Biomass package 2025:
How to take advantage of the opportunities in the new tender design

• Tender volume to be doubled by 2028
• Increased flexibility surcharge and longer funding period
• Flexibility is a “must”: only 30% of annual hours subsidized
• Amendment of further requirements, including reduction of maize cover, switch to eligible operating quarter hours

 

The biomass package adopted at the end of January 2025 clearly focuses on making the plant portfolio more flexible for the second funding period. However, the demanding requirements in the legal text are also likely to lead to challenges in practice. You can find an overview here.

What are the most important regulations?

Changes to the funding regime

The tender volume up to 2028 was more than doubled to a total of 2,828 MW. There are already 1,300 MW for 2025 and 1,126 MW for 2026, divided equally between the two bidding dates in April and October.

The flexibility surcharge (FZ) has been increased by EUR 35/ kW to EUR 100/ kW compared to EEG 2023. For the capacity already subsidized, the FC remains at EUR 50 per kW.

The funding period in the second remuneration period has been extended to 12 years instead of the previous 10 years.

Only around 30 % of the annual hours will be subsidized in order to promote flexibilization. The EEG remuneration is only paid for the operating quarter hours of a year with the highest feed-in and no longer on the basis of the rated output.

At prices of less than 2 cents/kWh on the electricity exchange, no EEG remuneration is paid for the power fed into the grid. This regulation applies to all plants that receive an award in the new tendering design; all plants that have already received an award will no longer be remunerated from 0 cents/kWh.

Changes to the requirements

Only existing plants with a maximum remaining term of 5 years can participate in the tenders. Plants with an existing heating network (before 01.01.2024) are given preference when awarding contracts. Only 30% of the tender volume will be awarded to plants without an existing heating network. In addition, the maize cap will be reduced to 30% from 2025; a maize cap of 25% will be prescribed from 2026.

The extended requirements in the legal text are likely to pose considerable, sometimes bureaucratic, challenges in practice. Among other things, sufficient grid connection capacity, BImSch approval or dependence on suppliers for CHPs, transformers or gas storage for flexibilization must be checked. We consider the adjusted implementation period of 3.5 years after the award of the contract to be very ambitious, at least in 2025.

When does the new tendering regime apply?

The law is expected to come into force at the end of February. However, almost all regulations are still subject to state aid regulations by the EU Commission. It is therefore highly likely that the tender in April 2025 will still take place under the old subsidy regime. In this case, the BNetzA is unfortunately also likely to leave the tender volume for April at the previous level of 200 MW + the remainder from the 2024 biomethane tender.

What does this mean for my operational planning/planning for tender participation?

The new subsidy system not only offers stronger monetary incentives for flexibilization, but also an increased opportunity for a twelve-year connection operation secured by subsidies due to the increased tender volumes.

In our opinion, operators who will not be able to represent a connection operation with the higher flexibility requirements that will apply in the fall at the latest, i.e. in particular long-term operators, now have the last chance to place a bid in the tender in April 2025 in order to then only overbuild slightly more than twice.

A high oversubscription is therefore also expected in April. When determining individual bids, at least a 2-fold oversubscription should therefore be checked in order to meet the requirements for the increased flex surcharge. Bids are always made on the value to be applied, on the basis of which the sliding market premium is determined. Irrespective of this, the payment of the flexibility surcharge is a fixed payment that you can control yourself via the overbuilding of the system.

Is balancing energy still possible?

Secondary balancing power remains an attractive and sensibly combinable yield option even under the new subsidy system.

Balancing energy call-offs could, for example, be operated in such a way that the quarter hour is not counted for the subsidy. This is then not part of the 11,680 operating quarter hours with the highest feed-in if we deliberately do not use the CHP unit at full capacity for call-offs. In this way, a maximum feed-in and thus also the sliding market premium can be secured in the regular operating quarter hours. In addition, e2m’s bidding strategy secures the economic advantage through corresponding minimum energy prices.

Webinar on March 11

We are already working on adapted models for our schedule optimization in order to generate the ideal marketing revenue for you even under the new regulatory requirements. For us, flexibility is the hardest currency on the energy market and we will support you in this challenging transformation with all our expertise and experience.

In the free webinar on March 11, we will once again explain in detail how the new regulations are to be interpreted and how you as a plant operator can best prepare for them. We will also give you an outlook on how the operation of affected systems will change in the future so that we can continue to offer you a holistically optimized operating strategy for your system.

Find out more about the biomass package in our
webinar on 11.3.25.

 

Download information sheet biomass package (PDF)