change" and "natural resources" figure amongst its key priorities. The climate change strategy set out in the programme makes cogeneration a priority action and confirms the Community's target of "doubling the overall share of Combined Heat and Power in the Community as a whole to 18% of the total gross electricity generation". Download the Programme in all official Community languages...

China and Russia announce Ratification of the Kyoto Protocol
Little sensation at the UN summit in Johannesburg: China has announced its decision to ratify the Kyoto Protocol of the UN Framework Convention on Climate Change. Russia also has declared that it is preparing for ratification. This would meet the conditions for the Protocol to come into force. It also will increase international pressure on the United States - which produce 36% of global CO2 emissions but refuse to join the Protocol - to life up to their responsibilities. Under the Kyoto Protocol, the EU is bound to reduce greenhouse gas emissions by 8% from 1990 levels by 2008-2012. A boost in the use of cogeneration is one of the most important and urgent measures to achieve this goal, because latest data show that CO2 emissions in the EU are on the rise again (see notice from 23 August 2002)

EU Directive on Energy Performance of Buildings: Deadline not yet settled
Contrary to earlier information, the European Parliament and the Council have not yet agreed an implementation deadline for a new EU directive to improve energy performance of buildings. The second reading of the draft legislation in Parliament began two days ago. Under the Directive, building owners would have to produce an energy certificate whenever they wanted to sell or rent their properties. The unsolved issues concern the timetable for this measure: Council and Parliament have agreed that certificates must be updated every ten years, against five years proposed by the European Commission. Also, whilst the Commission wanted the certificates introduced by the end of 2003, Member States prefer a seven years delay, and Parliament five years. The Directive is expected to promote micro-cogeneration in buildings, the energy savings of which will have to be taken into account when determining the energy performance if buildings. Also, feasibility studies for micro-cogeneration in new larger buidlings will be required. Text of the proposed Directive; Draft recommendation for second parliamentary reading, Council of Minister's Common Position

Siemens Power Generation and Aylesford Newsprint join COGEN Europe
COGEN Europe welcomes two new members: Siemens Power Generation, Germany, is a global supplier of power generation equipment, including cogeneration, with net sales of € 8,563 million and nearly 26,500 employees. Aylesford Newsprint Ltd, UK, is a producer of high quality newsprint for newspapers. They operate two gas-fired cogeneration plants with a total electrical capacity of 98 MW to meet the papermill's steam and energy needs.

First Announcement of COGEN Europe's Annual Conference 2003
We are pleased to be able to announce the dates and provisional programme for COGEN Europe's Annual Conference 2003 "Cogeneration - the Path to Growth". With the European Cogeneration Directive under political discussion, now is a very important time for Cogeneration. Attending this conference and exhibition will give you further insights as to what is happening in the cogeneration arena. A provisional programme and a form to register your interest and automatically receive more information are available on the Annual Conference 2003 Webpage.

COGEN Europe Press Release: European Cogeneration in Decline?
A report on "Energy and Environment in the European Union" released by the European Environment Agency in late May 2002 welcomes the growth of cogeneration between 1994 and 1998 but raises concern about preliminary information for 2001, which suggests that the cogeneration share of production has declined since 1998. Most severe indications were noted in Germany, the Netherlands and the UK. For further information read the COGEN Europe press release (pdf, 17 Kb) and download the full report.

Proposal for a European Directive on Cogeneration released!
The European Commission has finally released the long-awaited proposal for a Directive on Cogeneration. The proposal is meant to provide a European framework for the promotion of cogeneration as a means to realise several EU energy policy objectives, notably concerning the prevention of climate change. As a first reaction, COGEN Europe and Euroheat & Power issued jointly a press release on the publication of the proposal.

	Text of the proposed Directive in English - in French (~ 220 Kb)
	Press Release from the European Commission "Commission proposes co-generation Directive to save energy and combat climate change"
	Press Release from COGEN Europe and Euroheat & Power "Cogeneration Directive: long awaited, but disappointing in many respects" (14 Kb)

A special page on the Cogeneration Directive has been created on this website for COGEN Europe Members (password required). A synthesis memo note and a short slide presentation on the proposed Directive are available on the Commission's webpage.

New Eurelectric Study on Quality CHP
Europe's union of the electricity industry Eurelectric has released a new report entiteld "European Combined Heat & Power: A Technical Analysis of Possible Definition of the Concept of Quality CHP". The study suggests an approach to defining what it terms "quality CHP" and what the European Commission will be calling "high-efficiency cogeneration" in its forthcoming proposal on a European Directive on cogeneration. Amongts other issues, the report states that almost 30% of electricity produced in cogeneration plants in Europe in 1997 should not qualify for promotion under the European Directive. The full study and a press release are available on the Eurelectric webpage.
COGEN Europe will co-ordinate a follow-up to this report on the approach of the electricity industry to the issue of quality CHP. We would therefore appreciate to receive any reactions, both from COGEN Europe Members and others, to the Eurelectric study. Please forward your comments to Simon Minett, T: +32 2 772 82 90, F: +32 2 772 50 44, E-mail: simon.minett@cogen.org

UK's new Electricity Market: More CO2 Emissions and less Cogeneration
(Reuters) Britain's power stations are puffing out more CO2 after last year's launch of new electricity trading rules. The country produced 1.5 percent more CO2 in 2001 compared to 2000, with nearly 30 percent from the power sector. Analysts say the design of the new electricity market NETA encourages generators to use their power stations less efficiently, causing a jump in CO2 emissions equivalent to all the pollution savings from Britain's wind farms. A government report showed investment in energy efficient cogeneration plants has collapsed, partly as a result of the new market which penalises small generators which cannot guarantee their output. As a result, utilities are keeping more gas and coal-fired plants running at under full capacity so they can ramp up output suddenly and avoid hefty charges if they are out of balance. Also, generators admit they are keeping extra plant running to avoid buying power in NETA's central balancing market where prices can be over five times the open market price. In turn, companies built just 38 megawatts (MW) of new cogeneration capacity in 2001, compared with 844 MW installed in 2000 and a government goal of 600 MW each year. This is bad news for the British government, which faces a battle to meet its target of reducing greenhouse gas emissions causing global warming.

