Combined Heat and Power Plant Energy Production Under Changing EU Policy

Abstract

In the scope of this study, such EU country, as Latvia was chosen as heat and power production, mainly relies on combined heat and power plants (CHP). The main reason is high share of district heating in major Latvian cities. In addition, Latvian and other EU members’ legislation strictly depends on EU directive and CO2 emission quotes trades. The paper gives a short insight into the development of Latvian energy long-term policy toward the CHP plants during the last decades with respect to EU directives. Which support policy instruments and restrictions depending on CHP plant power, technology, and fuel kind—fossil or renewable, as well as some controversial decisions of recent time and the policy implementation results. The actual situation in the field of CHP in Latvia is placing a focus on relatively low-powered plants. The research considers the perspectives of existing CHP plants and development of the new ones, in the light of recent events in EU energetics such as desynchronization project and gas fuel procurement policy The perspectives are analyzed taking into account both the main trends of modern energy policy trends: energy security, solidarity, trust; integrated market; energy efficiency contributing to moderation of demand; de-carbonization; and research, innovation, competitiveness, and the real situation in the Latvian power industry. The research introduces the problems the existing RES CHP plants meet and the variants of appropriate policy and financing solutions. While focusing on RES, the author also weighs the perspectives of gas CHP plants, including the possibility of implementing relatively new technologies including wood gasification.