Opinion of the Committee of the Regions on the "Proposal for a Directive of the European Parliament and of the Council on the promotion of cogeneration based on a useful heat demand in the internal energy market"
Date: 2003-04-09
Institutions: European Committee of the Regions
Subjects: domestic market, electrical energy, energy policy, energy production, heating

10.10.2003

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Official Journal of the European Union

C 244/1

II

(Preparatory Acts)

COMMITTEE OF THE REGIONS

Opinion of the Committee of the Regions on the ‘Proposal for a Directive of the European
Parliament and of the Council on the promotion of cogeneration based on a useful heat demand
in the internal energy market’

(2003/C 244/01)

THE COMMITTEE OF THE REGIONS,

having regard to the Proposal for a Directive of the European Parliament and of the Council on the
promotion of cogeneration based on a useful heat demand in the internal energy market
(COM(2002) 415 final — 2002/0185 (COD));

having regard to the decision of the Council of the European Union of 5 September 2002 to consult it
on this matter, under the first paragraph of Article 175 of the Treaty establishing the European
Community;

having regard to the decision of its President of 26 July 2002 to instruct the Commission for Sustainable
Development to draw up an opinion on this subject;

having regard to its Opinion on the Communication from the Commission to the Council and the
European Parliament:
‘a Community strategy to promote combined heat and power (CHP) and to
dismantle barriers to its development’ (CdR 382/97 fin) (1);

having regard to its Opinion on the Communication from the Commission to the Council and the
European Parliament: ‘Preparing for Implementation of the Kyoto Protocol’ (CdR 295/1999 fin) (2);

having regard to its Opinion on the Proposal for a Directive of the European Parliament and of the
Council on the promotion of electricity from renewable energy sources in the internal electricity market
(CdR 191/2000 fin) (3);

having regard to its Opinion on the Communication from the Commission to the Council, the European
Parliament, the Economic and Social Committee and the Committee of the Regions on an ‘Action Plan to
Improve Energy Efficiency in the European Community’ (CdR 270/2000 fin) (4);

having regard to its Opinion on the Communication from the Commission to the Council, the European
Parliament, the Economic and Social Committee and the Committee of the Regions on the Commission’s
Green Paper: ‘Towards a European strategy for the security of energy’ (CdR 38/2001 fin) (5);

(1) OJ C 180, 11.6.1998, p. 34.
(2) OJ C 57, 29.2.2000, p. 81.
(3) OJ C 22, 24.1.2001, p. 27
(4) OJ C 144, 16.5.2001, p. 17.
(5) OJ C 107, 3.5.2002, p. 3

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having regard to the Draft Opinion (CdR 344/2002 rev.) adopted by the Commission for Sustainable
Development on 12 December 2002 (rapporteur: Mrs Michèle Eybalin, Regional Councillor, Rhône-Alps
(F-PES)),

unanimously adopted the following opinion at its 49th plenary session on 9 and 10 April 2003 (meeting
of 9 April).

1. The Committee of the Regions’ views

1.1.
The Committee of the Regions is glad that, with its
Proposal for a Directive of the European Parliament and of the
Council on the promotion of cogeneration based on a useful
heat demand in the internal energy market, the Commission
has decided to establish a framework which will help increase
significantly cogeneration’s share of total electricity generation
in the EU, and which is at the same time an important step
towards more rational energy use and towards the reduction
of greenhouse gas emissions.

1.7.
The Committee of the Regions calls on the Commission
and the Member States to involve the regions and local
authorities closely, exploiting their specific experience. They
are often involved in the management and development of
cogeneration through the construction and maintenance of
heat networks which are of key importance for territorial
cohesion.

It stresses the need to call for specific commitments
1.8.
and to guide the Member States on the choice of measures
making it possible to exploit more effectively the existing
potential of cogeneration, without prejudice to the subsidiarity
principle.

1.2.
It stresses the need to make consistent joint efforts to
achieve the objective set out in 1997 in the Communication
on a Community strategy to promote combined heat and
power (CHP) and to dismantle barriers to its development, i.e.
to increase the share of cogeneration from 9 % in 1994 to
18 % in 2010.

1.9.
It points out that the objective of developing cogener-
ation will not be achieved if competitive obstacles to this clean
technology persist because the external costs of traditional
methods of energy generation are not taken into account; the
various measures applied or to be introduced by the Member
States therefore remain essential in the medium term.

1.3.
The Committee of the Regions stresses that cogener-
ation, which is an integral part of the Community strategy, is
an essential feature of the action to combat climate change
which is required in order to comply with the commitments
entered into in Kyoto.

1.4.
It stresses the scale of the potential for reducing
greenhouse gas emissions by means of cogeneration, estimated
at a minimum of 65 Mt CO2 (EC Communication on the
European Climate Change Programme) which can in part be
achieved at a competitive cost.

1.10.
Finally, the Committee of the Regions considers that
the draft directive does not do justice to the challenges set out
about. There are no quantitative objectives for cogeneration
either at Member State or European Union level. No com-
mitment is entered into and the promotion aspect is left vague
at the expense of the presentation of a method of defining
cogeneration.

2. The Committee of the Regions’ recommendations

1.5.
It calls on the Commission, in the framework of its
European strategy for security of energy supply, to step up the
control of energy demand, to which cogeneration can make a
substantial contribution.

2.1. Definition of cogeneration, efficiency criteria

1.6.
It stresses the potential for new jobs offered by this
technology by substituting efficient energy use for fuel imports.

2.1.1.
The Committee of the Regions recognises that it is
necessary to define cogeneration correctly and uniformly in
order to ensure that the intended primary energy gains are
actually achieved, but the definition should be as simple, easily
understandable and flexible as possible.

