Do liberalised electricity markets help or hinder CHP and district heating? The case of the UK

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This paper investigates whether and how Danish-style combined heat and power (CHP) and district heating (DH) can be implemented in the UK in the context of a liberalised electricity market. There is currently an absence, in the UK, of the Danish system of planning rules and also good tariffs for CHIP electricity exports to the grid that led to the development of the Danish system of CHP and DH. However, there are some changes in UK planning practice that may help CHP and DH. These would need to be strengthened, but it is also the case that the way the liberalised electricity market operates in the UK effectively discriminates against small CHP plant selling their electricity to the grid. A Danish system of 'aggregating' CHP-DH plant using thermal stores could help to overcome this problem. However, an alternative strategy would be to establish feed-in tariffs for CHP units that are linked to DH modelled on the Danish 'triple tariff'. This could help the UK's long-term objective of absorbing high levels of fluctuating renewable energy sources. (c) 2007 Elsevier Ltd. All rights reserved.


Original languageEnglish
Pages (from-to)1448-1456
Number of pages9
JournalEnergy Policy
Issue number4
Publication statusPublished - 1 Apr 2008


  • thermal stores, liberalised electricity markets, CHP and district heating