Energy Forum 2: Combined Heat and Power (Cogeneration) Systems

Cite As:
Grossman Gershon, Ayalon Ofira. Energy Forum 2: Combined Heat and Power (Cogeneration) Systems Haifa Israel: Samuel Neaman Institute, 2006.

The Samuel Neaman Institute for Advanced Research in Science and Technology, within the framework of its activity in the energy field, conducts meetings of the “Energy Forum”, devoted to discussions and debate over energy related issues of national importace.

The Energy Forum holds focused discussions regarding specified themes, and teams of subject-matter experts are invited to participate. The aim of these focused debates is to deliberate over specific and relevant questions; enable dialogue and coordination between participating bodies; and develop recommendations on implementation strategies for advancing the subject at hand that could then be presented to decision-makers.

The Government of Israel has previously passed two resolutions intended to advance the production of electricity by private producers (1999) and, more specifically, by cogeneration (2002).

In light of these resolutions, the second thematic meeting of the Energy Forum was devoted to the subject of Combined Heat and Power (Cogeneration) Systems.

The meeting was held at the Samuel Neaman Institute at the Technion on May 22nd 2006 with over 20 experts on the subject, from industry, academia, governmental departments and the public sector participating.

The Forum participants were selected with great care for their thematic expertise and have formed, undoubtedly, a unique group of first-rate professionals in the energy field in general, and in cogeneration systems, in particular.

During the first part of the meeting several participants presented information on worldwide and Israeli activities in the area of cogeneration, discussing technological and economic considerations along with targets set by different nations to encourage efficient energy systems.

*A complete record of the presentations

During the second part of the meeting the participants engaged in an open discussion of the issues presented and the operative conclusions that could be derived from them.

This brief synopsis provides highlights of the ‘Summary and Conclusions’ chapter from the full report (in Hebrew). The goal is to present these recommendations to decision makers and create the momentum for placing the State of Israel in the forefront of nations developing efficient energy systems. Forum participants were in complete agreement about the need for public awareness campaigns, hoping that it will serve as a “call to action” for regulators and government legislators.

Summary and Conclusions

Combined Heat and Power (CHP, cogeneration) is an efficient and reliable approach for generating both power and thermal energy from a single fuel source. By installing a CHP system designed to meet the thermal and electrical base loads of a facility, CHP can increase operational efficiency and decrease energy costs, while reducing emissions of air pollutatnts (per unit energy produced) such as NOx, particulates and SOx etc, as well as a reduction in greenhouse gases that contribute to the risk of climate change. In addition, the increased efficiency is another step in a strategy towards the security of energy supply.

The European Parliament Directive 2004/8/EC regarding the promotion of cogeneration has set a target of doubling the share of electricity production from cogeneration to 18% by 2010. Projections show that meeting this target is expected to lead to avoided CO2 emissions of over 65 Mt CO2/year by 2010.

It should be noted that cogeneration is intensively implemented in cold countries, where district heating is part of the infrastructure of the populated cities. Denmark, for example, supplies more than 50% of its energy by cogeneration. In Israel, the potential of cogeneration exists in industries and institutions requiring both heat and power. The total potential of CHP systems in Israel is estimated at 3000MW (2000MW for the industry, 500MW for the commercial sector and 500MW for additional micro-systems). These figures amount to 20-30% of current electricity demand.

The main obstacles that limit more widespread implementation of cogeneration in Israel are mainly the limited availability of natural gas (Following years of discontinuous negotiations between Egypt and Israel, the long-delayed plan for Egypt to supply natural gas to Israel was finally signed in August 2005. The agreement allows for the EMG company to supply 1.7 BCM of natural gas a year to the Israel Electric Company (IEC) for a period of 15 years); The uncertain future price of natural gas (The price set in the agreement between EMG and IEC is, according to several sources, 50% cheaper than available to private gas consumers); The rising price of diesel fuel as well as statutory and bureaucratic restrictions.


In general, the government should, first and foremost, implement its own decisions and work towards encouraging private energy producers in general, and producers by cogeneration, in particular. By doing so, the overall energy production capacity will increase, the dependence of Israel on imported fuel will be reduced along with a significant reduction in air pollution.

The recommendations of the Forum include three types of policy instruments:

1. Infrastructural Measures:

1.1 There is a need for infrastructural guarantees that will reduce the potential risks in electric power production projects and enable private producers to connect and sell electricity to the national grid. The so-called Connectivity Protocol should be simplified and clarified to enable long-term contracts for selling electric power to the IEC.

1.2 There is a need for a national infrastructure overview - a comprehensive master plan that will map and identify possible cogeneration plants in Israel, while taking into account the environmental impact of these systems.

1.3 Natural gas should be made available to potential cogeneration producers.



2. Economic Measures:

2.1 Current conventional electricity prices do not reflect the environmental burden and costs associated with the electricity production process. Inclusion of the environmental costs would raise the price of electricity but will lead to a natural development of more efficient and environmentally friendly energy systems. The tendency to refrain from internalizing the environmental costs results in subsidizing the polluter and transferring the costs of environmental treatment to the next generations or to the tax-payer at large.

2.2 There is a need to set clear, long term, economic incentives for private energy producers, in general, and for cogeneration producers, in particular. The premium paid for these facilities should be attractive and easy to calculate.

2.3 As already mentioned, the most suitable fuel (in terms of cost and environmental impact) for cogeneration plants is natural gas; under the current lack of availability, the second best is diesel fuel. During the last years, taxation of diesel has increased significantly and eroded the economic basis for diesel operated cogeneration plants. There is a need to review the taxation of diesel for cogeneration.


3. Establishment of an independent authority for energy conservation, as proposed in the Ministry of National Infrastructure Master Plan:

3.1 The proposed authority will promote and implement systems and technologies to increase energy efficiency, including in cogeneration.

3.2 An energy conservation fund, dedicated to the promotion of projects listed above, will be established.

3.3 There is a need for support centers to provide technical and regulatory information to private entrepreneurs, including small factories and institutes, in order to encourage implementation of cogeneration.





























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