Germany Approves Changes to Heating Law and Power Capacity Measures

Germany Approves Changes to Heating Law and Power Capacity Measures

Germany: Germany’s cabinet has approved plans to replace the 2023 heating law that required new building heating systems to use at least 65 per cent renewable energy. Under the proposed changes, households will be allowed to continue using existing gas and oil boilers if they choose not to shift to alternatives such as heat pumps, district heating or biomass systems. The government stated that the new building modernisation law is intended to provide greater flexibility in heating system choices and support investment in construction and building renovation activities. The revised framework will also require new gas and oil systems to gradually incorporate climate-neutral fuels, increasing from 10 per cent in 2029 to 60 per cent by 2040.

The cabinet also approved plans to establish a standby power generation capacity market to support electricity supply during periods of low renewable energy output. Under the proposal, operators of power plants and storage facilities would receive payments for maintaining backup generation capacity in addition to supplying electricity. The measures form part of Germany’s wider economic reform agenda and its target to achieve climate neutrality by 2045. Industry groups stated that the changes could support investment and building refurbishment activity, while members of the Green Party criticised the move, stating that it weakens Germany’s climate objectives.

Source: Reuters