Germany is allowed to support its bioenergy and biogas sector with €7,9 billion. The European Commission has approved the plans under state aid rules. This allows Berlin to implement measures to utilize bioenergy for electricity and heat, primarily through customized tenders and increased incentives for flexibility.
The core of the package is scaling up support for sustainable electricity from biomass and biogas. The Commission considers this support necessary and appropriate to enable additional production. Germany is introducing a limit on the number of operating hours eligible for support for biogas, increasing the flexibility allowance, and focusing more on installations connected to a district heating network. This shifts production to hours of high demand, and bioenergy also contributes to climate-friendly heating in rural areas.
The next biomass tender round will be on October 1, 2025. Following Brussels' approval, the Federal Network Agency will apply the new legal basis. The total tender volume for 2025 has been increased to 1,3 gigawatts. A volume of 813 megawatts can be submitted in the October round. Bids must be submitted by October 1.
Flexibility is central to the power grid
Biogas can be stored and deployed during periods when solar and wind power are scarce. The German government is therefore increasing the flexibility incentive so that plants can more often respond to market demand. This should improve security of supply and smooth out peak demand. The sector sees this as a way to prevent the downtime of older power plants now that old regulations are expiring.
Member State support measures must be assessed to prevent disruption of the internal market. The Commission considers that the increased budget is in line with the objective of increasing renewable energy and that the chosen instruments are proportionate. Without intervention, the fleet was at risk of shrinking, as many installations no longer saw any economic prospects.
German policy directly impacts regional energy markets. Additional flexible bio-capacity just across the border can mitigate price spikes during periods of low wind. The emphasis on connecting to district heating networks is also relevant for Dutch regions seeking a source of collective heating. The decision to limit operating hours and reward flexibility aligns with discussions in the Netherlands about the smart use of bio-energy as a link in a system with abundant solar and wind power. This approach doesn't make biomass a base load, but a buffer that is used sparingly when the system demands it.
The additional budget amounts to €7,9 billion. The grid operator increased the tender volume for 2025 to 1,3 gigawatts. The available volume for the October 1st round is 813 megawatts. This provides investors and financiers with some certainty.
What's Next
With Brussels' approval, the way is clear for the package's implementation. At the same time, industry organizations are calling for further refinement and temporary bridging measures where necessary. The real test will be in practice: will flexible capacity be secured without unintended impacts on land use and biodiversity? And will the connection with heat become sufficiently attractive so that installations deliver added value beyond the electricity system alone?
Source: ec.europa.eu
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