Combined Heat and Power Act
Act on the Retention, Modernisation and Extension of Combined Heat and Power Generation
On 1 April 2002, the Act on the Retention, Modernisation and Extension of Combined Heat and Power Generation (KWKG) has entered into force replacing KWKG of 18th May 2000. On 22nd December 2016 and 20th July 2022 KWKG has been amended anew.
Pursuant to KWKG, the CHP-share of the electricity volume produced (CHP electricity) that is fed into grids of all voltage levels for general supply is subsidized. The system operator who is obliged to take in the electricity pays an extra charge, which is dependent on the plant type. The law also provides for bonus payments to plant operators that are tied to certain conditions (e.g. southern bonus, coal replacement bonus and bonuses for innovative renewable heat and electric heat generators). A compensation is also paid for CHP electricity not injected into the public supply grid. KWKG also regulates the support of construction and expansion of heating and cooling grids and storages.
The Federal Association of the German Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft e.V. / BDEW) publishes a procedural description on how to establish a standard national procedure for handling and implementing the act, including official material. This procedural description as well as additional useful information on CHP is available on the website of BDEW.
Further useful information concerning KWKG and its procedure, forecasts and accounting can be found on the common German TSOs’ website:
Important information on subsidies according to KWKG and the limitation of the CHP levy for electricity-intensive companies is available at the website of the Federal Office for Economic Affairs and Export Control https://www.bafa.de/. The monitoring of the proper implementation of the KWKG by the network operators is the responsibility of the Federal Network Agency (Bundesnetzagentur/BNetzA) in accordance with §31b KWKG.
§32a KWKG defines the purpose of the Clearingstelle EEG|KWKG as a facilitator, helping "to avoid and to settle any disputes". Clearingstelle EEG|KWKG provides general advice on how to apply the provisions of the CHP Act.
For further queries regarding KWKG, please contact us: liaM-E