New Rule for Fuel Cell Heating Systems

The German CHP Act (KWKG) has been a long-time source of subsidies for stationary units producing heat and power as efficiently as possible. Once every few years, these types of laws are revised and naturally, the revisions spark heated debates months before any political decision is made. Just in the nick of time – shortly before the end of last year – the Bundesrat finally approved the CHP Act 2016, so that it could go into effect on January 1.

It took almost a year to pass the new CHP Act: First, there was the discussion of the ministerial draft in July 2015, which formed the basis for devising the act approved by the federal parliament last September. The first through third reading of the draft in the German Bundestag came at the end of last year, before the new CHP Act was passed by the Bundesrat on Dec. 18, 2015.

The most important changes compared to the 2012 version are the reduced payments for self-consumption, which were adjusted downwards to 4 cents per kilowatt-hour for plants of up to 50 kW and 3 cents/kWh for plants from 50 to 250 kW (all amounts in EUR). The previous version of the act had granted 5.41 cents/kWh and 4.0 cents/kWh, respectively. Additionally, any owner of larger plants for self-consumption – which used to be subsidized with 2.4 cents/kWh between 250kW and 2MW and with 1.8 cents/kWh for systems above 2 MW – will no longer receive any support from the program. The feed-in into the public grid used to be subsidized with 5.41 cents/kWh over ten years for smaller systems. Here, the subsidy level was raised across all categories (for systems up to 50 kW to 8 cents/kWh), but the grant period was reduced to 60,000 full hours in operation. Still, it is more than the 45,000 hours initially planned as part of the ministerial draft.

Fuel cell systems have their own special transition rule in the CHP Act, according to the BHKW info center. It applies as long as the technology rollout program (TEP, see interview) has not been implemented. This means that operators of fuel cell systems can claim incentives based on the 2012 CHP Act if a binding order for a CHP plant is placed by Dec. 31, 2016, and the system is brought into operation by Dec. 31, 2017.

The VDI Society Energy and Environment (GEU) welcomed the extent of planning security introduced with the revisions, but criticized the target figures of the expansion (110 TWh/a by 2020 and 120 TWh/a by 2025) as not ambitious enough. The General Manager of the German Association of Local Utilities (VKU) and former parliamentary state secretary at the BMVI, Katherina Reiche, had already complained in summer 2015: “Unfortunately, the now envisioned subsidy conditions won’t suffice when taking a look at the most recent and efficient plants.” More precisely, she called on the federal government to stick to the expansion targets laid down in the coalition agreement. She said: “The formula needs to be: Two times 25 – 25 percent CHP by 2025.” The current targets are equal to a 19% share in 2020 and a 20% share in 2025.