Legal Framework

For more information see also the text about legal framework “KWKG” on the German website www.trima-kwkk.de and the actual law on the official German site:

https://www.gesetze-im-internet.de/kwkg_2016/BJNR249810015.html

According to the Federal Combined Heat and Power Association Bundesverband Kraft-Wärme-Kopplung e.V. (B.KWK)) the new law, namely KWKG 2016 will most probably further promote the expansion of CHP in Germany.

In accordance to the new CHP act, owners of CHP plants with a CHP capacity of more than 100 kWel, are obliged to either directly sell the electricity or consume it. A direct sale takes place when the electricity is being delivered to a third party (§4 Abs. 1 KWKG 2016).

Contrary to larger producers, CHP owners with a CHP-capacity of < 100 kWel have the possibility to sell the produced electricity to their local network operator at a fixed price. Should both parties fail to negotiate a price, the sales price is set equal to the so-called “usual price”. The “usual price” equals the average price for base-load electricity as traded on the Leipzig EEX (aka. CHP /KWK/ - Index) (EEX = European Energy Exchange) (§4 Abs. 2 KWKG 2016). This way the law grants a minimum price (CHP-Index) and a secure take-off party (the network operator).

Supplementary payments according to KWKG 2016

The supplementary payments or Feed-in Tariffs have been risen significantly for certain CHP plant operators, compared to KWKG 2012. For example, CHP plants that feed their electricity into the network receive a much higher remuneration per MWh compared to CHP plants operating under KWKG 2012. Noticeably, when wholesale prices on the Spot Market (EPEX Spot SE in Paris) are negative, CHP owners do not receive the FiT for the hours they have operated (§7 Abs. 7 KWKG 2016).

Table 2: Supplementary payments for CHP electricity according to § 7 KWKG 2016: Feeding into the public network

Most certainly, the new support scheme would attract the attention of a certain type of CHP owners, those being e.g. municipal or any type of utilities. The direct selling of the produced CHP electricity counts to their core competencies, causing almost no additional costs while trying to market it and operate a CHP plant.

Table 3: Supplementary payments for CHP electricity according to § 7 KWKG 2016: Direct consumption; in-house consumption or delivery.

According to KWKG 2016 the in-house consumption is not always eligible for supplementary payments. The new law labels only several types of industries as eligible. Moreover, the payments per kWh are lower, compared to those for producers feeding their electricity into the public network.

Table 4: Supplementary payments for CHP electricity

Duration of the FiT/ Supplementary payments for new, modernized or upgraded CHP plants 

The following chart gives an overview of the FiT/ Supplementary payments duration based on the full utilization hours of a CHP plant.

Table 5: Duration of the FiT/ Supplementary payments for new, modernized or upgraded CHP plants

Supplementary payments for Heating and Cooling networks as well as Heating and Cooling storage 

A financial subsidy, after fulfilling the preconditions stipulated in KWKG 2016, is available for the following arrangements: 

• Heating and Cooling networks (building new or expansion of existing)
• Heating and Cooling storage (building new)

Supplementary payments for building new or expanding existing Heating and Cooling networks 

The construction or expansion of Heating and Cooling networks is eligible for a supplementary payment, if within 36 months after being put in operation, the network’s heating or cooling is supplied at least 75% from a CHP plant. (Heat from renewable energy sources and in some cases, industrial waste heat, is considered equal to heat from a CHP plant (at least 50%), as long as at least 25% of the heat is still provided by a CHP unit). 

Small networks (with an average nominal diameter of up to 100 mm) are eligible for a supplementary payment amounting to 100 € per meter line, however, no more than a total 40% of the identifiable expenses for building or renovating the network.

The payment is limited to 20 million euro per project. The application is to be submitted at The Federal Office of Economics and Export Control (BAFA).

Supplementary payments for building new Heating and Cooling storage

The construction of Heating and Cooling storage is eligible for a supplementary payment, , the storage’s heating or cooling is supplied at least 50% from a CHP plant. (Heat from renewable energy sources and in some cases, industrial waste heat, is considered equal to heat from a CHP plant, as long as at least 25% of the heat is still provided by a CHP unit). 

The payment amounts to 250 Euro for a cubic meter water equivalent of the Heat/Cooling storage.

For storages with a volume exceeding 50 cubic meter water equivalent, the payment cannot exceed 30 % of the identifiable expenses for building the storage.

The payment is limited to 10 million euro per project. The application is to be submitted at The Federal Office of Economics and Export Control (BAFA)

Table 6: Supplementary payments for Heat and Cooling networks and Heating and Cooling Storages

Source: © fotogestoeber / Fotolia.com