German government moves to rescue CHP

Ministers, trades unions, agree subsidy to protect energy efficient power stations from falling prices

The German government is to protect operators of combined heat and power (CHP) power stations from a crisis caused by falling electricity prices as the country's energy market is liberalised. Though they are significantly more efficient than conventional fossil-fuelled power stations, smaller CHP plants in particular are having a hard time competing as power prices collapse.

The increasing threat to their future has led to public protests in Berlin by trades unions and the mainly municipal operators of plants. Last month, state environment ministers meeting in Bavaria called for federal protection measures for CHP (ENDS Daily 29 October).

The CHP subsidy was agreed on Monday at an unusual high-level meeting of ministers and union representatives. The government is planning to give extra support to municipalities that produce over a quarter of their power from CHP plants. The subsidy will be limited to coal-fired plants only.

According to an official statement, government support will be worth up to euros 0.03 (DM 0.06) per kWh of electricity produced by relevant CHP plants. The subsidy will not only secure but also assist in the further development of small-scale CHP production, it continues.

However, the German district heating association told ENDS Daily that the extra money would not be enough to help develop the industry. "It is not constructive for CHP," Adi Golbach said; "only for old CHP plan which is dying, so it can die in peace." Meanwhile, the European CHP association, Cogen Europe, has welcomed the German move. The association's director Simon Minett told ENDS Daily that the subsidy could save 2-300 MW of CHP capacity.

In addition to the CHP subsidy, the government said that it might now look at introducing minimum quotas for CHP, binding on electricity utilities. Mr Golbach welcomed this idea, saying that his members had long been calling for such an approach.

Follow Up:
German government, tel: +49 30 22 44 00; Association of German district heating power stations, tel: +49 30 79 47 36 70; Cogen Europe, tel: +32 2 772 8290.

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