IEA encourages Luxembourg to push for a smart, sustainable energy and transport system

In a review of Luxembourg’s energy policies launched today, the International Energy Agency welcomes the progress the country has made on reinforcing security of its energy supply, integrating its gas and electricity markets at the regional level, prioritising research and development in clean energy and eco-innovation, and taking strong action on energy efficiency.

The report, Energy Policies of IEA Countries – Luxembourg 2014, notes that Luxembourg greenhouse gas emissions have stabilised as energy-intensive industries scaled back their activities and as robust energy efficiency policies were put in place, notably for buildings. However, the country has also seen an increase in road fuel sales to non-residents, which inflate Luxembourg’s emissions and its oil-stockholding needs. In this context, the IEA sees room for building on the existing surcharge imposed on road fuel sales, dubbed the “Kyoto cent”, which feeds into Luxembourg’s new Climate and Energy Fund.

Given Luxembourg’s high share of commuters and transit, the IEA encourages Luxembourg to implement planned measures aimed at increasing the number of electric vehicles on its roads and encouraging greater use of public transport. The IEA also welcomes the planned national roll-out of smart meters. If coupled with a greater deployment of electric vehicles, this would create synergies between the transport and energy systems and would be the first country-wide system among IEA countries.

“Promoting clean transport solutions can improve both sustainability and security of energy supply. But Luxembourg has the possibility to do something no IEA country has done, which is to combine smart grids and electric vehicles at country-wide level to create a smart energy and transport network,” said IEA Executive Director Maria van der Hoeven as she presented the report.

Because Luxembourg imports all of its energy needs, energy security is a priority. Luxembourg has sought to address this through regional market integration. As neighbouring countries invest in ambitious energy transition policies, regional electricity trade and electricity markets are changing. Luxembourg is set to increase its interconnections. Therefore, it is both a necessity and opportunity to support competitive electricity markets and increase co-ordination of system operation, including the pooling of regional reserves and flexibility to meet demand peaks. “Luxembourg’s pumped-storage hydro capacity is a good example of cross-border balancing. At a time of national approaches on capacity reserves, regional intra-day and balancing markets illustrate how we ensure that Europe’s energy markets are efficient and make renewable energies an integral part,” the IEA Executive Director added.

With the highest per capita income in the OECD, Luxembourg is well-placed to continue its development towards an innovative and green economy. Among its key recommendations, the IEA report calls for Luxembourg to:

• Build on the “Kyoto cent” by strengthening the Climate and Energy Fund to support domestic renewable energy, energy efficiency and other decarbonisation solutions, notably in the transport sector.
• Engage in international co-operation on technology and innovation with a view to leveraging the full potential from public energy R&D investment, notably in smart mobility and energy efficiency.
• Ensure efficient and competitive electricity and gas markets by integrating balancing and intra-day markets at regional and EU levels; in turn, this would support the efficient and cost-effective integration of renewable energies.

Energy Policies of IEA Countries – Luxembourg 2014 is available for free download, as are the following resources: 

• The executive summary.
• A factsheet.
• The  Executive Director's German-language presentation at the release of the report‌.
• The Executive Director's English-language presentation concerning the report‌.

About the IEA

The International Energy Agency is an autonomous organisation that works to ensure reliable, affordable and clean energy for its 29 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply. While this remains a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing authoritative research, statistics, analysis and recommendations.