Price of electricity and support mechanisms

a) The purchase price for produced electricity consist of three parts: so called “usual price”, the surcharge according to CHP Act and the grid costs avoided as a result of decentralized generation. 1. The “usual price” Operators of CHP plants with an electrical capacity < 100 kW may require from the grid operator to purchase the CHP generated electricity. If the operator of CHP plant and the grid operator cannot reach an agreement about the price the CHP generated electricity must be purchased at the usual price. The usual price is the average price for base load electricity on the power exchange European Energy Exchange (EEX) in Leipzig in the previous quarter. 2. CHP surcharge CHP surcharge is paid for each kilowatt-hour generated from new, modernized or retrofitted CHP plants, regardless of whether the electricity is for self-consumption or is fed into the public grid. Precondition for the subsidy is the approval of the CHP plant by the Federal Office of economics and Export Control (BAFA).The amount of the surcharge depends on the electrical output of the CHP. According to CHP Act the surcharge for installations with capacity < 50 kW from 1 January 2016 is: 1. For electricity fed into electricity grid - 8 cents/kWh and for self-consumed electricity - 4 cents/kWh paid: a) For new CHP plants for 60,000 full hours of use; b) For modernized CHP: -for 5 years or alternatively for 15,000 full hours of use, if the costs of the modernisation amount > 25 <= 50% of the costs for the new construction of the CHP plant, - for 10 years or alternatively for 30,000 full hours of use if the costs of the modernisation amount > 50% of the costs for the new construction of the CHP plant. These surcharges are paid by the network operator calculated from the date of the start of the permanent operation. 2. Advanced lump sum payment of the surcharges for brand-new CHP plants < 2 kW Operators of such plants may, at the request by the network operator, get in advance a lump sum payment of the surcharges for cogeneration electricity in amount of 4 cents/ kWh for 60,000 full hours of use. 3. Remuneration of the avoided network costs The CHP unit provides electricity directly on site. Since the electricity does not have to be transported over long distances, there are no costs for grid usage. These “avoided” grid usage costs must be paid to the CHP plant operator. Unfortunately, there is still no fixed compensation for small CHP.

b - no

c - no

d - Investment subsidy for mini- CHP < 20 kW Mini CHP < 20kW may be funded by the Investment incentive program for mini-CHP of the Federal Environment Ministry, implemented by the Federal Office of Economics and Export Control (BAFA) if the requirements of the program are met (it applies at most for new plants): - the CHP plant is recognized as eligible by BAFA; - the CHP plant is not located in an area with a connection to and use of district heating; - availability of electricity meter for produced electricity; - for systems with a capacity of 10 kW or more, an information and communication technology is available which can receive signals from the electricity market and is technically able to respond to them. 1. Basic investment subsidy; The amount of the basic subsidy varies depending on the capacity of the mini-CHP plant. http://www.bafa.de/DE/Energie/Energieeffizienz/Kraft_Waerme_Kopplung/Mini_KWK/mini_kwk_node.html 2. In addition for particularly energy-efficient mini CHP may be paid: a) Bonus subsidy for electricity efficiency – 60% of the basic subsidy; b) Bonus subsidy for heat efficiency – 25% of the basic subsidy The detailed technical requirements for the CHP plants are described in the Guidelines for the promotion of cogeneration plants up to 20 kWel issued by the Environmental Ministry. KfW 433 programme (for FC mini CHP with electrical output 0.25 to 5.0 kW) The programme promotes the purchase of fuel cell heating in residential buildings in the form of a subsidy with a fixed amount of 5,700 euros and a variable bonus linked to the fuel cell's electrical output. electrical output of 0.25 to 5.0 kW in the new building and old building. KfW 433 funding and the mini-CHP grant from the Federal Office of Economics and Export Control (BAFA) cannot be cumulated.

e - A) Tax relief (reimbursement) of the energy tax for the fuel used in CHP (natural gas) according to the Energy Tax Act. Reimbursement of the energy tax is granted only until the complete deduction of depreciation of the main components of the installation. It is paid after notification to the competent main customs office (Hauptzollamt). Application for and payment of reimbursement are made retrospectively on an annual basis. The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%. B) Tax–exemption of electricity tax for self–consumed electricity according to the Electricity Tax Act The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%. The CHP capacity is < 2 MW

f - Reduction of the renewable energies (EEG) apportionment according to the Renewable Energy Act Payment of 40% of the EEG–apportionment on the quantity of electricity for self–consumption. The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%.

According to Renewable energy heat act it is possible to use CHP systems in new building as an alternative to the mandatory share of renewable energy sources in heating.

yes, up to 5kW

yes

c - No, as CHP plants

d - The treatment for CHP plants depends only on the capacity and energy efficiency of the plant, not on the technology used.

The FC micro-CHP units have to be approved by the Federal office of economics and Export control (BAFA). The CHP plants must be new, modernised or retrofitted.

With regard to the incentives – CHP plants