EU deal on green levy for cogeneration plants

• 7 years ago (2016-09-01)
• David Flin

Europe 1061

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Germany has resolved a dispute with the EU, enabling German firms that generate power for their own consumption to remain exempt from a green energy surcharge, according to Sigmar Gabriel, Germany’s Economy Minister. Gabriel said that the agreement covers existing plants with cogeneration systems – the Kraft-Waerme-Kopplungsanlagen (KWK) – that will continue to be exempt from the surcharge.

He said: “With the agreement, we’ve created planning security for companies.” His ministry opposed EU demands to impose the surcharge on the companies, which would have cost them $787 million annually.

Future KWK plants, however, will have to pay 40 per cent of a green energy surcharge from 2017 for newly built CHP plants under a new deal with the EU. However, Gabriel also said that the agreement states that the government would restrict subsidies to CHP plants in firms’ factories.

Germany has been discussing the disputed issue of exemptions to the country’s renewable energy levy with the European Commission for years. Germany’s chemical and steel sectors in particular are affected. Overall, about a quarter of the power consumed by energy is generated in-house.

Until now, many companies, especially those in energy-intensive industries, have been exempted from paying the green energy surcharge that has helped finance Germany’s shift away from fossil fuels towards renewable energy sources.

In 2014, the European Commission said that waivers granted to energy-intensive industry did not constitute unfair competition, but it approved an exception for power generated by industry up to 2017.