Value of Combined Heat And Power (CHP) Systems

Combined heat and power ("CHP") systems tick many boxes. They offer both heat and power economically and efficiently. They range from small, local systems using, for example, wood chip burning boilers to wide-ranging partnerships between landowners and utilities. Naturally, they are attractive, both to occupiers and planning authorities.

However, a recent European decision shows that CHP systems can cause competition issues. The case concerned a CHP system installed and managed by the owner of Leipzig Airport, with a view to supplying all its occupiers with heat and power. One occupier, though, preferred not to use the owner's CHP system. It sited an EU Directive governing the generation, transmission and distribution of electricity that outlaws arrangements which are anti-competitive. There are some exceptions, but the European Court ruled that these did not apply to the Airport owner. The Court ruled that the occupier's chosen supplier could provide power using the owner's CHP system.

Nevertheless, both CHP systems themselves and legal solutions for their implementation are evolving. Such solutions include the retention of appropriate rights for both owners and occupiers. Faegre & Benson LLP are well-placed to assist developers in the successful implementation of CHP systems throughout Europe; Faegre & Benson are also well-placed to assist many owners and occupiers identify legal issues relating to existing CHP systems.