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Micro CHP represents a potentially disruptive force in the evolving European power markets. It is set to have a considerable impact on the technical and commercial shape of the emerging liberalised electricity market.  The combined influence of economic and environmental drivers, coinciding with technological maturity, has established a framework in which micro CHP is likely to become a reality within two years. It will achieve a significant impact within five years and market saturation within a 10-20 year timescale.  Given an equitable market framework, these drivers will be sufficient to achieve the predicted long-term market penetration rates without artificial incentives. ‘Pump priming’ support such as that offered by the EESoP/EEC programme would help bring the technology to the market faster.

However, there are two key factors determining the growth of micro CHP, which lie within the ambit of government agencies. These are, firstly, the regulation of connection agreements (both from a technical and commercial viewpoint), and the introduction of simplified metering, settlement and trading procedures.  Without the imposition of equitable, transparent connection charges and technical standards, it will be impossible to (legally) connect micro CHP systems without costly and counterproductive components in the system.  Without simplified metering and settlement procedures, it will not be possible to obtain the maximum value from micro CHP generation and thus extend the market and economic viability of the technology.


Micro CHP potential

Within the UK, the potential for micro CHP may be summarised as follows:

  • Ultimately micro CHP may provide an installed generating capacity of 15~20GW.
  • In the UK this capacity will be roughly equivalent to the existing nuclear generating capacity, but the annual output will be somewhat lower as micro CHP is peak following not baseload
  • 13 million homes are suitable for existing micro CHP technologies.
  • Ultimately micro CHP may contribute an annual reduction of 16 million tonnes of carbon equivalent to UK mitigation targets.
  • Within the context of the Kyoto timeframe, it is anticipated that 250,000 systems will be installed annually by 2010, representing an annual additional saving of 1MtCe.
  • Annual savings of up to 30% may be achieved on a typical domestic fuel bill.
  • Micro CHP and associated equipment represents a substantial manufacturing opportunity, worth between £70 and £150 million per annum in the UK alone by the end of the decade.

Urgent government action is required if the target market launch dates and subsequent growth and CO2 mitigation levels for micro CHP are to be achieved. It is anticipated that the first Stirling engine based micro CHP products will become available on a commercial basis during the first half of 2002. These measures therefore need to be implemented during 2001/2002. Specific measures proposed are:

  1. Establish EU and national working groups to develop appropriate connection standards and cost methodologies for connection of micro CHP units within the home and to the network.
  2. Establish an industry-wide methodology for simplified metering and settlement for micro CHP exports, including provision for profile settlement or net metering with appropriate allocation of distribution network costs.
  3. Empower OFGEM to implement the standards developed by these groups.
  4. Targeted implementation of carbon tax exemptions or similar ‘externality’ measures and the application of EESoP/EEC funding to directly influence the rate of growth of micro CHP in the UK.




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This site was last updated on 01 January 2015  © Jeremy Harrison