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What’s holding back co-generation and efficient district heating and cooling?

IEA case studies reveal opportunities but also impediments for optimised electricity and thermal systems

21 May 2014

A new IEA publication spotlights two underutilised but fully implementable technologies that efficiently integrate heat and electricity systems, provide flexibility and enhance energy security. Linking Heat and Electricity Systems: Co-generation and District Heating and Cooling Solutions for a Clean Energy Future examines what holds back co‑generation and efficient district heating and cooling systems that can help decarbonise the energy system.

Co-generation – also known as combined heat and power (CHP) – provides enhanced energy efficiency compared with conventional thermal generation by recovering some of the heat produced during electricity generation that otherwise would be wasted. Worldwide, co­‑generation plants’ average conversion efficiency rate was 58% in 2011, compared with 36% for conventional thermal power plants.

District heating and cooling (DHC) systems, which distribute thermal energy among end users in a network, can be coupled with efficient generation sources such as CHP or with other locally available energy sources, such as waste heat, renewables or natural cooling from water sources, for further environmental gains. DHC networks based on these sources can be five to ten times more efficient than traditional electricity-driven equipment.

Despite their proven advantages, global deployment of co‑generation and efficient DHC has been limited. A select number of countries use co-generation to meet a significant share of their energy demand, but it has lost ground overall, declining from 14% of global electricity generation in 1990 to around 10% in 2000 and remaining stagnant since then.

Linking Heat and Electricity Systems looks at use of these systems in a variety of countries and applications to analyse existing barriers and opportunities. It delves into three case studies for industrial co-generation in Mexico, Spain and Scotland and three others for efficient DHC in Denmark, France and Saudi Arabia. The analysis addresses not just the technologies’ mechanics but also the flexibility they offer, financing mechanisms, business models and policy frameworks.

The conclusions are clear: co-generation and efficient DHC are ready and able to offer multiple benefits to producers and consumers alike while reducing energy systems’ greenhouse gas emissions. The report provides recommendations to help policy makers better understand these efficient options and to overcome barriers to increased deployment, particularly energy prices that do not incentivise energy efficiency and failure to emphasise local energy sources in infrastructure design.

To download Linking Heat and Electricity Systems, please click here.

 

Homepage photo of pipes for a Danish DHC system by Bill Ebbesen, shared through Wikimedia Commons, http://creativecommons.org/licenses/by/3.0/legalcode

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