Background report on best practices and informal guidance on installation level CBA for installations falling under Article 14(5) of the Energy Efficiency Directive


The Energy Efficiency Directive (EED), adopted on 4 December 2012, establishes a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. Under the Directive, all EU countries are required to use energy more efficiently at all stages of the energy chain from its production to its final consumption. Member States were required to translate the EED into national law by 5 June 2014. The EED will repeal the existing Cogeneration Directive (2004/8/EC) and the Energy End-Use Efficiency and Energy Services Directive (2006/32/EC) as of 5 June 2014. Article 14(5) of the EED requires Member States to ensure that thermal electricity generation installations and industrial installations exceeding 20 MWth, carry out a cost-benefit analysis when they are planned or substantially refurbished to assess whether the use of high-efficiency cogeneration, the connection to a district heating or cooling network or other means of waste heat recovery would be cost-effective. The obligation to carry-out a cost-benefit analysis also applies to new district heating and cooling networks, when those are planned or when an energy production installation with a capacity exceeding 20 MWth is planned or substantially refurbished within those networks, in order to assess whether the utilisation of waste heat from a nearby industrial installation is cost-effective. If the benefits exceed the costs, the options analysed in the cost-benefit analysis must be included in the authorisation or permit criteria. The cost-benefit analysis has to be in accordance with the general methodological principles set out in Part 2 of Annex IX. A possible methodology for conducting a Cost Benefit-Analysis (CBA) in accordance with Article 14(5) and Part 2 of Annex IX of the Energy Efficiency Directive is presented here. The methodology takes into account the Guidance note prepared by the Commission for the implementation of Article 14, including the carrying out of the cost-benefit analysis by individual installations and district heating and cooling networks.