United Kingdom

UK-8:Quality Assurance Programme for Combined Heat and Power (CHPQA)

Policy Description

The CHP Quality Assurance Programme (CHPQA) aims to encourage the generation and use of high quality CHP. Applicants that can achieve certifcation of "Good Quality" CHP (i.e. that meet certain energy efficiency and environmental performance criteria) can quality for a range of financial incentives and exeptions.

Description

The CHP Quality Assurance Programme (CHPQA), which began in 2000, aims to encourage the use of “Good Quality” combined heat and power [1]. Good Quality CHP refers to CHP generation that is energy efficient in operation, based on threshold criteria (*1)  [2] that must be met or exceeded. A Good Quality CHP plant must achieve 10 % primary energy savings compared to the separate generation of heat and power i.e. via a boiler and power station  [2] (*2).

The CHPQA is a self-assessment and certification programme. Certification under CHPQA enables companies to be eligible for various benefits and financial incentives designed to encourage the development of CHP Schemes [1].

These include [3]:

  • Exemption from the Climate Change Levy (CCL) of all fuel inputs to, and electricity outputs from, Good Quality CHP.
  • Eligibility to Enhanced Capital Allowances for Good Quality CHP plant and machinery.
  • Favourable allocations of carbon allowances under Phase II of the EU Emissions Trading Scheme (EU ETS)
  • An exemption on Business Rates (taxes on the use of non-domestic property in the UK) for CHP power generation plant and machinery.
  • Extension of the eligibility for Renewable Obligation Certificates (ROCs) to energy from waste plants that utilise CHP.
  • Increased support under the Renewables Obligation from with two ROCs allocated to the Good Quality electricity output of CHP fuelled by biomass.

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Information & Outreach, Economic

Position in the Pyramid

About Us

Participation: Mandatory

Period

Start Date: 2000

Policy Linkages

Complements Climate Change Agreements (CCA) Effort Defining
Supported By Climate Change Levy (CCL) Supporting Measure
Complements EU Emissions Trading System (EU ETS) Effort Defining

Agencies Responsible

Department of Energy and Climate Change

Primary Objective: Energy

Objective

CHPQA aims to encourage the generation and use of high quality CHP by providing financial support on the basis of certification of energy efficiency and environmental performance. It also aims to improve the quality of existing and new CHP, in order to enhance its 'environmental and other benefits' .

Target Group

Any Responsible Person (*3), operating a CHP scheme.

Driver of energy consumption or emissions affected by policy: The use of combined heat and power in industry.

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Quantitative Target? no

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: Any Responsible Person (*3) who submits misleading information provided under the CHPQA programme, in order to gain eligibility for benefits, shall be subject to penalty arrangements enforced by the appropriate Government Department [4].

Requirements on the Target Group

Requirements for the target group are defined in the CHPQA Standard [4]. “Responsible Persons (*3) operating CHP Schemes must demonstrate compliance with this CHPQA Standard in order to gain and maintain Good Quality CHP Certification. Certification may be used to determine eligibility for fiscal or other benefits associated with the operation of such Schemes.

For each Scheme, the Responsible Person shall:

  • Apply for Registration
  • Install appropriate monitoring systems and maintain appropriate records
  • Conduct a Self-Assessment and apply for Certification under CHPQA
  • Comply with Validation and Audit obligations
  • Notify the Administrator of any changes to the Scheme relevant to the Registration and Self-Assessment

Support by Government

Once companies have successfully met the criteria  for good quality CHP and have achieved certification of the CHP standard, they are eligible for a range of financial incentives and exemptions.

 

These include [3]:

  • Exemption from the Climate Change Levy (CCL) of all fuel inputs to, and electricity outputs from, Good Quality CHP.
  • Eligibility to Enhanced Capital Allowances for Good Quality CHP plant and machinery.
  • Favourable allocations of carbon allowances under Phase II of the EU Emissions Trading Scheme (EU ETS)
  • An exemption on Business Rates (taxes on the use of non-domestic property in the UK) for CHP power generation plant and machinery.
  • Extension of the eligibility for Renewable Obligation Certificates (ROCs) to energy from waste plants that utilise CHP.
  • Increased support under the Renewables Obligation from with two ROCs allocated to the Good Quality electricity output of CHP fuelled by biomass.

The government provides extensive technical guidance  for the self-assessment of the CHP scheme as well as administrative support in the certification process. Guidance notes are available at http://chpqa.decc.gov.uk/guidance-notes/

Implementation Toolbox

The CHPQA Standard available at http://chpqa.decc.gov.uk/assets/Uploads/CHPQAStandardIssue3.pdf
Guidance Notes available at http://chpqa.decc.gov.uk/guidance-notes/

Complexity of Implementation

Government

The Government has to define and keep up to date the quality standard and guidance notes.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Estimated CO2 avoided emissions due to CHP in the UK were estimated at 9.1 MtCO2 in 2011 (*4) [3]. N/A
Estimated costs/benefits for industry N/A N/A
Estimated cost for government N/A N/A

References & Footnotes

References

[1] Department of Energy and Climate Change (DECC, 2012). CHPQA Programme website: http://chpqa.decc.gov.uk/about-us/. Available at:

[2] MURE II Database on Energy Efficiency Policies and Measures (Industry). Available at: http://www.muredatabase.org/public/mure_pdf/industry/UK17.PDF

[3] DECC (2010). Digest of United Kingdom Energy Statistics (DUKES) 2010. Chapter 6: Combined Heat and Power. Available at: http://www.decc.gov.uk/assets/decc/Statistics/publications/dukes/312-dukes-2010-ch6.pdf

[4] DECC (2009). The CHPQA Standard, Issue 3. January 2012. Available at: http://chpqa.decc.gov.uk/assets/Uploads/CHPQAStandardIssue3.pdf

Footnotes

(*1) Threshold criteria are separated into Quality Index and Power Efficiency categories and both can be determined from three sets of data; fuel used, power generated and heat supplied. Under normal annual operation, the main threshold criteria are Quality Index - 100 and Power Efficiency - 20% [2]. The QuaIity Index is an indicator of the energy efficiency and environmental performance of a Scheme, relative to the generation of the same amounts of heat and power by separate, alternative means [5]. Formulas for the calculation of the Quality Index can be found in the CHPQA Standard document [5]. Power Efficiency is the total annual power output divided by the total annual fuel input [5].

(*2) Directive 2004/08/EC defines high efficiency cogeneration as cogeneration providing at least 10% energy savings compared to separate production.

(*3) Responsible Person means that person or corporate body registered as responsible for the operation of a Scheme [6]

(*4) These figures represent the full impact of CHP in the UK, but are not fully attributable to the CHPQA programme.