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Do liberalised electricity markets help or hinder CHP and district heating? The case of the UK


  • Toke, David
  • Fragaki, Aikaterini


This paper investigates whether and how Danish-style combined heat and power (CHP) and district heating (DH) can be implemented in the UK in the context of a liberalised electricity market. There is currently an absence, in the UK, of the Danish system of planning rules and also good tariffs for CHP electricity exports to the grid that led to the development of the Danish system of CHP and DH. However, there are some changes in UK planning practice that may help CHP and DH. These would need to be strengthened, but it is also the case that the way the liberalised electricity market operates in the UK effectively discriminates against small CHP plant selling their electricity to the grid. A Danish system of 'aggregating' CHP-DH plant using thermal stores could help to overcome this problem. However, an alternative strategy would be to establish feed-in tariffs for CHP units that are linked to DH modelled on the Danish 'triple tariff'. This could help the UK's long-term objective of absorbing high levels of fluctuating renewable energy sources.

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  • Toke, David & Fragaki, Aikaterini, 2008. "Do liberalised electricity markets help or hinder CHP and district heating? The case of the UK," Energy Policy, Elsevier, vol. 36(4), pages 1448-1456, April.
  • Handle: RePEc:eee:enepol:v:36:y:2008:i:4:p:1448-1456

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    References listed on IDEAS

    1. Meyer, Niels I., 2003. "European schemes for promoting renewables in liberalised markets," Energy Policy, Elsevier, vol. 31(7), pages 665-676, June.
    2. Lund, Henrik & Munster, Ebbe, 2006. "Integrated energy systems and local energy markets," Energy Policy, Elsevier, vol. 34(10), pages 1152-1160, July.
    3. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
    4. Dave Toke, 2005. "Are green electricity certificates the way forward for renewable energy? An evaluation of the United Kingdom’s Renewables Obligation in the context of international comparisons," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 23(3), pages 361-374, June.
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    Cited by:

    1. Wright, Daniel G. & Dey, Prasanta K. & Brammer, John, 2014. "A barrier and techno-economic analysis of small-scale bCHP (biomass combined heat and power) schemes in the UK," Energy, Elsevier, vol. 71(C), pages 332-345.
    2. Eid, Cherrelle & Bollinger, L. Andrew & Koirala, Binod & Scholten, Daniel & Facchinetti, Emanuele & Lilliestam, Johan & Hakvoort, Rudi, 2016. "Market integration of local energy systems: Is local energy management compatible with European regulation for retail competition?," Energy, Elsevier, vol. 114(C), pages 913-922.
    3. Morlet, Clémence & Keirstead, James, 2013. "A comparative analysis of urban energy governance in four European cities," Energy Policy, Elsevier, vol. 61(C), pages 852-863.
    4. Bolton, Ronan & Foxon, Timothy J., 2015. "Infrastructure transformation as a socio-technical process — Implications for the governance of energy distribution networks in the UK," Technological Forecasting and Social Change, Elsevier, vol. 90(PB), pages 538-550.
    5. Verbruggen, Aviel & Dewallef, Pierre & Quoilin, Sylvain & Wiggin, Michael, 2013. "Unveiling the mystery of Combined Heat & Power (cogeneration)," Energy, Elsevier, vol. 61(C), pages 575-582.
    6. Fragaki, Aikaterini & Andersen, Anders N., 2011. "Conditions for aggregation of CHP plants in the UK electricity market and exploration of plant size," Applied Energy, Elsevier, vol. 88(11), pages 3930-3940.
    7. Colmenar-Santos, Antonio & Rosales-Asensio, Enrique & Borge-Diez, David & Mur-Pérez, Francisco, 2015. "Cogeneration and district heating networks: Measures to remove institutional and financial barriers that restrict their joint use in the EU-28," Energy, Elsevier, vol. 85(C), pages 403-414.
    8. Toke, David, 2011. "UK Electricity Market Reform—revolution or much ado about nothing?," Energy Policy, Elsevier, vol. 39(12), pages 7609-7611.
    9. Wittmann, Nadine & Yildiz, Özgür, 2013. "A microeconomic analysis of decentralized small scale biomass based CHP plants—The case of Germany," Energy Policy, Elsevier, vol. 63(C), pages 123-129.
    10. Taylor, Peter G. & Bolton, Ronan & Stone, Dave & Upham, Paul, 2013. "Developing pathways for energy storage in the UK using a coevolutionary framework," Energy Policy, Elsevier, vol. 63(C), pages 230-243.

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