6.2.2007 Official Journal of the European Union L 32/183 COMMISSION DECISION of 21 December 2006 establishing harmonised efficiency reference values for separate production of electricity and heat in application of Directive 2004/8/EC of the European Parliament and of the Council (notified under document number C(2006) 6817) (Text with EEA relevance) (2007/74/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Commu- nity, Having regard to Directive 2004/8/EC of the European Parliament and of the Council on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42[EC (!), and in particular Article 4(1) thereof, Whereas: (1) Pursuant to Article 4 of Directive 2004/8/EC the Commis- sion is to establish harmonised efficiency reference values for separate production of electricity and heat consisting of a matrix of values differentiated by relevant factors, including year of construction and types of fuel. (2) The Commission has completed a well-documented analysis in accordance with Article 4(1) of Directive 2004/8/EC. Developments in the best available and economically justifiable technology which were observed during the period covered by this analysis indicate that for the harmonised efficiency reference values for separate production of electricity, a distinction should be drawn relating to the year of construction of a cogeneration unit. Furthermore, correction factors relating to the climatic situation should be applied to these reference values because the thermodynamics of generating electricity from fuel depend on the ambient temperature. In addition correction factors for avoided grid losses should be applied to these reference values to take account of the energy savings obtained when grid use is limited due to decentralised production. (3) By contrast, the analysis showed that concerning the harmonised efficiency reference values for separate produc- tion of heat a distinction relating to the year of construction was not necessary as the net energy efficiency of boilers has hardly improved in the period covered by the analysis. No correction factors relating to the climatic situation were required because the thermodynamics of generating heat from fuel do not depend on the ambient temperature. In () OJ L 52, 21.2.2004, p. 50. addition correction factors for heat grid losses are not required as heat is always used near the site of production. (4)  The harmonised efficiency reference values have been based on the principles mentioned in Annex IIT (f) of Directive 2004/8/EC. (5) Stable conditions for investment in cogeneration and continued investor confidence are needed. In this perspec- tive it is appropriate to maintain the same reference values for a cogeneration unit for a reasonably long period of ten years. However, taking into consideration the main aim of Directive 2004/8/EC to promote cogeneration in order to save primary energy, an incentive for retrofitting older cogeneration units should be given in order to improve their energy efficiency. For these reasons the efficiency reference values for electricity applicable to a cogeneration unit should become stricter from the eleventh year after the year of its construction. (6) The measures provided for in this Decision are in accordance with the opinion of the Cogeneration Commit- tee, HAS ADOPTED THIS DECISION: Article 1 Establishment of the harmonised efficiency reference values The harmonised efficiency reference values for separate produc- tion of electricity and heat shall be as set out in Annex I and Annex II respectively. Article 2 Correction factors for the harmonised efficiency reference values for separate production of electricity 1. Member States shall apply the correction factors set out in Annex [I(a) in order to adapt the harmonised efficiency reference values set out in Annex I to the average climatic situation in each Member State. The correction factors for the average climatic situation shall not apply to fuel cell-based cogeneration technology.