Further development of combined heat and power plants (CHP), which would serve to promote climate protection, still lacks clear political support. This is the conclusion of a study on the profitability of CHP conducted by Hans-Joachim Ziesing, Senior Policy Advisor at Ecologic Institute, and Felix Matthes on behalf of the Association of Municipally Enterprises (VKU) in Germany.

For this study, the authors developed the CHP profitability indicator COGIX (COGeneration IndeX). This indicator enables assessments of the economic status of CHP as well as of the profitability of new investments.

In the first of three parts, the authors describe the background of their study, the methodological concept and the parameterisation of the profitability indicator COGIX (COGeneration IndeX).

In the second part, they provide an annual report (2009/2010) of the indicator and conclude that the COGIX indicator is a useful tool in the assessment of the economic status of combined heat and power plants. At this time, CHP plants in Germany are not profitable without subsidies, but that will change with raising prices in the emissions trading market.

Finally, in the third part of the study, Ziesing and Matthes analyse the profitability of new combined heat and power plants. They examine changes in the general economic and political conditions, create a concrete profitability analysis and discuss the results of the model calculation.

The authors arrive at the conclusion that a further development of CHP, which would serve to promote climate protection, necessitates clear political decisions. Under the current conditions, small plants are more profitable than bigger ones.