COGEN Europe The European Association for the Promotion of Cogeneration (Combined Heat and Power - CHP)

Obstacles to Change Each Country poses a different set of issues Economic Factors Tariffs and Fuels Regulatory Factors Wheeling and permits Institutional Factors Connections and monopolies Experience Factors

Overcoming Barriers Acknowledging the benefits Strategy and Targets Getting both the gas and electricity industries aligned Long Term Planning Effective Programmes

Action Plan  A Positive Framework  Fair Access Legislation  Technology Development Programme  Dissemination Programme (e.g. EU Best Practice)  Co-ordination Body for Governments  Fiscal Measures  External Policy  Promotional Networks  Monitoring  Own Use

National Action - 1 Targets Definitions National Planning Constraints Government Programmes Fiscal Measures  Accelerated depreciation  Rating System/VAT  Carbon taxation or a Climate levy  TPF/ESCOs  Grants and subsidies

National Action - 2 Interface with Electricity System –Transparency for connections –Load diversity benefits Standard Contracts for Small-Scale Cogeneration Fuel/Heat/Cooling Price Discrimination Authorisation Simplification Financial Rules - allow Inward Investment

Impact of Government Policies on Economics - % change in IRR

Blueprint for National Governments  Where possible use the market to achieve your environmental objectives;  Remove market barriers to clean, decentralised forms of energy production;  Avoid detailed regulation - it reduces efficiency and does not always work;  Avoid subsidising pollution;  Set clear and ambitious CO 2 objectives -  Redouble political pressure to achieve international consensus on internalisation of environmental costs.