Potential and cost-benefit analyses of combined heat and power production

Potential and cost-benefit analyses for combined heat and power (CHP) application potentials (implementation of the EU Directive on Energy Efficiency) and evaluation of the German CHP law (KWKG – Kraft-Wärme-Kopplungsgesetz) in the year 2014


Federal Ministry of Economics and Energy (BMWi)

Duration October 2013 – October 2014


The EU Directive on Energy Efficiency (2012/27/EU) provides that by 31 December 2015 at the latest, the Member States must carry out a comprehensive evaluation of the potential for using high-efficiency cogeneration of heat and power and efficient district heating and cooling, and must communicate this to the European Commission. In addition, article 14 paragraph 3 requires the Member States to carry out a cost-benefit analysis for their entire territory.
Moreover, according to Art. 12 of the applicable German CHP law, the CHP law must be evaluated in the year 2014.
In light of this background, the German Federal Ministry for Economic Affairs and Energy (BMWi) decided to move the potential and cost-benefit analysis forward to the year 2014, to draw conclusions from it concerning the possible role of CHP in the future heat and power supply system, and to combine this with the evaluation of the CHP law prescribed by this law.

Project goals and results

The goal of this project was the preparation of a comprehensive study as a basis for Federal Government decisions. The study includes the following components, which build on one another: Cost-benefit analysis, analysis of CHP potential, possible role of CHP in the future heat and power supply system, and interim evaluation of the CHP law. The Institute for Resource Efficiency and Energy Strategies (IREES) was responsible for the industrial CHP analysis.

Tasks of IREES

  • The study includes statements concerning the role of CHP in the future heat and power market, as well as an evaluation of the CHP law support. In the light of the results of this evaluation, the framework conditions for CHP were reviewed.
    In determining the status quo, the study was based on current data and statistics. For the future development of demographic, economic and energy industry framework conditions, the consistent set of assumptions of the current energy reference forecast of Prognos AG [Prognos/EWI/GWS 2014] was used.
    The CHP potential for various facilities and performance levels was estimated for the development of process heat demand up to 300°C until the year 2020. Distinctions were made in terms of branches of industry and three enterprise size classes.
    The latter differentiation is new, but is necessary so as to be able to estimate performance classes even for the smaller CHP plants.

Project partner

  • Fraunhofer IFAM

  • BHKW-Consult