Cogeneration bonus – what is it and who can apply for it?

When talking about cogeneration units in the context of the support system, we use their power, which determines their size. Specifically, we distinguish the following types:

• small cogeneration units (up to 1 MW) - these are micro and small cogeneration installations often used in facilities such as hotels, hospitals, shopping centers, industrial plants, or residential estates;
• medium power units (from 1 MW to 50 MW) - often used in larger industrial plants, municipal heating plants, and commercial or business complexes;
• large cogeneration units (above 50 MW) - installations used in large combined heat and power plants, which supply both electricity and heat on an industrial scale and for entire cities. They are often key energy sources in energy systems, providing stability and reliability of supply.

A new trend gaining popularity is hybrid units and installations equipped with energy storage systems. They can combine traditional cogeneration technologies with energy storage. This enables optimal use of produced energy and increases supply stability. Energy storage is especially useful when electricity production and demand are not synchronized.

According to Directive 2012/27/EU on energy efficiency, every installation applying for support in the form of a cogeneration premium must demonstrate that it is high-efficiency and contributes to significant CO₂ emissions reduction. The European Union sets increasingly strict targets for reducing greenhouse gas emissions, which affect national policies.

Cogeneration allows for more efficient use of fuels because energy that in traditional processes could be lost (e.g., as waste heat) is used for heating buildings, domestic hot water, or industrial processes. To qualify for the cogeneration premium system, an installation must meet specific technical criteria aimed at ensuring high efficiency and minimizing environmental impact. The main requirements include:

• high efficiency of cogeneration – the installation must have a high efficiency ratio, meaning that the combined production of electricity and heat consumes less fuel compared to separate production of these media. According to regulations, the energy efficiency of the installation must be at least:
  • 75% for cogeneration units with devices such as: back-pressure steam turbine, gas turbine with heat recovery, internal combustion engine, microturbine, Stirling engine, fuel cell,
  • 80% for cogeneration units with devices such as: gas-steam combined cycle with heat recovery, extraction-condensing steam turbine.
• CO₂ emissions reduction – cogeneration must contribute to reducing greenhouse gas emissions compared to traditional energy production methods, and the specific emission level must not exceed 450 kg/MWh.
• power source – for installations using fossil fuels, they must meet specific emission and efficiency standards. Installations based on renewable sources such as biogas or biomass can benefit from additional advantages within the cogeneration premium scheme.
• unit certification – the cogeneration installation must be certified as high-efficiency according to EU regulations (Directive 2012/27/EU on energy efficiency) and Polish law. The certification process includes an efficiency audit confirming compliance with energy standards.
• storage capacity (optional) – installations equipped with energy storage systems may receive additional support, as they enable better management of produced energy and its consumption during peak periods.

The Act on promoting electricity from high-efficiency cogeneration defines the following forms of support for CHP:

Guaranteed premium

A subsidy for:

• electricity generated, fed into the grid, and sold from high-efficiency cogeneration by a producer in a modernized cogeneration unit with installed electric power not less than 1 MW and less than 50 MW or an existing cogeneration unit with installed electric power not less than 1 MW and less than 50 MW,
• electricity generated from high-efficiency cogeneration by a producer in:
  • a new small cogeneration unit,
  • a significantly modernized small cogeneration unit,
  • an existing small cogeneration unit,
  • a modernized small cogeneration unit,
  • an existing cogeneration unit with installed electric power not less than 1 MW and less than 50 MW, fired with methane released and captured during underground mining in active, liquidating or liquidated hard coal mines,
  • a modernized cogeneration unit with installed electric power not less than 1 MW and less than 50 MW, fired with methane released and captured during underground mining in active, liquidating or liquidated hard coal mines.

Cogeneration premium

As a subsidy for electricity generated, fed into the grid, and sold from high-efficiency cogeneration by a producer who won the auction, in:

• a new cogeneration unit with installed electric power not less than 1 MW and less than 50 MW,
• a significantly modernized cogeneration unit with installed electric power not less than 1 MW and less than 50 MW.

Individual cogeneration premium

a subsidy for electricity generated, fed into the grid, and sold from high-efficiency cogeneration by a producer who won the call, in:

• a new cogeneration unit with installed electric power not less than 50 MW,
• a significantly modernized cogeneration unit with installed electric power not less than 50 MW.

In Poland, the following institutions are responsible for oversight of the cogeneration premium system:

• Energy Regulatory Office (URE) – the main body responsible for registering installations, organizing auctions, and granting support within the cogeneration premium system. URE also monitors the efficiency of operating installations and verifies submitted reports.
• National Centre for Emission Balancing and Management (KOBiZE) – the body responsible for supervision of CO₂ emissions and other greenhouse gases. Cogeneration installations applying for the premium must regularly report their emissions to KOBiZE:
  • annual emission reports – installations must provide emission data according to specified regulations, and KOBiZE verifies whether the installation meets CO₂ emission limits.
  • compliance verification with limits – in case of exceeding limits, the installation may lose the right to the cogeneration premium, which forces companies to maintain low emissions.
• Ministry of Climate and Environment – the body supervising general climate and energy policies, including the support system for cogeneration. Within its competencies, the Ministry issues regulations and legislative changes concerning the system's operation.

New or modernized cogeneration units can be registered in the cogeneration premium system implemented by URE. A necessary condition is meeting strict standards concerning energy efficiency and CO₂ emissions, as well as regular reporting of operational results. Cogeneration based on renewable energy sources and hybrid units can expect additional benefits, as they contribute to achieving climate goals and sustainable development.