Act on Combined Heat and Power Generation

For the purpose of promoting this particularly energy-efficient technology for generating electricity and heat at the same time as well as expanding the heat/cold distribution grids and storage facilities required for its successful implementation, the legislator introduced the CHP surcharge. The “Act on the Conservation, Modernisation and Development of Combined Heat and Power” (CHP Act) ensures that operators of CHP plants are compensated for the higher costs associated with these systems by means of a CHP surcharge.

More information about the surcharge, plus annual forecasts, levies and annual statements of accounts, is available on the joint internet platform of the German transmission system operators.

The act is intended to boost net electricity generation from combined heat and power generation plants in Germany. CHP electricity generation was to be increased to 110 terawatt hours by 2020 and to 120 terawatt hours by 2025. This increase helps to save energy as well as protect the environment and the climate and is thus an important element in the transition of the German energy system.

The act governs how electricity generated in CHP plants, powered by hard coal, lignite, waste, waste heat, biomass, gaseous or liquid fuels, is sold and compensated for, and prescribes levies to support the construction of new heating / cooling grids and storage systems for facilities within the scope of the act. CHP power that is compensated for pursuant to the Renewable Energies Act is not covered by the CHP Act.

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