The recent amendments of the Combined Heat and Power Act (CHP Act) ensure that the highly efficient technology of combined heat and power generation will continue to play an important role in implementing the energy transition in Germany. This is why the amount of funding allocated to the technology has been doubled – rising from €750 million to €1.5 billion per year. This is intended to give the energy-efficient technology of combined heat and power generation a significant boost.
The amendment to the CHP Act were built upon three key targets:
- To reach the climate targets: In order to do this, support will be provided for power generation in gas-fired CHP installations, which is a particularly low-carbon technology. New construction projects that replace a coal-fired CHP installation will also receive an additional amount. In addition, all existing gas-fired CHP installations used to supply the public will be funded up to 2019 in order to make use of the potential for raising efficiency. This is to enable carbon emissions from CHP plants to make an important contribution to meeting the climate target (40% reduction of carbon emissions by 2020).
- Planning security: The framework for funding will be extended up to 2022. A mid-term expansion target will be defined for the period up to 2025. Comprehensive evaluations will take place in 2017 and 2021. These measures are designed to ensure that the CHP Act can be adapted, where necessary, in order to take account of any developments that occur as a result of the current electricity market reforms. In addition, adjustments have been made to CHP funding schemes and to the rules on reduced surcharges to ensure compatibility with European aid legislation, which creates long-term legal certainty for the stakeholders concerned.
- More flexiblity: We are modernising the CHP Act so that it provides scope for installations to be operated flexibly, which is important for the future as the system copes with an ever increasing share of renewable energy. This greater level of flexibility of CHP plants is also intended to allow the feed-in of renewables to be balanced. In order to achieve this third target, we have improved funding for heat storage, focused funding on CHP electricity that is fed into the public grid, and introduced mandatory direct marketing for this electricity.