Combined Heat and Power Act (KWKG)

The law on cogeneration revises the 2002 Combined Heat and Power Act to encourage combined heat and power (CHP) generation plants using renewable energies, district heating, heat and cold storage, and reduce CHP from hard coal and brown coal unless necessary. It details how the financial support for existing and new installations, which was increased from €750 million to €1.5 billion, will be used.Subsidies are limited in time and added to market-based electricity price. Net electricity from cogeneration plants should increase to 110 TW/h by 2020 and 120 TW/h by 2025. Projects concerned by the scheme are newly constructed and "modernised" plants with a focus on increased energy efficiency. Subsidies focus on plants feeding the national supply grid, but there are exceptions for sites with a capacity under 100 kW and installations used by industrial consumers. Additional incentives are granted to plants subject to the Greenhouse Gas Emission Trading Law, and projects which disposed of coal or lignite receive a bonus of €0.6 cents/kWh over the entire funding period.