CHP Plants and Combined Heat and Power Systems in Focus
Combined heat and power (CHP) plants and decentralized cogeneration systems play a key role in Germany’s sustainable energy supply. Their contribution to the efficient use of fuels, the reduction of CO₂ emissions, and the decentralized generation of electricity and heat makes these plants indispensable to the energy transition. Engine-based systems, as well as fuel cells, offer flexible applications and strengthen security of supply while simultaneously contributing to grid stability.
Current Figures and Market Overview
According to current industry statistics, almost 50,000 decentralized engine-based CHP systems with a combined electrical capacity of more than 10 gigawatts are installed in Germany. These systems supply a significant share of industrial, commercial and municipal energy demand.
Continuous investment in new installations and the modernization of existing systems underline the growing importance of CHP technology for a secure and sustainable energy supply. The implementation of Germany’s National Data Center Strategy, which envisages doubling today's capacity by 2030, will in many locations only be feasible through on-site power generation systems. The reason is simple: new grid connections would otherwise result in delays of several years.
Technical Developments: SCR Catalysts, Efficiency Improvements and Island Mode Operation
Technological progress in the CHP sector is driven by innovations that significantly improve system efficiency, environmental performance and operational flexibility.
Particularly noteworthy are advances in exhaust gas after-treatment. Modern SCR catalysts (Selective Catalytic Reduction) enable significant reductions in nitrogen oxide emissions while meeting even the most stringent environmental requirements.
At the same time, the electrical efficiency of new CHP installations continues to increase. Electrical efficiencies exceeding 45 percent are no longer uncommon. In addition, the first fuel-cell systems with even higher efficiency levels are now entering practical use.
Another major trend is the growing capability of CHP systems to operate in island mode. Thanks to intelligent control systems and high-performance generators, modern plants can stabilize local grids independently and provide autonomous energy supplies.
This capability is increasingly being used to safeguard critical infrastructure—not only in agriculture, but also in hospitals, data centers and industrial parks. Their expanding role in grid support and security of supply further highlights the growing importance of CHP systems within the energy transition.
Political Framework: CHP Act and Coalition Agreement
Political support for CHP technology remains strong.
The German Combined Heat and Power Act (KWK Act) provides the central framework for investment in the technology and secures attractive support mechanisms for plant operators.
The current coalition agreement explicitly includes an extension of the CHP Act in order to strengthen the framework conditions for expanding decentralized energy generation and increase investment certainty.
Following the summer parliamentary recess, a new legislative proposal is expected that will further develop funding mechanisms and regulatory requirements for CHP systems.
Industry experts anticipate adjustments to support rates and increased consideration of innovative technologies such as low-emission systems and installations capable of island operation. These policy decisions will significantly influence the future development of the market.
Energy Decentral 2026: Driving the Future of Decentralized Energy Supply
EnergyDecentral 2026, taking place in Hanover in November 2026, will provide trade visitors, industry experts and stakeholders with an ideal opportunity to learn about the latest technical and regulatory developments in CHP and cogeneration technologies.
Leading manufacturers and system providers will showcase innovative solutions ranging from advanced SCR catalyst systems and high-efficiency CHP units to intelligent control systems for island operation and grid security.
Participation in EnergyDecentral offers a unique opportunity to gain first-hand insights into the latest technological innovations, regulatory developments and market trends. In addition, the political framework and anticipated legislative changes will be examined in detail through specialist forums and discussion panels.
The exhibition enables visitors to compare innovative solutions and technologies directly, exchange ideas with experts and actively shape the future challenges facing the industry.
In light of upcoming legislative changes and the growing importance of CHP systems as flexible, secure and environmentally friendly energy sources, EnergyDecentral in November 2026 is a must-attend event for anyone wishing to take part in informed discussions about the future of decentralized energy supply.
Author: Gerd Krieger, Deputy Managing Director, VDMA Power Systems