CHP development: Impacts of energy markets and government policies

Abstract Combined heat and power production (CHP) and district heating (DH) helped achieve the energy policy objectives in the OECD. The high production conversion efficiency of CHP and DH considerably improved energy security. Favourable economic conditions combined with supporting government policies fostered their development. This paper analyses the historical developments of DH systems and CHP production by public utilities and private industry. Examples from various OECD countries illustrate the different conditions which have fostered progress, particularly during the 1970s and early 1980s. But since the mid-1980s economic conditions have changed and increased uncertainties about the economic viability of CHP and DH have emerged. In recent years, however, new initiatives have started to develop. A survey of current activities in OECD member countries shows that this renewed interest is primarily the result of environmental concerns related to energy production and use and, in particular, to the danger of global climate change. These issues are likely to be pivotal parameters for the further development of CHP and DH.