Germany will launch a plan to support electricity users producing their own energy using efficient cogeneration plants by reducing renewable energy surcharges.
The plan, which would reduce renewable energy surcharges and support the installation of cogeneration plants under a wider effort to support the production of renewable electricity throughout Germany, was approved by the European Commission under its state aid rules, following an agreement in principle reached between German Minster for Energy Peter Altmaier and European Commissioner for Competition Margrethe Vestager.
Germany finances support for the production of renewable electricity through a surcharge, which has been paid by all electricity users since August 2014. This surcharge is also paid by users producing their own electricity, but under the new rules these surcharges will be reduced in the latter case for those generating their own electricity using cogeneration, or combined heat and power.
How did the Commission ensure the scheme meets state aid regulations?
The Commission found that the new scheme would support the installation of highly efficient cogeneration plants only on the condition that the support is needed to trigger the necessary external investment, and does not lead to electricity generators being overcompensated.
This is calculated by the German authorities based on a number of factors, including an assessment of the electro-intensity of the sector in which the company is active, its profitability, the installed electrical capacity and the number of running hours of the installation. The Commission judged that, based on these factors, the reduction in the surcharge is appropriate, and would not unfairly impact competition in the energy generation sector.
Cogeneration, or combined heat and power, generates electricity while at the same time channelling the waste heat that emerges from the process to make it more productive and useful. Because it prevents heat energy being wasted, this method of generating electricity is more efficient than others, and Germany hopes to incentivise those using it to reduce the impact of electricity generation on the environment.
