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7/31/2019 Cc Project Checklist
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project
Plan yourcogeneration
Good Practice Guide/Project Checklist
Frequent Asked Questions List
A Good Practice Guide of small-scale cogeneration
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Good Practice Guide & project checklist................................. 2First rough assessment with easyCOGEN.xls........................ 4Feasibility study carried out by an expert................................ 5Choose your individual financing option ................................. 6Public support mechanisms .................................................... 7
Grid connection....................................................................... 8
New energy contracts ............................................................. 9Administrative licensing procedures ..................................... 10Environmental permit ............................................................ 11Green certificates procedures............................................... 12Call for tender........................................................................ 13Offers comparison................................................................. 14FAQ list General ................................................................ 15FAQ list Country specific ................................................... 17
COGENchallengeFacilitators ............................................... 19
Who we are........................................................................... 20
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Good Practice Guide & Project Checklist
If a cogeneration project is well designed, primary energy savings of 10 to 25% can be
achieved and sometimes even more. Projects with such a high amount of energy
savings are also known as "high efficiency cogeneration". In order to achieve these
results, it must be ensured that as little energy as possible is wasted. This can be only
done by using the total amount of heat and electricity produced by the cogeneration unit
in an effective and efficient way.
The first big challenge for the realisation of a high efficiency cogeneration project
therefore is to find the right capacity of the cogeneration unit. If the unit is too small, the
opportunity to save more energy is missed. If the unit is too big, energy will be wasted.Project developers determine the size of a unit always according to various criteria such
as the heat load, the electricity needs and the regulatory framework. Another important
aspect is the question, whether it is possible to sell excess electricity.
The purchase and the installation of a cogeneration unit is a considerable investment
which needs to pay back. The more hours of a year the cogeneration unit is in operation,
the more money is saved during this year. Therefore, project developers choose a size
for the cogeneration unit which does not cover the highest possible heat load but a loadwhich will allow the cogeneration unit to run for at least half the year.
If the technical and economical analysis is positive for a cogeneration plant, some legal
and other aspects have to be kept in mind. Depending on the size of the plant, an
operator needs permissions from different parties. The checklist on page 3 will provide
all necessary steps, from the first rough calculation to the running of the cogeneration,
but cannot cover all national regulations in the European countries. It is helpful to ask
local facilitators or engineers or the suppliers that have experience with cogeneration
installations. On page 19 of this guide you find the contact details of six regional
Facilitators (Austria, Belgium, France, Germany, Slovenia and Spain), which are
information and support facilities for small-scale cogeneration.
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easyCOGEN.xls
feasibility study
financing option
public support mechanisms
grid connection
new energy contracts
administrative licensing procedures
environmental permit
green certificates procedures
call for tender
offers comparison
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First rough assessment with easyCOGEN.xls
Depending on your site's energy needs and the operational requirements, a range of
energy experts can assist you in carrying out a proper sizing of your cogeneration
project. These may be the supplier of the cogeneration unit, an energy consultant or a
so-called energy services company (ESCO). With a "feasibility study" the experts can
measure your consumption of heating fuel and of electricity and simulate (with a
complex software tool) different sizes of cogeneration units. They can calculate for each
size the profitability and then propose the best option, giving also an assessment of the
economical benefits, the energy and environmental balance, and the technicalintegration into the building.
The challengeteam recommends to you to begin by doing the first assessment
yourself and for free. For this reason, we have created a simplified version of the same
software tool that energy professionals use in their work. The Excel-based software
easy .xls allows also non-experts to carry out a first rough assessment whether
the installation of a cogeneration plant is a good option or not. You can download this
Excel file on the www.cogen-challenge.org website. By entering key data of your project
(buildings, enterprise, offices, etc) in the blue boxes you can assess easily the size and
the profitability of a suitable cogeneration unit (results are shown in the grey boxes).
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Feasibility study carried out by an expert
In most cases a feasibility study is necessary because there is no standard formula to
calculate the size of a cogeneration unit (unlike for a typical boiler). It means that for the
same enterprise or building, there is a wide range of suitable cogeneration size options,
but only one is the most beneficial for you. The main target is to assess the optimum
size of the cogeneration you can install.
A feasibility study, carried out by an expert, will calculate the best option for you. The
study will also give you an assessment of the economical benefits, the energy and
environmental balance, and the technical integration into the building. With all thisinformation, you are ready to order (or not) a cogeneration unit.
