Power plant with cogeneration plant; source: Fotolia.com/Matthias Krüttgen

© Fotolia.com/Matthias Krüttgen

The European Commission today approved another two pieces of legislation under state aid rules that are key elements for the implementation of the energy transition: the new funding scheme for CHP plants and the ordinance on interruptible loads (AbLaV) issued by the Federal Ministry for Economic Affairs and Energy.

Federal Minister Gabriel said: “We pushed long and hard for our law in Brussels and, together with the European Commission, we have finally been able to sort out all remaining questions. The granting of CHP funding based on the new Combined Heat and Power Act can finally begin. It is a good sign that legal certainty has been established in this important area for the coming years. In addition, we have been able to ensure that comprehensive funding is available for operators of CHP plants. Funding can now be claimed retroactively to 1 January 2016.”

After more than one year of intensive discussions, the European Commission today approved Germany’s funding scheme for cogeneration plants set out in the new Combined Heat and Power Act. The new law has been in force since 1 January 2016. According to the Commission, the funding granted under the Combined Heat and Power Act constitutes state aid. Disbursement of such grants needs to be authorised in advance by the European Commission. Based on the approval of the European Commission, CHP funding support can now be paid retroactively to 1 January 2016. The Federal Office for Economics and Export Control (BAFA) is in charge of processing the funding requests and will shortly dispatch the funding approval notifications once the review of the substance of the approval has been completed. By that date, which will be announced separately, the general order for CHP plants will also apply.

The key change in the law concerns medium-sized CHP plants (with a nominal electrical output of 1-50 MW). The level of funding for such plants will in future be determined by the outcome of an auction-based bidding process. The ordinance necessary for putting the bidding procedure in place will be enacted in 2017. The auctions will commence in the winter of 2017/18. Further information can be found here.

As expected, the European Commission also announced today that it will closely examine the rules on the reduced CHP surcharge for large electricity consumers. The Federal Government is confident that the Commission will take a favourable decision on this issue as well.

Furthermore, the European Commission confirmed today that the new version of the ordinance on interruptible loads is compatible with European state aid rules. It allows transmission system operators to conclude contracts with major industrial electricity consumers which are able to temporarily reduce their power consumption (“interruptible loads”). The ordinance thus serves as a flexible instrument for emergencies, such as low frequency in the grid, as well as for balancing the system and relieving congestion. The new version of the Interruptible Loads Ordinance entered into force on 1 October.