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    EU Clears Germany, Portugal to Support Gas as Fuel



Brussels has announced that plans to support efficient German CHP plants and Portuguese cleaner buses are in line with EU state aid rules.

by: Mark Smedley

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EU Clears Germany, Portugal to Support Gas as Fuel

The European Commission said October 24 it has determined that German plans to support high-efficiency co-generation plants and Portuguese support for cleaner buses are in line with EU state aid rules. Gas is among the fuels to benefit in both instances.

Germany’s Heat and Power Cogeneration Act (KWKG 2016) provides for state aid to be paid to operators of new, modernised and highly-efficient cogeneration (CHP) plants of 1 to 50 MW, but not to any that run on coal or lignite. Payments of fixed premiums are for a limited number of operating hours only, and CHP plants receive no support when power prices are negative. 

KWKG 2016 also provides for German state aid for existing gas-fired high-efficient CHP plants used for district heating. Germany demonstrated to the EC that higher production costs and low electricity prices meant that these plants would stop operating without the limited support.

However, the EC is launching an in-depth investigation into reductions for certain users from the surcharges imposed to finance the support. The CHP-surcharge is 0.445 eurocents/kWh in 2016. KWKG provides for reductions for some energy-intensive users but the EC wants to check that the rebates are complaint with EU state aid rules. 

Separately, the EC approved a German measure to stabilise the electricity network by reducing large consumers’ power consumption as being fair under EU state aid rules. Under the measure, German network operators can enter into flexible, weekly contracts with customers for a total of 1.5 GW of capacity. This allows the network operators to remotely and at short notice reduce those customers’ demand in exchange for a fee.  

Further south, the EC approved a €60mn public support scheme for environmentally-friendly buses and related infrastructure in Portugal. Fuels eligible for support include compressed natural gas (CNG), LNG, hydrogen and electricity. Hybrid electric buses are also eligible. The Portuguese government will support 85% of the eligible costs through funding from the EU Cohesion Fund.


Mark Smedley