Is There a Future for Small-Scale Cogeneration in Europe? Economic and Policy Analysis of the Internal Combustion Engine, Micro Gas Turbine and Micro Humid Air Turbine Cycles

Abstract

If more widely deployed, small-scale cogeneration could increase energy efficiency in Europe. Of the two main commercially available technologies—the Internal Combustion Engine (ICE) and the micro Gas Turbine (mGT)—the ICE dominates the market due to its higher electrical efficiency. However, by transforming the mGT into a micro Humid Air Turbine (mHAT), the electrical efficiency of this cycle can increase, thus enhancing its operational flexibility. This paper presents an in-depth policy and economic assessment of the the ICE, mGT and mHAT technologies for dwellings based in Spain, France and Belgium. The hourly demands of average households, the market conditions and the subsidies applicable in each region are considered. The aim is twofold: to evaluate the profitability of the technologies and to assess the cogeneration policies in place. The results show that only the ICE in Brussels is economically viable, despite all units providing positive energy savings in all locations (except mHAT in Spain). Of the three different green certificate schemes offered in Belgium, Brussels is the one leading to the best outcome. Spain awards both capital and operational helps, although auto-consumption is not valued. The same applies to the complex French feed-in tariff. Conclusively, with the current policies, investing in small-scale cogeneration is in general not attractive and its potential efficiency gains remain unveiled.