Energy Globe Award 2003 - submit your Project now!
More than 1300 projects from 98 countries were submitted for this year's Energy Globe Award, organised by the O.Oe. Energiesparverband. Former USSR President Mikhail Gorbachev handed over one of the "Energy Oscars" in a spectacular TV gala which was attended by 1600 guests and televised in 130 countries. The Energy Globe Award 2003 will again honour the most outstanding projects in the fields of energy efficiency and renewable energy sources with € 10,000 per category. Winning projects will also be presented at the World Sustainable Energy Day on 5-7 March 2003 in Wels, Austria. Deadline for submissions to the Energy Globe Award 2003 is 9 October 2002. For more information check the Energy Globe website or contact Margit Nagelstrasser, T: +43 732 7720 14386, E-mail: energy.globe@esv.or.at

Reducing Environmental Impacts of the EU's Energy Sector: Progress too slow
The European Environment Agency's first report on energy and the environment in the EU, published in late May 2002 highlights insufficient progress in reducing environmental impacts, notably climate change. Apart from significant increase of energy consumption in the transport sector, energy efficiency is improving only slowly and renewable energies need to expand at a much quicker rate than to date. Preliminary information suggests that CHP's share of electricity declined between 1998 and 2001. For more information read the press release or download the full report.

DECENT and CHP STAGAS Final Workshop in Brussels
The research projects DECENT and CHP STAGAS have investigated the prospects of cogeneration and decentralised generation in Europe. You are invited to attend a joint final workshop in Brussels on 9 July 2002 from 14:00-17:30, where the project results will be presented and conclusions form the two projects can be discussed. Please download the workshop invitation, programme and registration form (pdf, 19 Kb).

European Union ratifies the Kyoto Protocol
The European Union has ratified the Kyoto Protocol on 31 May 2002. The Protocol will come into force when 55 Parties to the Convention ratify (or approve, accept, or accede to) it, including Annex I Parties accounting for 55% of that group’s carbon dioxide emissions in 1990. To date, 70 countries have ratified the protocol, with the Annex I parties accounting for 27% of emissions. These issues are explained on the UNFCCC webpage, which also highlighs the need for ratification of Japan and the Russian Federation to bring the Kyoto Protocol close to its entry into force.
Under the Kyoto Protocol, the EU is bound to reduce greenhouse gas emissions by 8% from 1990 levels by 2008-2012. Member States' specific greenhouse gas reduction targets were agreed in legally binding form in March 2002 on the basis of the so-called "Burden Sharing Agreement". A boost in the use of cogeneration is one of the most important and urgent measures to help the EU meet its 2008-12 obligation under the Kyoto Protocol.

German Green Energy rules are not State Aid
The European Commission has agreed that the German laws on the promotion of electricity from renewable energy sources and from cogeneration do not constitute State aid. The two laws - the "Erneuerbare-Energien-Gesetz (EEG)", in force since April 2000, and the "Kraft-Wärme-Kopplungsgesetz (KWKG), from May 2000 - oblige operators to connect "green" power generation installations to the electricity grid, to purchase as a priority green electricity and to pay a minimum price for green electricity which is above the market price for electricity. The KWKG has been replaced in the meantime by the new German CHP Law in force since April 2002.
The Commission had received several complaints alleging that the green power producers were being unfairly subsidised.Yet, it said today both laws "clearly give an economic advantage" to green energy producers, but they "cannot be considered to involve any state subsidies". Rather, they "treat public and private companies in exactly the same way". Moreover, there is "no indication that state resources are transferred via the public companies to the beneficiaries".
Press release...

COGEN Europe at Power Gen 2002
COGEN Europe will participate at Power Gen 2002, the 10th annual conference and exhibition dedicated to the pan-European power generation industry, to present itself and to meet business partners and colleagues from around the world. Power Gen will occur in Milan, Italy, from 11-13 June 2002. You can find COGEN Europe's stand in 14/F09. Please feel free to pop by!

CO2 Emissions - slight Reversal in EU Progress towards achieving the Kyoto Target
Total CO2 emissions from the 15 EU Member States were 0.5% lower in 2000 than 10 years earlier, the latest emissions inventory from the European Environment Agency (EEA) shows. The EU therefore has delivered on its commitment to stabilise CO2 emissions at their 1990 level by 2000. Yet, emissions rose between 1999 and 2000 by 0.5%, mainly due to a 2.4% increase in emissions from electricity and heat production in the UK. Greece, Spain, Ireland, Italy and Belgium also emitted more greenhouse gases - CO2 emissions account for 80% of them - than in previous years. Spain's performance is worst. Its emissions in 2000 stood 33.7% higher than a decade earlier, more than double the 15% increase it is allowed under the EU burden sharing agreement between 1990 and 2008-2012. Germany, the largest EU emitter, has achieved the greatest emissions cut among the big Member States, recording a 19.1% decrease over the decade. For further information read the press release.
The data release in the EEA inventory underline once more the importance of the wider use of cogeneration in Europe. Being up to 40% more efficient compared to separate heat and thermal power production cogeneration is one of the most effective means to reduce CO2 emissions.

Cogeneration