Distributed energy generation based on CHP technologies is a short-term cost-effective and ecological solution for increasing energy efficiency. The report is focusing on best practices in the areas of policy design, financial and promotional mechanisms and to some degree on technological aspects. Studying the European initiatives, strategies and legislation in this area is one of key objectives of this report.

CHP benefits among others include:

• Possibility to deliver hot water, space heating, hot air/steam for industrial heat processes, space cooling (using an absorption chiller), dry air generation (with the use of desiccant) in addition to electricity and heat;
• Considerable increase in energy efficiency. Cogeneration’s simultaneous generation of electrical power and thermal energy ensures greater energy efficiency (70-90%) in comparison with conventional systems producing power and heat separately (35%). Less fuel is required to produce a given amount of energy because the conversion and transmission losses associated with the separate production of power and heat are also avoided.
• Greenhouse gas reduction. Emissions from cogeneration plants are considerably lower than emissions from conventional power plants.

The project objectives were:

• To survey the current APEC economies’ priorities, strategies and plans for the CHP application in distributed energy generation and also to study the European initiatives, strategies and legislation in this area;
• To study and share best practices and experiences of practical projects in which CHP technologies are applied for distributed energy generation in cold climate and/or on islands;
• To develop recommendations for promoting use of CHP in distributed energy generation in specific conditions (islands and cold climate territories) including measures aimed at overcoming barriers (including significant upfront capital investment) identified during the project.