UK likely to miss its CHP targets
A new combined heat and power (CHP) plant in Antwerp shows how far the UK has slipped behind its European neighbours in attempts to reduce the carbon footprint of our energy generation.
The 125 MWe plant, which produces both electricity and useful heat or steam used for industrial processes, will reduce Belgium's carbon dioxide emissions by approximately 200,000 tonnes per year, the equivalent of removing about 90,000 cars from Europe’s roads, according to the CHP Association.
"It really is Belgium one, UK nil when it comes to cutting the carbon footprint of industry," says Graham Meeks, director of the CHPA. "Whereas other European countries, such as Belgium and Germany, are offering significantly investment incentives for CHP, the UK is languishing in the doldrums."
In late 2007, the CHPA commissioned analysis which demonstrated that the Belgian region of Flanders offered probably the most attractive investment regime for CHP in the EU. In contrast, the last new UK cogeneration plant of this scale came on-line in 2004 and since then there has been relatively little interest in building new industrial CHP.
The Association added that without significant changes to the funding regime, the UK government "has little hope" of meeting its target of achieving 10,000 megawatts of installed cogeneration capacity by 2010.
"Sadly, there is little appetite for building new plant at the moment because of the uncertainty concerning the future of current support mechanisms, most notably the Climate Change Levy exemption, which expires in 2013," says Mr Meeks.
Current installed CHP capacity in the UK is 5.47 GWe.
Power exported from a qualifying CHP plant is exempt from the Climate Change Levy, but this benefit is subject to European Commission State Aid approval, which expires in March 2013. The CHPA says this uncertainty about the future of this funding is a major barrier to the development to CHP plant. Similarly, the benefit of Enhanced Capital Allowances is not currently available to Utilities, owing to State Aid constraints and the CHPA considers this to be discriminatory against CHP.
The CHPA is therefore pressing Government to: Continue the outputs exemption from Climate Change Levy (CCL) as extended to all supplies of GQCHP electricity until, at least, 2037 (i.e. consistent with the time frame of the Renewable Obligation) and ensure the universal applicability of Enhanced Capital Allowances to all CHP plant.