The challenge team recommends that the expert uses a simulation software,
like the Excel COGENsim.xls software, which is very useful to carry out the feasibility
study. This software will simulate, 1/4 hour by 1/4 hour, different sizes of cogeneration
units and calculate the price and cost-effectiveness for each size. Then the expert can
suggest to you the best option according your wishes (profitability, CO2 savings,
investment, reliability). This Excel software is freely available on the www.cogen-
challenge.org website.
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Choose your individual financing option
As with all other investments in life the rate of return of your investment in cogeneration
depends on the level of risk that you are willing to take. You have different options:
1. You manage the entire investment by yourself, but you can outsource part or all
of the maintenance. You control the project and the benefits;
2. You ask a bank, even an investment fund, to finance the cogeneration unit and
you can also outsource the maintenance. You also control all the project;
3. You sign a "partnership contract" with an energy supplier or producer, also called
an Energy Service Company (ESCO), who will provide an individual range of
services, from design and installation to operation, maintenance and monitoring,
including finance. Most importantly, the ESCO guarantees the user certain
thermal and electrical outputs at agreed prices from the CHP-installation for the
duration of the contract. In this case, the ESCO owns the unit;
4. You agree to a so-called Third Party Financing (TPF) contract. In this case, a
third partner will carry out all the investment and the maintenance of the unit. But
you stay the owner of the project. You work with the TPF on a open contract
basis: the "true" benefits are retrofit to all parties.
You should thoroughly assess, which option fits best to your financing plan. If you want
to know more about financing cogeneration projects, please consult the Guidance
Document on CHP FinancingGuide on the challenge website.
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Public support mechanisms
This is an important item, but not essential, for the potential investor and needs to be
thoroughly checked. All over Europe there are different public support mechanisms for
cogeneration in place: grants for study costs and/or investment, feeding tariffs, green
certificates, tax allowance, better VAT rates, ... It is sometimes necessary to contact a
variety of different public authorities in order to receive all financial support (for the
actual investment but also for the feasibility study or for the operation costs).
It is important to know how you will finance the cogeneration project in advance because
some financing options, like the "partnership contract", do not allow additional publicsupport mechanisms in some countries. Be aware that sometimes you need to ask the
public authorities before you decide to invest in a cogeneration unit.
You will find more information on the financial and regulatory support mechanisms in
your country on the challengewebsite. In order to have complete information on
possible support, you should also ask a regional expert or Facilitator in this field. On the
last but one page of this guide you find the contact details of six regional Facilitators
(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and
support facilities for small-scale cogeneration.
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Grid connection
The electricity distribution network operator should be involved in the project at an early
stage. In the case of bigger units the impact on the grid needs to be checked and the
point of interconnection needs to be defined. It is also helpful to know the
interconnection costs. These costs can vary from 5 to 20% of the total installation costs,
sometimes cheaper. This information (interconnection feasibility and costs) are part of
the "connection contract" you will generally pay to the distribution network operator. This
step must then occur just after you decide to install a cogeneration unit in your building.
More often, the distribution network operator will facilitate the interconnection of your
cogeneration unit. For instance, the electricity produced by a cogeneration unit might
receive preferential treatment when fed into the grid. The distribution network operator is
normally the right address to find out about the conditions in your country and region. In
some countries you will be asked to add a "decoupling connection" system to your
cogeneration plant. The performance of this decoupling system needs to be tested
before you start to run your cogeneration plant. The distribution network operator will
also check and often change the electricity meter.
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New energy contracts
Running a cogeneration unit may have an effect on the price you pay for the remaining
electrical energy. Even if your electricity bill will decrease after installing a cogeneration
unit, the unit price of your electricity might increase because you purchase less energy
for the same power supply. This effect has been taken into account in the feasibility
study. Now a final contract has to be asked from the energy suppliers, not only for the
remaining electricity (you will probably need after installing a cogeneration unit),
including back-up if the cogeneration unit is switched off, but also for the surplus
produced by the cogeneration unit. The feasibility report, which normally contains anaccurate estimation of the new electricity profiles, can help you in this negotiation. In
some cases your current contracts can remain the same if you install a cogeneration
unit.
Contrary due to the installation of a cogeneration unit your fuel consumption on the site
will increase, you can probably negotiate a better unit price. Therefore you should
contact your fuel supplier and his competitors to amend the contract, if necessary.
