20080630-IEA-Combined_Heat_amp_Power_and_Emissions_Trading_15页_1mb

According to IEA's information paper, "Combined Heat & Power and Emissions Trading: Options for Policy Makers," the treatment of CHP in emission trading schemes (ETSs) is crucial to realize the significant greenhouse gas (GHG) emission reduction potential of this energy efficiency technology. Current evidence suggests well-designed ETSs should incentivize, not penalize, high-efficiency CHP.

Core Problem for CHP: A key challenge is that while CHP reduces global GHG emissions overall, its emissions increase on-site. This creates a conflict for source-based ETSs, which require sites to account for their emissions directly (increase).

Proposed Solution: Double Benchmarking (DB): IEA strongly suggests using "double benchmarking" for allocating allowances. This method compares a CHP plant's output (both heat and electricity) simultaneously to the emissions of a separate, conventional reference plant producing purely heat (e.g., a boiler) and one producing purely electricity (e.g., a central generation plant). Under DB:
* Allowances are calculated for both the heat output (according to boiler efficiency standards) and the electricity output (according to central plant efficiency standards).
* By allocating fewer allowances than a standard separate plant would require under grandfathering, DB better reflects the combined ambient emissions avoided by CHP, addressing the onsite emission increase issue.

Alternative Measures: Besides or alongside DB, IEA identifies other potential policy measures:
* Reduced Compliance Factors: Slower annual emission reduction requirements for existing CHP plants to reward early investment.
* CHP Bonus Allocation: Providing extra free allowances or a direct rebate equivalent to the GHG emissions saved by CHP generation.
* Separate CHP Sector: Grouping CHP installations into a specific sector for ETS treatment, applying customized rules like DB or stricter requirements.
* Dedicated Part of NER: Setting aside allowances within the New Entrant Reserve specifically for new CHP plants.
* Linking Free Allocation to Output: Providing free allowances based only on the electricity output volume, effectively neutralizing the increased onsite CHP emissions cost.

Incentive Importance: Recognizing CHP in an ETS is vital not only for maximizing emissions reductions but also as a crucial tool for policymakers and others to grasp the unique role and potential of CHP in decarbonizing the energy sector, especially alongside other carbon mitigation strategies like renewable energy.

Background: CHP/DHC is recognized as a highly efficient way to generate electricity and provide heat simultaneously, often missing from carbon accounting if one component is included.
Emissions Trading: ETSs set a cap on total emissions, creating scarcity and a price on emissions through trading. Various allocation methods exist, but ETS design must consider CHP's dual output and overall carbon benefits.
ETS Experience: Evaluating past and planned ETS schemes (e.g., EU ETS NAPs, US programs) often reveals inconsistent treatment of CHP, sometimes inadvertently hindering its expansion.
Need for Fair Treatment: Policy must avoid design defects that penalize CHP due to its source-based emissions profile while capturing its significant energy savings.