Federal Cabinet Adopts Amendment of the Combined Heat and Power Act

Yesterday the German government adopted a bill amending the Combined Heat and Power Act (KWKG) in an effort to increase the share of combined heat and power plants in the electricity generation from currently 15% to 25% by 2020.

The draft bill leaves the maximum state funding unchanged at EUR 750 million per year, but provides more incentives for investments into heating networks (Wärmenetze), the Federal Ministry of Economics and Technology (BMWi) points out. Besides, heating storage systems (Wärmespeicher) can receive funding for up to 30% of the investment costs pursuant to the draft. Furthermore, retrofitting of condensing power plants with the combined heat and power technology is eligible for funding, as the efficiency of plants will be considerably raised, the ministry points out. The draft bill also improves funding of small CHP units (Blockheizkraftwerke) and the modernisation of existing CHP plants.

Support for CHP plants that are subject to the EU emission trading scheme as of 2013 shall also rise.

The Federal Association of the Energy and Water Industry (BDEW) and the Association of German Municipal Enterprises (VKU) welcomed the KWK bill in general, but criticised that an increase of the tariffs of 0.3 ct/kWh was not enough. The associations demanded to raise tariffs to at least 0.5 ct/kWh to provide more incentives for CHP plants.

Sources: Federal Ministry of Economics and Technology, BDEW, VKU

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