Bundesrat Clears Amendment of Combined Heat and Power Act

The Federal Council (Bundesrat) did not object to the amendment of the Combined Heat and Power Act (KWKG), which the Bundestag recently approved. Hence the amended Act can enter into force the day after the promulgation of the amendment in the Federal Gazette.

The bill aims to increase the share of combined heat and power in the German energy mix from roughly 15% to date to 25% by 2020. While the amendment leaves the total of funds for promoting combined heat and power unchanged at EUR 750 million, it intends to better tap the potential, as funds provided under the KWKG were not fully used in the past.

The amended KWKG law mainly raises the premiums which the grid operators to whose grids the CHP plants are connected have to pay on top of the agreed prices for electricity generated in CHP plants. For new and modernised plants they rise on average by 0.3 Cent/kWh (between 1.8 and 5.41 Cent/kWh depending on the different categories eligible for premiums under the KWKG). As of 2013 all eligible installations that are subject to the emission trading scheme receive a premium of 0.3 Cent/kWh.

Although the Bundesrat did not oppose the KWKG bill, it issued a statement pointing out the areas and technologies in which it sees further need for support.

The Bundesrat proposes that

  • maximum funding for hot and cold thermal storage facilities pursuant to Section 7b KWKG should be raised from EUR 5 million per project to EUR 10 million per project.

The Council further deplores that

  • the potential of generating electricity from industrial waste, e.g. with ORC plants, is likely to be not tapped as the amended KWKG does not provide for premiums for such installations.
  • the amended KWKG does not provide for a technology bonus for fuel cells used in CHP plants; the Council believes this would help the market penetration and lead to economies of scale of this very efficient technology.

The Bundesrat asked the government to review whether increased support in these areas could be given with the next amendment of the KWKG or through other financial support programmes.

Source: Bundesrat

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