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Administrative licensing proceduresAdministrative licensing procedures
In some countries, the authorities will require you to fulfil certain legal regulations
concerning your license, such as to generate electricity and to sell it to a third party.
These regulations vary substantially depending on your country and region. In order to
clarify these rules you need to ask a cogeneration expert even the Facilitator. On the
last but one page of this guide you find the contact details of six regional Facilitators
(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and
support facilities for small-scale cogeneration.
In some countries, the authorities will require you to fulfil certain legal regulations
concerning your license, such as to generate electricity and to sell it to a third party.
These regulations vary substantially depending on your country and region. In order to
clarify these rules you need to ask a cogeneration expert even the Facilitator. On the
last but one page of this guide you find the contact details of six regional Facilitators
(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and
support facilities for small-scale cogeneration.
In Belgium, the best option is to self-consume the electricity produced by the
cogeneration unit. The possible surplus can be sold to a supplier or to a third party. As
the licensing procedures are quite complex, we suggest to sell this surplus only
In Belgium, the best option is to self-consume the electricity produced by the
cogeneration unit. The possible surplus can be sold to a supplier or to a third party. As
the licensing procedures are quite complex, we suggest to sell this surplus only to a
supplier for whom you do not need a license. Even the price from a third party could be
quite higher than the supplier's price.
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Environmental permit
Depending on your home country and region, you might need a permission from the
public authorities in order to install a small-scale cogeneration unit. The building
regulations vary substantially across Europe, so that a general statement towards the
permit procedure is difficult to make. In any case, you should inform yourself on the
specific requirements in your region.
The environmental permit includes in each country certain regulations on air quality that
need to be fulfilled. Emissions of nitrogen oxides (NOx) typically cause the greatest
concern and legislative attention. Nitrogen oxides are toxic, they cause acid rain and
contribute to the depletion of the ozone layer. Emissions can be reduced by a regularly
maintenance of the cogeneration plant and by installing catalysts on the exhaust gas.
Additional emissions regulations may concern sulphur dioxide (SO2), carbon monoxide
(CO) and dust. Modern cogeneration plants can meet these requirements.
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Green certificates procedures specific to BelgiumGreen certificates procedures specific to Belgium
Citizens in Belgium, who want to publish a call for tender, need to certify their future
cogeneration unit if they want to get green certificates. The green certificates system
gives a grant when you save CO2 emissions (in Brussels and Wallonia) or when you
save energy (in Flanders) with your cogeneration unit. These green certificates can be
sold to the energy suppliers who need them to give back to the government, if they do
not want to pay a fine for missing green certificates.
Citizens in Belgium, who want to publish a call for tender, need to certify their future
cogeneration unit if they want to get green certificates. The green certificates system
gives a grant when you save CO2 emissions (in Brussels and Wallonia) or when you
save energy (in Flanders) with your cogeneration unit. These green certificates can be
sold to the energy suppliers who need them to give back to the government, if they do
not want to pay a fine for missing green certificates.
The cogeneration owner can then receive a financial advantage which in some cases
can be very important, as shown in the table below.
The cogeneration owner can then receive a financial advantage which in some cases
can be very important, as shown in the table below.
253 / 292
184 / 183127
128
50
45
0
/MWh
electricity
92113Wind / Hydro / PV cell138113/ 143Biomass cogen (farm biogas/rapeseed)
/MWh
electricity
/MWh
electricityTechnologies
184122 / 146Biomass cogen (wood/landfill gas)
92126Biomass (dual-fuel) cogen
3036Steam turbine
2633Gas engine/turbine
1630Oil cogeneration
253 / 292
184 / 183127
128
50
45
0
/MWh
electricity
92113Wind / Hydro / PV cell138113/ 143Biomass cogen (farm biogas/rapeseed)
/MWh
electricity
/MWh
electricityTechnologies
184122 / 146Biomass cogen (wood/landfill gas)
92126Biomass (dual-fuel) cogen
3036Steam turbine
2633Gas engine/turbine
1630Oil cogeneration
You first need to fill in the forms and send them to the energy market regulator.
