Combined Heat and Power Act (KWKG)

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Laws and Policies

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This Act aims to increase electricity generation from CHP plants, to support the launch of the fuel cell sector and funding for construction and expansion of heating and cooling systems. The law intends to contribute to an increase in electricity generation from CHP by 25% by 2020 through the modernisation of existing and construction of new CHP plants. It replaces a 2000 law on CHP. Both laws are primarily intended to promote large CHP plants affected by decreasing electricity prices as a consequence of liberalisation. At the same time the share of CHP-produced electricity was to increase to lower CO2 emissions by 23m tonnes by 2010. Half of this target is to be achieved by the CHP law, the other half by a voluntary agreement with industry. Renewable energy technologies not covered by the EEG may benefit from this law, including co-firing of biomass in fossil-fuelled power plants and biomass-fired CHP larger than 20MW. The premium cannot be combined with other support, particularly not with the EEG. In the original (2002) act, only the CHP share of the quantity of electricity produced was subsidised, which was fed into the grid at all voltage levels for general supply. With effect from 1 January 2009, CHP electricity that is fed into non-public grids or is used for self-supply is also subsidised. Subsidies for new heat networks or expanding heat networks were also included. The 2009 amendment aims to increase electricity generation from CHP plants by promoting the modernisation and construction of CHP plants, support for the fuel cell sector and the funding for the construction and expansion of heating and cooling systems, and the construction and extension of heat and cold storage capacity. With the amendments in 2008 and 2009, the percentage share of high-efficiency CHP plants in electricity and heat generation (primary energy use over 90%) will be increased from 12% to 25%. District heat networks will also be expanded.

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

This sector involves the wholesale and retail selling of goods.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

The activities of industries that transforms raw materials into finished goods through industrial processes.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

This sector provides communication services, software development, and IT solutions.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Combined Heat and Power Act (KWKG)

Target

Policy instrument

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance