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Luxembourg

 

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Current Situation
Despite a wide variety of support measures for RES, Luxembourg has not made significant progress towards its targets in recent years. In some cases, this was due to limitations on eligibility and budget. However, while the electricity production from small-scale hydropower has stabilised in recent years, the contributions from onshore wind, PV, and biogas have now started to increase.

Currently, the part of RES-E in the global energy production is 3,5%. Hydroelectricity is Luxembourg’s number one source of renewable energy (22,6% of total production). This good figure is essentially due to pump-storage installations (87% of the hydroelectric production). But main Luxembourg’s strong point is its photovoltaic sector. The country still represents the highest per capita solar electricity production in the world, with 45 kWh per inhabitant.

Luxembourg is also relatively well ranked in terms of Biogas production (3rd in Europe), energy use of renewable solid municipal waste (5th in Europe), and solar thermal energy.

Wind power and biomass have also developed in Luxembourg, but at smaller proportions. They respectively produced 64 GWh and 52 GWh. Their high average annual growth rates are not very representative due to their very low production levels.

Luxembourg has two electricity transmission networks that are not interconnected, but are integrated with the power networks of neighbouring Germany and Belgium. There is a significant amount of electricity trade, and Luxembourg has generally been a major net importer. There are two main generating companies and two main retail suppliers that cover the market. There are separate Transmission System Operators (TSOs) for each network. There is no gas wholesale market, as it is supplied by foreign contracts. The distributors all have less than 100.000 customers and are thus exempt from unbundling requirements. Four of these retail suppliers account for 94% of the market.

Perspectives
Renewable energy is being promoted through investment subsidies and feed-in tariffs, some of which have taken effect in 2007 and 2008 and have been applied to biogas, wind, solar thermal, biomass boilers, sewage treatment plants and geothermal heat pumps and heat exchangers. Producers obtain a “heat premium” so as to encourage expansion of combined heat and power. Biofuels for transports are being strongly supported through legislation introduced in 2006, based on certain blending shares and reduced excise taxes. Pure vegetable oil is tax-free starting in 2007.

In spite of all this, renewables development continues to be very slow. Small size hydroelectricity installations, with make up the majority of renewable energy contributions, have been stagnating for the past few years, just like wind power, which has not counted any new installation since 2005. Only 210 kWp of photovoltaic energy were installed in 2006 and 2007. It is the biogas and renewable solid municipal waste sector that have the best market penetration. Luxembourg is going to need more vigour and force to reach its European target of 11% by the year 2020.

Key Players
The national Energy Agency (Agence de l’Energie) is an independent organization, created in 1991 by the government. Its missions are to promote a rational use of energy and to promote renewable energies in order to provide a sustainable development of energy supply in Luxembourg.

The Ministry of economic affairs is dealing with the energetical policy: international relations –electrical energy and natural gas- renewable energies and rational use of energy: information, sensitisation, promotion, relations with Energy International Agency.

The Ministry of Environment coordinates financial allowances for better energy management and use of renewable energies and is in charge of promotion of energy savings and renewable energies. La Compagnie Grand-Ducale d’Électricité du Luxembourg, as known as CEGEDEL is a concessionary company which manages transport, supplying of electrical energy in Luxembourg. La Société Electrique de l’Our (SEO), is a company which has an important role in water energy production.

Job demand
More of the employment comes from operation and maintenance, which has a higher level of skills requirements than from manufacturing and construction. Luxembourg is a net importer of renewable plant, so it misses out on the high levels of skills required in renewable technology manufacture.

The potential for renewable employment in Luxembourg is quite small. The main possible growth area is biomass and wastes. Agriculture would be the second largest possible source of employment. It will come from the development of energy crops for the biomass energy and biofuels markets.