The 2004 Directive on cogeneration urges EU member states to exploit their potential for combined production of heat and electricity (cogeneration). Eckard Schulze (Energie-Fakten) explains the pros and cons of this energy-saving technique, and casts light on its most meaningful applications and most promising prospects.

E. Schulze ( says a broad range of mature technologies are already available for cogeneration purposes that can use fossil or nuclear carriers, as well as biomass.

According to own data, Energie-Fakten found that cogeneration uses 15 to 20% less energy than separate production of heat and power, which Schulze regards as satisfactory from an environmental viewpoint.

However, the comparative advantage of cogeneration can be constrained by a series of factors: Fuel switching: when cogeneration is combined with a switch from coal to gas, the impact of switching fuel is more important than the impact of cogeneration, "due to the favourable characteristics of gas compared to coal."

Therefore, the advantage of cogeneration decreases with fuel switching; Power plant efficiency: as future coal-fired power plants gain in efficiency, the advantage of cogeneration would loose significance; Demand volume: cogeneration is above all meaningful where there is a large and continuous (not just seasonal) demand for heat close to the cogeneration facility; Facilities' size: large cogeneration facilities are generally more cost-effective than smaller units. But on the other hand, transport of heat to users takes longer and is more expensive.

Another key element for the further expansion of cogeneration is the development of decentralised cogeneration systems in smaller facilities as well as small applications (households, commerce, public facilities). Here, according to Schulze, the advantage is the elimination, or strong reduction of costs for heat transport, as well as avoided costs for using the electricity grid.

E. Schulze concludes by saying cogeneration is "one of the most important instruments for CO2 reduction," and this despite persisting scepticism from businesses.