Cogeneration offers a very efficient way to produce heat and electricity simultaneously but conditions for significantly increasing its use may not exist in all Member States, says Eurelectric, the European Grouping of the Electricity Supply Industry. Cogeneration is the combined generation of heat and electricity in a single plant, which uses some 80% of the heat often lost during power generation, thus helping reduce carbon dioxide emissions. Eurelectric's position on cogeneration, namely, that it should be given "the appropriate weight within a coherent (EU) energy policy", is a response to a request for industry input from the European Commission, which is currently drafting a Communication on promoting cogeneration in the EU.

Eurelectric considers that for cogeneration to live up to its potential, several preconditions must be met. There must be a continuous heat demand (from hospitals or industrial drying processes, for example) and a close matching of electric and heat load since the sale price for the electricity generated must be taken into account. "Within a liberalised market combined heat and power plants with a continuous heat demand could be highly competitive", Eurelectric says.

Member State policies have made a significant difference in the current use of cogeneration in the various EU countries, but Eurelectric takes a firm stand against the outright subsidising of cogeneration. "There are many indications that a general national policy aimed at subsidising directly or indirectly these solutions may cause the construction of plants that are not economically sensible and in the end also have to be questioned from an environmental point of view." It also says that because factors such as the climate, population density, fuel prices, competitiveness of electricity, availability and environmental considerations vary from country to country, the same cogeneration strategy cannot be applied in all Member States.

According to Eurelectric figures, some 44% of electricity in Denmark is generated through combined heat and power, while in Ireland the figure is less than 2%. (The EU average is about 7%.) Finnish cogeneration use runs at some 30%, due mainly to an absence of barriers, high heating demand and a large pulp and paper industry (which provides a continuous heat demand). In contrast, in Belgium a nearly non-existent district heating network, low electricity prices for industry and the absence of political and power company support have kept the penetration of cogeneration to under 3% in the past, although this situation may be changing.