Combined Heat and Power
37.The contribution of combined heat and power (CHP)
was the subject of a good deal of the evidence we took on energy
supply issues. The Government declares in the consultation document
that "we are committed to promoting combined heat and power
as an efficient generating technology" and are relying on
CHP to reduce emissions. Although many witnesses were in favour
of its role in the climate change strategy, some suggested that
the Government was being over-optimistic in its projection of
the emissions reductions which would result. In particular, the
need to match the heat and power demands was seen as limiting
the advantages of this technology.[77]
The Combined Heat and Power Association countered this argument,
noting that a wide range of heat:power ratios could now be designed
for.[78] Some witnesses
suggested that the emissions advantage of CHP over and above gas-fired
power stations was relatively small and the Government put the
savings at around 10%.[79]
On a purely practical note, it is also recognised that some of
the first CHP plants built in the UK suffered from technical problems
and did not deliver the projected benefits.[80]
Although there are clearly some doubts about CHP, we are confident
that an expansion of its use will bring substantial emissions
reductions. As such, we are keen that ambitious targets and incentives
to promote its use are established.
38.The former Government target for CHP was to reach
5000 megawatts (MW) of installed combined heat and power capacity
by the year 2000. Existing capacity amounts to around 3700 MW
and the Combined Heat and Power Association (CHPA) noted that
new capacity in 1997 amounted to just 170 MW and that there continued
to be a number of barriers to the development of CHP: uncertainty
in the market, price relativities and some technical and cultural
barriers with the Regional Electricity Companies (RECs). The Combined
Heat and Power Association noted that a clear strategy to encourage
CHP was absent from the consultation document.[81]
In addition to the year 2000 target, more ambitious long-term
targets were suggested to us. Indeed, the Labour Party policy
document In Trust for Tomorrow suggested a target of 10,000
MW by 2010 and the Energy Technology Support Unit found that a
CHP capacity of between 10,000 MW and 17,000 MW was cost-effective
and realistic.[82] A
further 2000 MW of community heating was identified by the Building
Research Establishment Energy Conservation Support Unit (BRECSU).
We are concerned that policies to ensure the development of combined
heat and power are not yet implemented. However, we do welcome
the Government's commitment to a target of 10,000 MW capacity
by 2010. Given the lead time and the length of investment cycles
involved, we urge that the Government work to remove the remaining
barriers to CHP as quickly as possible.
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