Renewable Energy in Luxembourg: What You Should Know

May 9, 2022
Renewable energy in Luxembourg

Did you know Luxembourg was among the EU countries to overachieve their 2020 renewable energy consumption target?

In January 2008, the EU committee published 20-20 by 2020 proposals regarding climate safety and energy renewability. These proposals included a 20% trimming of greenhouse gas (GHG) emissions and a 20% growth in the fraction of renewable energy sources (RES) in energy cumulatively consumed by the EU member states. 

The emergence of these proposals coincided with a period in time the policies skirting renewable energy in Luxembourg had just begun to take a more definite form. For the targets—which were non-binding, by the way—to be met, Luxembourg would have to:

  1. mitigate its GHG emissions by 20% and 
  2. expand the portion of RES in its final energy consumption from 0.9% in 2005 to 11%—10% of which must be allocated to the transport sector as a minimum. 

These expectations, as of 2008, seemed impossible to achieve. The country, however, made stellar contributions by reducing its GHG emissions by 21% in 2017 as against 2005, and in 2020, it drew 11.7% of its final energy consumption from renewables.

So Why is This a Big Deal?

To understand this, we need to revisit memory and glance through a brief but comprehensive chronicle of renewable energy in Luxembourg:

Renewable Energy in Luxembourg: How Far They've Come

1990: renewables accounted for only 0.9% of the nation's total primary energy supply (TPES).

1993: the commissioning of two photovoltaic plants of 3 kW each was authorised. This, perhaps, kickstarted the seismic shift in renewable energy progress in Luxembourg.

1997: four wind turbines of 500 kW were commissioned and connected to the country's power grid. In the same year, electricity generation from biogas commenced.

2002: the fraction of TPES generated from renewables moved from 0.9% in 1990 to 1.3%. 1.1% came from combustible renewables and waste, while the remaining 0.2% was drawn from hydro. Electricity generation peaked at 97.4 GWh from hydro, 36.2 GWh from municipal waste, 24.7 GWh from wind turbines, 9.3 GWh from biogas, and 59 MWh from solar. As a result, GHG emissions also decreased by 21% from 1990.

2008-2012: Luxembourg failed massively to reach its Kyoto target regarding reducing GHG emissions. In 2005, Luxembourg was included in the Kyoto protocols that apportioned GHG emissions reduction targets to the concerned countries. Luxembourg had received a 28% reduction relative to the 1990 levels but eventually could only average a 9% reduction within the target years.

2017: the nation experienced an astounding drop in GHG emissions by 20% relative to the 1990 levels. In the same period, its share of renewables in TPES leapt from 3.3% to 7.5%.

2020: Total GHG emissions were recorded to have dropped by 30.42% from 1990—a grand reduction of 10.42% within three years! 

What's more? The country also transcended its RES target of 11% set by the EU by realising 11.7% of its final energy consumption from renewables.

Policies Aiding the Growth of Renewable Energy in Luxembourg

Several support schemes and policies are bolstering the growth of renewable energy in Luxembourg. Most of these policies were set in place during the same period when it seemed that the 2020 targets would be unrealisable. It was then discovered these policies had influenced the positive results derived in 2020:

  1. Feed-in Tariff System: Luxembourg established this incentive to promote electricity from RES. It's a system where Grid operators pay prosumers for the excess electricity they send back to the grid in market kWh rates.
  2. Premium Tariff: In addition to feed-in tariffs, the government of Luxembourg also introduced feed-in premiums, where bonuses are given to prosumers on top of the electricity production market price.
  3. Subsidies: The introduced subsidies were subsumed into four:
  • 20% off eligible costs for solar photovoltaic (PV) stations with a capacity of less than 30kW.
  • Subsidy of up to 45% for industrial companies investing in renewable electricity generation.
  • Subsidy of up to 40% for artisanal and commercial companies investing in renewable electricity generation.
  • Fund-support that's up to 50% off for municipalities installing PV stations with a capacity lower than 30kW for environmental protection.
  1. Tender: Investors interested in new PV installations with a capacity over 500kW are called for tender, which will grant them a fifteen-year premium contract.

Other policies: To further strengthen the schemes mentioned above, the government of Luxembourg introduced several policies such as renewable building obligations and infrastructural support.

Ongoing RE Projects and Initiatives in Luxembourg

In 2021, Vianden, a hydropower project, was initiated in Luxembourg. The initiative, a 1,296MW hydro project with a 7.34 million cubic metres reservoir capacity, is located in Diekirch, Luxembourg, and is still ongoing.

The Luxembourgish government also has active training programs for installers currently going on. 

Experts' Projections

In Luxembourg, statisticians conceive that by 2030:

  • The net GHG emissions will have reduced by 50-50% against 2005 levels, consequently surpassing the target of 40% apportioned by the EU.
  • The total final energy consumption from renewables will have jumped to 23-25%.
  • This projected final energy consumption will have reached a maximum efficiency of 35.6TWh.

and that by 2050 Luxembourg will have:

  • achieved net-zero GHG emissions and
  • become 100% energy efficient from renewables.

Conclusion

As of May 2020, the average price of gasoline in Luxembourg is lower than the global average price. However, the affordability of crude oil and its derivatives poses a significant barrier to the growth of renewable energy in the country as people find this option more convenient than investing in renewables. If the Luxembourgish government revise its tax laws on the import, transaction, and use of crude oil into and within the country, the dependence may reduce.

The statistics discussed in this post show renewable energy in Luxembourg is accelerating at an incredible pace, and they point towards a possibility, if not transcendence, of the projections mentioned.

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