Combined Heat and Power Act (KWKG).

The present Act establishes Germany’s legal framework for promoting electricity generation through combined heat and power (CHP) technology, which simultaneously produces electricity and useful heat to increase energy efficiency. The law aims to preserve existing CHP capacity, encourage the modernization and construction of new high-efficiency plants, and support the expansion of heat networks and storage systems as part of the energy transition. It provides financial incentives, such as bonus payments for electricity generated in CHP plants and funding for innovative CHP systems, while setting rules for grid connection, electricity marketing, and eligibility conditions for new, modernized, or retrofitted installations. Through these mechanisms, the Act seeks to reduce greenhouse-gas emissions, improve fuel efficiency, and strengthen reliable electricity and heat supply within Germany’s evolving renewable-based energy system.