Depending on your region, download these documents on : www.ibgebim.be (Brussels:
), www.cwape.be (Wallonia: ) orwww.vreg.be (Flanders: ).
http://www.ibgebim.be/http://www.cwape.be/http://www.vreg.be/http://www.vreg.be/http://www.cwape.be/http://www.ibgebim.be/7/31/2019 Cc Project Checklist
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Call for tender
Unless you know the technology and/or partner you will choose, we suggest to
undertake a call for several tenders for the cogeneration unit which you want to install on
your site. The call for tender depends on the financial option is yours. If you prefer to
keep the management of the project, you will ask suppliers of cogeneration units;
otherwise you have to ask several energy partners (ESCO) or third part financing
partners for an "all include" contract: the cogeneration unit installation, but also the
related services (maintenance and management).
The feasibility study will certainly help you to write this call for tender and, afterwards, to
compare precisely the offers.
On the challenge website, you can download the European Directory of
Cogeneration Developers.
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Offers comparisonOffers comparison
It is important to compare the offers with the results of the feasibility study and to
compare the different offers. During the comparison, you need to determine the best
technology but also the best supplier/partner.
It is important to compare the offers with the results of the feasibility study and to
compare the different offers. During the comparison, you need to determine the best
technology but also the best supplier/partner.
The regional Facilitator as proposed and established by the challenge
campaign, can help you to draw up a list of criteria for this important step. On the last
but one page of this guide you find the contact details of six regional Facilitators
(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and
support facilities for small-scale cogeneration.
The regional Facilitator as proposed and established by the challenge
campaign, can help you to draw up a list of criteria for this important step. On the last
but one page of this guide you find the contact details of six regional Facilitators
(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and
support facilities for small-scale cogeneration.
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FAQ list General
Cogeneration is the simultaneous productionof electricity and heat. For small and medium
installations a combustion engine firing natural
gas, biogas or diesel is often used that drives
a generator to produce electricity. Moreover,
the heat released by the engine in the cooling
water and in the exhaust is recovered by heat
exchangers to be used to heat a building or to
make domestic hot water.
The principal reason is that this technology
makes it possible to consume less primary
energy to produce the same quantities of
electricity and heat, and thus a reduction in
energy costs. It also results in a reduction of
gas emissions and thus pollution.
The answer to this question is not immediate
and very often requires a small pre-feasibility
study. This can be made by yourself thanks to
the pre-feasibility guide Install acogeneration in your establishment, available
from this project. If this looks promising then
further investigations will be necessary.
No, there can be periods when the
cogeneration can stop. During design it is
necessary to consider carefully the
dimensioning of the cogeneration to optimise
the operating regime. In any case, it is normal
that during periods of low or no heat demand
the cogeneration unit will stop.
No, a well designed and well installed
machine is not noisy at all. The majority of the
machines is delivered in a sound-proof
enclosure and can reduce the noise to a very
low level.
No panic, you are always connected to the
electrical supply network and your system of
traditional heating. The change of one to the
other is done in an entirely automatic way.
The cogeneration unit usually can be quickly
repaired.
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No. A European Directive, yet to be adopted,
forbids an emergency power unit to function
uninterrupted , which is practically the
case of cogeneration. An emergency power
must, no matter what happens, always be
available. However, adding a unit of
cogeneration to the already existing
emergency power unit makes it possible to
profit from a secondary emergency power
unit of comfort. Moreover, this secondary
emergency power unit can be fed with natural
gas and/or fuel oil, contrary to the
principal emergency power unit which can
only be fed with fuel oil.
The cogeneration unit will be normally
controlled by the demand for heat.
If there is no more request for heat, the
cogeneration will stop. It will start again when
the demand for heat is sufficient. A balloon
with a reserve of hot water makes it possible
to accumulate a certain quantity of heat and to
return this heat at another time. It will be the
object of the optimisation and the guiding of
the installation.
There are energy service companies who
offer a complete range of services at
guaranteed prices. They even can arrange
financing. For details see the TPF-guide
(Third-Party Financing) or the database on the
challengewebsite.
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FAQ list Country specific
Brussels Capital:
You obtain green certificates (currently about
70 certificate) when your cogeneration plant
saves more than 5% of CO2 compared with
the CO2 emissions of the traditionalproductions of the same electricity and heat.
Wallonia:
You obtain green certificates (currently about
90 certificate) when your cogeneration plant
saves more than 10% of CO2 compared with
the CO2 emissions of the traditional production
of the same electricity.
