Potential of Fossil and Renewable CHP Technology to Reduce CO2 Emissions in the German Industry Sector

Abstract

Based on statistics about fuel demand in industry sectors a method is developed for the estimation of additional combined heat and power (CHP) potential in the main industry sectors. Electricity generation costs of several CHP technologies are then compared to the purchase of electricity on electricity markets. It is found that additional heat potential for CHP is limited in the chemical industry; additional potential is found in the paper industry, food industry and in the manufacturing industry. Additional electricity potential for CHP can be found in all sectors as electricity to heat share is 0.34 at the moment and can be increased with new installations to more than 0.7. The share of renewable fuels used in CHP is highest in the wood and paper industry, additional potential can be found in several branches, but costs are high at the moment. Markets can pick up CHP electricity in the short term and installations are profitable when long operating hours can be reached. Looking in electricity markets with a higher share of renewable energy sources (RES), operation become more restricted making new operation strategies necessary. Times with electricity prices below short term generation costs of CHP installations increase in the future, so that operation will be less profitable. In short term CHP can bring additional CO2 reduction, specific emissions are below new combined cycle units. In the medium to long term additional use of RES fuels and adapted operation strategies will be necessary to lead to further CO2 reductions.