Combined Heat and Power Law

Last updated: 5 November 2017
The Co-generation Act, which came into force in April 2002, gives incentives for the on-going operation and modernisation of existing co-generation units. It is meant to aid municipal CHP plants, which lost competitiveness in the late 1990s due to decreased electricity prices (as a consequence of liberalisation) and increased gas prices. The law allows CHP operators, feeding electricity into the public transmission network, to receive bonus payments on top of the revenue at market price. The amounts of bonus-payments vary according to the type of CHP-installation, and are declining. - Existing CHP plants receive initially (i.e. 2002-2003) a bonus of EUR 0.0153 per kWh. - After modernisation existing CHP plants receive initially (i.e. 2002-2004) a bonus of EUR 0.0174 per kWh. - Existing and new small plants (up to 2 MWe) receive initially EUR 0.0256 per kWh. - Fuel cell plants and new small plants (up to 50 kWe) receive EUR 0.0511 per kWh. The above rates will be progressively reduced from 2004 onwards except for fuel cells and new small plants (up to 50 kWe). Payments will end in 2010 for the small plants, and for plants built before 1990 and modernised in 2002 or later. For non-modernised plants above 2 MW, payments end in 2006 if the plant went into operation before 1990; for other plants, the payments end in 2009. The burden from paying the premium is spread equally over all grid operators under the same principle as the EEG. The incentives are financed by a levy: 0.1-0.15 Euro Cent/kWh for households, 0.5 Euro Cent/kWh for industry (consuming more than 100 000 kWh). Please see the table available at:

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