Germany doubles CHP funding in push to hit 2020 emissions target

Published 14:17 on September 23, 2015  /  Last updated at 14:17 on September 23, 2015  /  EMEA, EU ETS  /  No Comments

Germany will double its support for combined heat and power (CHP) plants through a revision to an existing law, the German Ministry for Economic Affairs and Energy announced Wednesday, in an effort to cut the country’s CO2 output by 4 million tonnes and bring it closer to meeting its 2020 emissions goal.

Germany will double its support for combined heat and power (CHP) plants through a revision to an existing law, the German Ministry for Economic Affairs and Energy announced Wednesday, in an effort to cut the country’s CO2 output by 4 million tonnes and bring it closer to meeting its 2020 emissions goal.

Germany’s federal cabinet has approved changes to the CHP Act that will see financial support rise to €1.5 billion per year, to “ensure that highly-efficient and climate-friendly cogeneration plays an important role in the future” in further implementing the country’s Energiewende initiative, the ministry said in a press release.

CHP technology captures and utilises the heat that is a by-product of electricity generation, in a single, highly-efficient process.

The amended law focuses support mainly on gas-fired CHP plants, while CHP facilities using hard coal or lignite will not receive funding in the future.

“New projects that replace a coal-fired CHP plant will also receive a bonus,” the ministry said.

Existing gas-fired CHP plants that may not have qualified for support under the previous version of the law will now be funded for four years to prevent their closure.

Germany’s largest power consumers will be lumped with the bill to help cover the increased cost of the initiative while shielding households and energy-intensive industries from higher electricity prices.

In order to reach its 2020 target to cut GHG emissions by 40% below 1990 levels, Germany must seek reductions in the realm of 22 million tonnes of CO2 from its power sector.

To achieve that, the government earlier this summer said it would pay to idle around five of the country’s oldest lignite-fired power plants with a total capacity of 2.7 GW.

The mothballed plants will be put in a reserve to support baseload generation levels, but observers have warned that the plan could be illegal under EU state aid rules and that it is likely to fall short in delivering the forecast CO2 reductions.

By Mike Szabo – mike@carbon-pulse.com

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