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Luxembourg intends to achieve in full the 1.5% saving objective imposed in Article 7(1) of the Energy Efficiency Directive through an Energy Efficiency Obligation upon all Luxembourg’s electricity and gas suppliers.

Indeed, after studying its current energy efficiency policies results and concluding they would not deliver enough energy savings to comply with EED article 7, Luxembourg studied various existing EEO scheme, and chose to introduce a scheme similar to the Danish one. 

Within ENSPOL, Luxembourg’s newly adopted energy efficiency obligation (EEO) scheme has been analyzed, exploring possible hurdles related to its introduction. 

Design of Energy Efficiency Obligation scheme (EEO)

In 2014, Luxembourg has introduced an energy efficiency obligation scheme (EEO) that should contribute in full to the implementation of Article 7 of the EED.

Type of measures: Luxembourg’ EEO schememainly focuses on hard investments in energy-efficient equipment or materials for all final energy consumers (households, enterprises and public authorities), in all consuming sectors and for all types of energies, including heating oil and automotive fuels.

Obligated parties: All suppliers of electricity and natural gas serving the residential, service and industrial sector. The obligation will apply to all suppliers operating within Luxembourg regardless of size or the extent of their client base.

Target setting: In order to ensure a fair distribution of the obligation between energy suppliers, the global obligation will be shared between obligated parties depending on their market share during the previous year. 

Calculation method savings: Standard measures are defined in a catalogue. For each measure, forfeit energy savings have been defined through a deemed saving approach. The catalog also defines each measure’s lifetime. In the case of specific measures, obligated parties are required to document and justify the calculation of estimated energy savings.

Additionality: To ensure additionality, measures are only eligible if they achieve energy efficiency gains that go beyond exisiting regulations (e.g. minimum standards).

Monitoring & Verification: There will be no monitoring of the progress of obligated parties towards their annual target during the year. On March 31st of each year, obligated parties will report on the energy savings achieved during the preceding year. The Ministry will establish annually a report on the energy savings realized by obligated parties.Supporting documentation regarding the savings declared will have to be retained for 10 years by the obligated parties and produced in the event of a control/verification.

Control and Compliance: A fine is incurred by obligated parties who have not achieved their annual mandatory savings at the end of each completed year. This fine is not a payment in discharge of the obligation. Obligated parties failing to reach their annual target will have to catch up the next year…

A random annual inspection of a representative sample of the energy efficiency measures will be carried out by an independent consultancy at the request of the Ministry of the Economy. When reported energy saving measures are controlled and do not comply with the Réglement Grand Ducal, they will be suppressed from the volume declared by the obligated party.

Administrator - Institutional set up: The Ministry of Economy is in charge of the implementation of the scheme. Administrative sanctions will be pronounced by the energy regulator. My Energy will intervene as an expert on energy saving matters.

Flexibility: Exchanges or bilateral transfers of achieved energy savings are legally foreseen. Obligated parties can also count as theirs energy savings achieved by third parties. At the end of a given year, obligated parties may present a deficit less than 40% of their annual savings target. This deficit will have to be eliminated within the four following years. Obligated parties overachieving their saving target during a given year will be able to record these savings for one or several of the three following and the four previous years under certain conditions.

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