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2.1.2.
In order to distinguish cogenerated electricity from
that generated using the condensation method, it recommends
that the PROTERMO method be used, which already enjoys
expert and industry recognition.

2.1.3.
It suggests that a single overall efficiency threshold
be established for cogeneration which will adapt over time,
taking account of improvements in the technologies available
on the market.

2.2. Guarantee of origin

2.2.1.
The Committee of the Regions supports the Com-
mission in its intention of imposing on the Member States, as
a precondition for the effective marketing of electricity from
cogeneration, a system of certificates of origin, which would
provide complete transparency for the consumer.

It calls on the Commission to include in the directive
2.2.2.
clear indications regarding guarantees of origin and the
definition of cogeneration, in order to ensure uniform practice
in the Member States.

2.1.4.
Once there is a correct and uniform definition of
congeneration, the Committee considers the establishment of
national reference values for the efficiency of the separate
production of heat and electricity to be of little importance. It
would then seem more appropriate to compare cogeneration
with separate production at European level.

2.3. National potentials

2.1.5.
It has doubts about the definition of the term ‘useful
heat’ used by the Commission, which has a technical and an
economic dimension, and it asks that the term ‘economically
justified’ be clarified.

2.1.6.
In the light of the proposal to apply the PROTERMO
definition of cogeneration, there is no need for any subdivision
into industrial, heating and agricultural applications.

2.1.7.
as their construction requires specific development support.

It welcomes the focus on small cogeneration units,

The Committee of the Regions considers that limiting
2.1.8.
support
threshold below
for cogeneration to an output
50 MW, which will make it difficult to mobilise generation
potential on a large-scale in the industrial sector, is counter-
productive; support should, rather, be graduated in terms of
output and by means of differentiated measures (direct aid, tax
exemptions or industrial investment guarantee funds).

The Committee of the Regions stresses the need for
2.3.1.
the proposed directive to require not only that the Member
States set appropriate and binding objectives related to the
overall objective of 18 % in 2010, but also for the directive to
complement and support effectively the aid measures already
existing at national level.

2.3.2.
It stresses the need to recommend that the Member
States involve the local and regional authorities in the establish-
ment of clear objectives and in the laying down of development
strategies, taking account of the specific situations and needs
of the various areas.

2.3.3.
It stresses that the local and regional authorities do
not have the same fiscal options as the Member States, but
they can promote the use of cogeneration in the infrastructure
for which they are responsible (swimming pools, hospitals,
large office buildings, etc.) and in their spatial planning policies.

It suggests that, in establishing cogeneration potential
2.3.4.
at national and regional
installations be
level, groups of
identified by size with particular attention to the potential of
small installations.

2.4.

Support schemes

2.1.9.
It welcomes the Commission proposal to promote
cogeneration for all types of fuel, but would like to see a
particular and consistent effort made to develop cogeneration
using renewable energy sources, for example wood energy.

The Committee of the Regions recognises that the
2.4.1.
preconditions for the adoption of a decision on a Community
support scheme for cogeneration do not yet exist.

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2.4.2.
The Commission should, as a matter or urgency,
state its plans for future coordination of the directive, the
framework of environmental aid and notifications, and give
details of the evaluation criteria (transparent and practically
orientated), which will make for certainty as to the promotion
measures required by Community legislation.

As recently confirmed by a judgment of the Court of
2.4.3.
Justice of the EC, it considers that the term used in the EC
Treaty limits the concept of aid to direct or indirect support
from state resources, in this way ensuring that systems for
establishing prices involving a legal obligation to purchase are
not subject to a ban on state aid.

2.4.4.
The Committee of the Regions notes that the tax
facilities adopted by each Member State may be applied to
electricity cogeneration in order to increase its percentage
share of overall production.

2.4.5.
It points out that a quota for purchases of cogener-
ated electricity, aimed at protecting the environment, does not
constitute a direct or indirect price support measure.

2.4.6.
It highlights the need to ensure that lack of harmonis-
ation does not lead to the abuse of national aid schemes in the
energy trade between Member States.

2.4.7.
Territorial authorities which own or manage con-
generation plants as part of their responsibilities and which
respect the definition must be able to derive maximum benefit
from the electricity produced. The support measures to be
implemented will have to allow the authorities to play an
active role in this context.

2.5.

Electricity grid connection

2.5.1.
The Committee of the Regions confirms that the
Member States must ensure that technical specifications and

Brussels, 9 April 2003.

operating requirements for connection to both transmission
and distribution grids are drawn up in accordance with
objective criteria, that these are publicised and that they take
account of the size of installations.

2.6. Administrative procedures

2.6.1.
It considers it essential that the Member States step
up their efforts to reduce as far as possible the administrative
barriers to the development of cogeneration and welcomes the
role of the Commission as a critical observer.

It calls for the establishment and simplification
2.6.2.
of arrangements for the financing of
in the
development of cogeneration in the Member States, such as
the system of third-party investors or leasing.

investment

2.7.

Implementation deadlines and miscellaneous

2.7.1.
It points out that the rapid entry into force of the
directive would give an impetus to the development of
electricity from cogeneration in the EU, which would benefit
not only ordinary people but also the economy by giving a
decisive boost to the cogeneration production and equipment
sector, with beneficial consequences for the employment
market.

2.7.2.
It supports the efforts of the Commission to mobilise
the Intelligent Energy for Europe programme in order to
promote research, development and demonstration projects
and specific and efficient cogeneration applications.

2.7.3.
Finally, the Committee of the Regions stresses the
need for follow-up after adoption of the directive so that
corrective measures can be taken if results are not forthcoming.

The President

of the Committee of the Regions

Albert BORE