The threat of global warming is escalating and the redirection of our energy systems towards lower emissions of global CO2 is a vital measure. Electricity use is projected to almost double over the next two decades [IEO, 2005] and more than 10% of the worldwide electricity usage is due to refrigeration. The need for cooling is rising and a common way of producing chilled water for pipeline distribution, i.e. district cooling, is to use compression cooling.

In Sweden, the electricity price is low compared to other European countries. On the European continent, the electricity price is characterised by changes over the day while the price in Sweden varies over the season.

With a fully deregulated European electricity market, with no restrictions on transfer capacity, the electricity price in Europe will most likely level out at an equilibrium price. This means that Swedish customers will face higher electricity prices and prices that vary over the day instead of over the season.

Increased electricity price will make it more attractive to increase the generation of electricity from combined heat and power (CHP) systems in Sweden. Production of cooling with district heating driven absorption chillers (AC) will enhanced the possibilities to produce electricity in these systems. This means that when compression chillers (CC) are replaced with AC, the need for electricity for cooling systems will decrease and at the same time the potential for electricity production in a CHP system will increase.

In Europe, coal-fired condensing power plants have the highest variable cost and thus function as the marginal source of electricity production. Assuming marginal power

production at 33% electrical efficiency, each megawatt-hour of electricity generated in such a coal-fired condensing power plant thus releases approximately one tonne of carbon dioxide (Sjödin, 2003). This argument means that coal condensing is the marginal source in Sweden as well as in the rest of the EU, which is an important assumption in this study.