Cogeneration of heat and power

Cogeneration is the simultaneous production of electricity and useful heat. In a regular power plant, the heat produced in the generation of electricity is lost, often through the chimneys. But in a cogeneration plant it is recovered for use in homes, businesses, and industry.

A trigeneration plant, or combined cooling, heat and power (CCHP), produces cooling (air conditioning) as well as heat and electricity.

Cogeneration plants can achieve energy efficiency levels of around 90%. Increased cogeneration could lower greenhouse gas emissions by up to 250 million tonnes by 2020. Small cogeneration facilities can also be an effective way to supply energy to remote areas without the need for expensive grid infrastructure.

Promoting cogeneration in Europe

The Energy Efficiency Directive (2012/27/EU) requires each EU country to carry out a comprehensive assessment of the efficiency potential for thermal systems, namely heating and cooling.  

Efficiency gains can be achieved in a technologically neutral way, particularly by making use of waste heat and cold from waste incineration, power generation and industry, as well as district heat and cold transmission installations with low losses. 

The most recent assessment was made in December 2015 and the next one is due by 31 December 2020. Updates can be requested by the Commission every 5 years.

EU countries must also ensure that a cost-benefit analysis is conducted of the potential of using cogeneration when they plan to build or substantially refurbish:

  • a heat or electrical installation with a total thermal input exceeding 20MW
  • an industrial installation generating waste heat with a total thermal input exceeding 20MW
  • a district heating and cooling network exceeding a total thermal input of 20MW. In this case, the intention is to see if it is cost-effective to utilise waste heat from nearby industry.


In certain cases, the facilities exceeding 20MW thermal input described above may be exempt from a cogeneration cost-benefit analysis. Specifically:

  • facilities that are expected to operate for less than 1500 hours per year over a five year period. For instance, back-up electricity installations and peak load power plants that are only turned on during very high levels of demand
  • nuclear power installations
  • installations located close to a geological site for carbon capture and storage.

Heating and cooling: Facts & figures

Heating and cooling in buildings and industry accounts for half of the EU’s energy consumption.

In EU households, heating and hot water alone account for 79% of total final energy use (192.5 Mtoe). Cooling is a fairly small share of total final energy use, but demand from households and businesses such as the food industry is rising during the summer months. This trend is also linked to climate change and increases in temperature.

In industry, 70.6% of energy consumption (193.6 Mtoe) was used for space and industrial process heating, 26.7% (73.3 Mtoe) for lighting and electrical processes such as machine motors, and 2.7% (7.2 Mtoe) for cooling.

According to 2018 figures from Eurostat, 75% of heating and cooling is still generated from fossil fuels while only 19% is generated from renewable energy. To fulfil the EU’s climate and energy goals, the heating and cooling sector must sharply reduce its energy consumption and cut its use of fossil fuels.

EU strategy for heating and cooling

Reducing the energy demand in buildings and industry is important to reduce the energy bills and increase the share of renewable energy.

It can be achieved by using advanced construction and design techniques and materials when constructing or renovating buildings. Smart solutions to manage energy consumption in heating and cooling, such as smart thermostats, would help save energy. Energy can also be saved by replacing heating and cooling equipment at their natural end-of-life, with more advanced systems.

Other renewable heating and cooling technologies, such as biomass boilers and solar heating systems, contribute to reducing the important and use of fossil fuels. Energy-efficient technologies and energy management solutions can be applied for the industry, and combined heat and power units can benefit the energy system and local energy generation.

In February 2016, the Commission proposed an EU Heating and Cooling Strategy as a first step in exploring the issues and challenges in this sector, and solving them with EU energy policies.

In line with proposed solutions in the Strategy, the Commission initiated a series of roundtables for the representatives of the industry, over the course of 2018-2019, to discuss the barriers in energy efficiency and renewable energy. Based on the input from the roundtables and the analysis of barriers, drivers and best practice policies, recommendations for EU-level policy interventions were proposed and published in the study “Shaping a sustainable industry: Guidance for best practices and policy recommendations”. 

Comprehensive assessments

In line with Article 14 of the Energy Efficiency Directive (12/27/EU), EU countries are requested to carry out and notify to the Commission a comprehensive assessment on efficient heating and cooling. If the Commission request it, these assessments can be made every five years. By 31 December 2020, EU countries should submit their assessments. 

The revised Annex VIII to the Directive (Delegated Regulation 2019/826/EU) describes the methodology for the assessments. Notably, the assessments have to comply with legislation on the energy union, and they must be closely linked with planning of policy measures to the Regulation on the Governance of the energy union and climate action (EU/2018/1999).

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