London (Platts)--20Nov2008

Combined heat and power is a "no-brainer next solution that needs to be
invested in," a senior analyst at the International Energy Agency, Tom Kerr,
said Wednesday at the Combined Heat and Power Association annual meeting in
London.

"CHP is a technology that is here already and it's cost effective," Kerr
said, adding: "two-thirds of the fuel we use to produce power is wasted. CHP
can more than double that efficiency."

Looking at CHP as a share of total national power generation, the global
average is just 9%, Kerr said.

He cited several reasons for this, including difficulties in connecting
CHP to electricity grids; a lack of information about cost savings and the
other benefits of using CHP; and too few government champions for the
industry.

"It is not a technology problem but a policy problem and it is
recommended that the government provides more support," Kerr said.

The IEA recommends that the UK government consider creating a national
CHP target and strategy beyond 2010, he added.

In another show of support for CHP, the electricity and gas supplier RWE
npower will continue to push forward with CHP options, said company CEO Andy
Duff at the same meeting.

"By investing in the most efficient plant--the CHP plant--we give
consumers lower prices, but also reduce exposure to energy dependency by
cutting down on gas consumption," said Duff.

He said there is a need for more visible and unequivocal signs of
government commitment for CHP, which have so far been lacking.