Heat and power plant; source: iStock.com/querbeet

© iStock.com/querbeet

Based on a proposal submitted by Federal Minister for Economic Affairs and Energy Sigmar Gabriel, the Federal Cabinet today adopted another two important pieces of energy legislation. On the one hand, the law on the redistribution of responsibility for nuclear waste management was adopted, which transposes the recommendations of the European Commission for the financial monitoring of the phase-out of nuclear energy into German law. On the other, the rules on combined heat and power generation (laid down in the Act on the Preservation, Modernisation and Development of Combined Heat and Power Generation) and on self-supply stipulated in the Renewable Energy Sources Act were amended.

Federal Minister Gabriel said: "Today, we have adopted two pivotal pieces of legislation on energy policy. Both are of major importance as they give planning certainty to the stakeholders concerned. Firstly, we have clarified the redistribution of responsibility for nuclear waste management. We are ensuring that the financing for decommissioning, dismantling and disposal is guaranteed over the long term without passing the costs onto society alone or jeopardising the economic viability of operators. Secondly, we have implemented adjustments to the rules on combined heat and power generation and on self-supply in national law only a few weeks after reaching an understanding with the European Commission."

Additional information on the redistribution of responsibility for nuclear waste management

The draft act implements the recommendations of the Commission for the Review of the Financing of the Nuclear Phase-out (KFK) and divides up the responsibility between the operators of nuclear power plants and the German Government. Operators of nuclear power plants continue to be responsible for the management and financing of the decommissioning, dismantling and packaging of nuclear waste. The German Government will in future be in charge of the management and financing of interim storage and final disposal.

Operators will provide the German Government with funds for interim storage and final repository. These funds will be transferred to a fund designated for the financing of nuclear waste management. The fund will be organised as a foundation under public law. It will collect the funds, invest them and pay them out. Operators shall be obligated to pay an amount of 17.389 billion euros into the fund, which will be adjusted according to the specific payment date stipulated in the law. Operators can terminate their obligation to make any additional contributions against payment of an additional risk surcharge of 35.47 percent that is to be paid into the fund. This risk surcharge will cover any cost and interest-related risks exceeding the calculated disposal costs. The payments into the fund thus include the basic contribution of 17.389 billion euros and the risk surcharge of 6.167 billion euros, i.e. a total sum of 23.556 billion euros.

Further information about the content of the draft bill can be found here (PDF: 56 KB). The draft law (in German) is available here (PDF: 96 KB). The law is now to swiftly pass through the parliamentary procedure. It is scheduled to enter into force on 31 December 2016 subject to state aid review by the European Commission.

Further information on CHP and self-supply

The "amendments to the provisions concerning the generation of electricity from combined heat and power and for self-supply" contain the following points:

  • Combined Heat and Power Act:
    In future, CHP funding will be auctioned for installations between 1 and 50 MW and for innovative CHP systems. The law includes the first essential elements for this and an authorisation to issue ordinances. The necessary ordinance to implement this scheme will be issued in the middle of 2017 and the auctions will commence in the winter of 2017/18. The CHP surcharge exemptions granted to energy-intensive industries will be designed in the same way as the special equalisation scheme of the 2017 Renewable Energy Sources Act: a company which has received a decision granting it an exemption on the basis of the Renewable Energy Sources Act will also enjoy relief under the CHP Act.
  • Self-supply:
    Under the Renewable Energy Sources Act (EEG), existing self-supply installations will remain fully exempt from the EEG surcharge. If they undergo substantial modernisation, existing installations will be permanently granted a reduction of at least 80% of the surcharge; i.e. they will normally pay a maximum of 20% of the EEG surcharge.
    For new installations, in contrast, the rules of the 2014 Renewable Energy Sources Act remain in place. This means that the EEG surcharge will apply to self-supply installations and will be reduced to 40% for new RE plants and highly efficient CHP installations.

The draft law is to pass through the Bundestag and the Bundesrat this year and to enter into force by 1 January 2017. The draft law can (in German) be downloaded here (PDF: 658 KB). Further information about the understanding with the European Commission and the resulting need to implement it in national law can be found (in German) here (PDF: 68 KB).

You can find out more about the current German energy policy in the fortnightly Newsletter "Energiewende direkt".