Flanders:
The Flemish Region has two different
certificates:
Green power certificates (for installations
with electricity production from renewable
energy sources; one certificate per kWh
produced electricity) and the price per
certificate = 90 to 95% of the penalty price
( 125);
CHP certificates (only for installations who
have a system to utilise the heat as efficient
as possible and have relative Primary Energy
savings more than 5%). The price per
certificate: +/- 38, penalty price = 40.
Each regional Government gives grants for
the feasibility study costs (about 50%) and for
the investment cost (from 10 to 30%). The
Federal Government gives also a tax
allowance reduction of 13.5% (private
companies) to 15% (residential)
Fixed feed in tariffs are offered for
cogeneration unit respecting the
requirements: for units below 36 kVA it is the
same as the price paid for electricity and for
units above it is calculated according to a
reference system (combined gas cycle) and
differentiated according to the supplied power.
The contract is running for 12 years. Certain
regional authorities in France (like e.g. in
Rhne-Alpes) are also giving investment
subsidies for units below 1 MWe to owners
from the public and semi-public sector (up to
30%). Feasibility studies can be supported by
the national French energy and environment
agency and also by some regional authorities
(up to 70%).
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The Cogeneration Act (April 2002) guarantees
temporary bonus-payments from the
operators of the public grid for CHP electricity
transferred to the public grid. The amounts of
bonus-payments vary according to the type of
CHP installation, and are declining. An
accreditation from the Federal Office of
Economics and Export Control (BAFA) for the
installation is requested. The amount of the
bonus-payments varies from 1.53 cent/kWh in
2002 reduced annually to 0.97 cent and
phasing out in 2006 for existing CHP plants, to
5.11 cent/kWh for new small installations up to
50 kW if continuous operation is taken up until
end of 2005 as well as for fuel cell plants for
ten years. The estimated total cost of these
bonus payments is 4.45 billion between
2002 and 2010. 2003 approx. 700 million
(bonus-element). Vegetable oil and biogas
fired CHP installations are especially funded
by the Renewable Energy Sources Act.
Supported feed in tariff are only available for
certain installations depending on fuel and
electric power output. Fuel used is exempted
from energy tax. Different investment
incentives are available for installationsdepending on power output and
environmental benefit.
Fixed feed in tariff is offered for excess
electricity sold to the greed. Network system
operator is responsible for the purchase of all
offered electricity and obliged to conclude 10
years feed-in contract. CHP operators are not
paying balancing costs. Fuel used by CHP
unit is exempted from payment of CO2 tax
(0.44 kg CO2/kWhel). Subsides for preparation
of investment documentation are tendered by
Ministry of the Environment and Spatial
Planning.
The Electricity Act (1997) guarantees
temporary bonus-payments for the electricity
transferred either to the grid operator or to the
pool market. The bonus vary from 22.8
MWh to 15.2 MWh depending on the
installed capacity. For small installations under
1 MW there is a special feed in tariff of 68.4
MWh. There are not tax exemptions for fuel
costs. The Government is now giving a
national grant for the feasibility study
(maximum 75% of the study cost) and a
subsidy of 10% (maximum 200,000) for non
industrial CHP investment.
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COGENchallengeFacilitators
Paul Fay
Galvanistrae 28
D- 60486 Frankfurt am Main (Germany)
Tel: +49 69 212 39199
Fax: +49 69 212 39472
Email: [email protected]
Reinhard Six
10 rue des Archers
FR-69002 Lyon (France)
Tel: +33 4 78 37 29 14
Fax: +33 4 78 37 64 91
Email: [email protected]
Ismal Daoud
Cogeneration Facilitator for Wallonie
Bd Frre Orsban, 4
B-5000 Namur (Belgium)
Tel: +32 81 250 480Fax: +32 81 250 490
Email: [email protected]
Jan Bleyl
Kaiserfeldgasse 13/I
A-8010 Graz (Austria)
Tel: +43 316 811 848-20
Fax: +43 316 811 848-9
Email: [email protected]
Carlos Garca
rea de Relaciones Externas
C/ Fray Paulino, s/n
E-33600 Mieres (Spain)
Tel: +34 985 46 71 80
Fax: +34 985 45 38 88
Email: [email protected]
Stane Merse
Jamova 39
SI - 1000 Ljubljana (Slovenia)
Tel: +386 1 5885 250 or 210
Fax: +386 1 5885 377
Email: [email protected]
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Who we are