Give and take

Why is the government treating CHP as the poor relation in the energy efficiency family? Why has it just reneged on a promise of £10m for community energy systems when, for a growing number of buildings, CHP is the best thing since sliced bread (see news BSJ 06/06)? With recent changes in energy prices it is becoming increasingly cost effective, but some community energy systems still need support.

In the right buildings, with good heat loads, CHP is the single biggest hit you can make on CO² emissions and running costs. In individual buildings like hospitals and hotels, it can reduce costs and carbon emissions by up to 30%. That's why some of the large fitness centre and hotel chains have already gone for it in a big way.

CHP really comes into its own when you supply a lot of buildings with different heat demands. These community heating systems often supply a mix of residential and commercial buildings with private wire systems to supply the electricity. Trigeneration is also becoming an option to provide cooling to meet the growing need for air-conditioning. CHP can now be viable in highly air-conditioned offices and data centres - previously seen as non-options for this technology. In fact, DEFRA has a trigenration system in its London HQ whilst giving CHP the cold shoulder in terms of policy.

Abrupt withdrawal of funds

CHP had a rough time between 2000-2004 with unfavourable energy prices. Although sell-back tariffs are still unfavourable, recent price rises mean the spark gap between electricity and gas prices is widening, making CHP an increasingly cost-effective option. But the infrastructure required for integrated community heating systems still needs additional support to get over that initial hump of installing large distribution systems.

DEFRA has a trigeneration system in its London HQ whilst giving CHP the cold shoulder in terms of policy

In December 2004, DEFRA announced an extra £10m to extend the community energy programme that has been supporting the installation of community energy systems. However, the recently published UK Climate Change Programme withdrew that same £10m and increased spending on renewables - without warning, discussion, or consultation.

Yet there are schemes lining up to be implemented. DEFRA appears to have placed a very fixed but arbitrary deadline of March 2007 on these relatively large projects. I'd like to see them get power stations up and running in the same timescale. They argue that schemes didn't go ahead soon enough and also argue lack of viability. The scheme has already helped 18,000 people on low incomes and saved 19,000 tonnes of carbon per year for around £50m. I'd like to see them achieve that with renewables for the same investment. Withdrawing the grant is like asking the national electricity grid to start again from scratch without any government subsidy.

Now I'm a great believer in renewables, but it seems perverse to see funding rising for renewables yet CHP projects starved of support. Simple paybacks of five-to-10 years for CHP will always beat renewables. It is vital that we integrate more local energy systems into the community. We can avoid the inefficiencies of centralised generation and the electricity distribution system. Many city centres, housing estates and universities are keen, but need that grant contribution just to tip the balance.

The DEFRA CHP strategy doesn't help either. It sets a target of 10 GWe of CHP for 2010 and then says it won't meet it. The UKCCP confirms this and appears to leave CHP entirely to market forces. It's the only government strategy I know that says it won't meet its own target. What has government done to address the shortfall - withdraw the CEP2 grant scheme! Part L and planning regulations are driving us towards more low and zero carbon solutions including CHP but you can't expect heat grids to grow for nothing.

Surely industry and government could have come to an agreement to manage the projects better and make the scheme even more cost effective. What we need is more joined-up government to give us more joined-up CHP!