Higher Flexibility Bonus, Increased Tender Volume: Bundestag Delivers New Incentives for CHP and Biogas Industry
Mannheim, February 18, 2025
In January 2025, the Bundestag—the German parliament—passed a comprehensive biomass package offering new perspectives for biogas plant operators. The higher flexibility bonus, the adjustment of the flexibility requirements, and the greater tender volume establish key framework conditions for flexible heat and power generation. In addition, the Bundestag adopted an amendment to the CHP Act with an extended period of validity for subsidies.
Higher Flexibility Bonus for More Profitability
A central aspect of the biomass package is the increase of the flexibility bonus from €65 to €100/kW and the extension of the second remuneration period in order to promote the profitable operation of biogas plants. The original requirement for four-fold extension has been reduced to three-fold extension. In addition, the implementation period has been extended to 3.5 years. The objective is to ensure planning security for plant operators and facilitate the implementation of flexible operating modes. To reduce the burden on operators, a bagatelle limit of 350 kW has been introduced for smaller existing plants.
Greater Tender Volume for Biogas Plants
The adopted biomass package brings a significant increase in the volume of tenders for biogas plants, with 1,300 MW being planned for 2025 and 1,126 MW for 2026 (plus the unawarded volume from the biomethane tender). Biogas plants with a capacity of 326 MW are to be put out to tender in 2027 and 76 MW in 2028. This increases the tender volume to a total of 2.8 GW. These measures open up new opportunities for the expansion and modernization of existing plants and make biogas plants a key element of the renewable energy supply.
Extension of the CHP Act
The Bundestag has adopted an amendment to the CHP Act that provides for subsidization of new CHP plants even if they are only commissioned after the end of 2026. The subsidization is thus extended until December 31, 2030 in order to ensure planning and investment security for the establishment of further CHP plants. The aim is to have CHP plants replace many fossil-fuel power plants by 2030. Together with large heat grids and heat storage facilities, these are to secure the power load in the grid in the event of fluctuating availability of renewable energies.
Though the adopted measures are very beneficial for the CHP and biogas industry, further adjustments are necessary in order to ensure long-term economic viability of flexible CHP plants. Thanks to their efficiency and performance, MWM gas engines are suitable for use in CHP plants. With its custom-tailored plant concepts, MWM is already able to effectively assist plant operators in implementing flexible, profitable energy generation concepts.
