Germany can move forward with 7.9-billion-euro biomass package
Clean Energy Wire
Germany can support its biomass and biogas industry with 7.9 billion euros following approval by the European Union under state aid rules. As part of its biomass package, the government plans to use the funds to support climate-friendly heating, as well as green electricity, for example by increasing state support auction volumes.
“Bioenergy has a future and an important role to play in our electricity system,” said economy minister Katherina Reiche. “Investment security is now being created for bioenergy and for around 2,500 plants in Germany.”
Biogas can be stored until it is needed for electricity production and thus can provide a backup for a system largely powered by intermittent solar and wind power. The government plans to incentivise bioenergy plants to operate more flexibly by making only a certain number of operating hours eligible for subsidies. “The flexibility surcharge is being increased, which will shift electricity generation more towards hours when there is greater demand in the system,” the economy ministry wrote.
Germany plans to use the subsidies in the next round of tenders on 1 October already, it added. The network agency BNetzA increased the tender volume to 1.3 gigawatts (GW) for the full year 2025, which means bids for a volume of 813 megawatts (MW) can now be submitted in the upcoming tender.
“In the future, these power plants will not only contribute to security of supply in the electricity sector, but they will also support climate-friendly heat supply in rural areas and thus make an important contribution to the heat transition,” said Sandra Rostek, head of the Capital Office for Bioenergy (HBB).
While bioenergy has played a key role in Germany's energy transition to date, expansion runs into limits, such as high land use requirements for the plants, the risk of monocultures and negative effects on nature and biodiversity.
The EU must approve financial support measures from individual member states to deal with market distortion risks. The European Commission found that the increased support was necessary and appropriate to increase electricity production from biomass. Germany had proposed changes to its biomass support at the start of the year. The industry had previously warned the country’s fleet was at risk of shrinking, as support for older plants nears its end and many operators lack a perspective for economically viable operations.
