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ECN publication
Toekomst warmtekrachtkoppeling: verkenning van de economische aantrekkelijkheid in een geliberaliseerde energiemarkt
Published by: Publication date:
ECN Policy Studies 1-10-1999
ECN report number: Document type:
ECN-C--99-086 ECN publication
Number of pages: Full text:
83 Download PDF  

Combined heat and power generation (CHP) has made a considerablecontribution to Dutch national energy efficiency and is an important element in future energy and environmental policy programs. Recently, the effect of liberalisation of energy markets on prices and tariffs has been signalled to form a threat to CHP. This study calculates effects in two-market scenarios for a wide variety of CHP options and conditions. Results show that indeed profitability of investments in CHP has substantially decreased. Even in a scenario where electricity prices cover more than just marginal costs, most types of CHP are no longer profitable. Cash flow calculations on existing CHP projects also show a substantial decrease. Estimates on the national CHP capacity for 2010 compared to 1999 amount to a decrease in the competitive scenario and a stabilisation in the moderate scenario. The main cause is the fierce competition on the electricity market and the uncertainty whether prices will cover more than just marginal fuel costs in the near future. Part of the study was also to make an update of the technical and cost inputs of CHP projects. Investments and O&M (operation and maintenance) costs seem to have risen substantially, contributing to the decrease in profitability of CHP. 20 refs.

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