20090228-IEA-Energy_Policies_of_IEA_Countries_Luxembourg_2008_Review_98页_2mb

TRAINEE REPORT: ENERGY POLICY ANALYSIS OF LUXEMBOURG (IEA 2008 REVIEW)

SUMMARY

1. Policy Reforms: Since the last IEA in-depth review in 2004, Luxembourg has implemented significant reforms across all energy sectors. Key achievements include full liberalization of electricity and natural gas markets, development of renewable energy policies, and improvements in energy efficiency. The government adheres to EU regulations and revised taxes to meet climate change targets.

2. Energy Mix: In 2007, oil dominated Luxembourg’s energy supply (61% of TPES), followed by natural gas (28%) and coal (2%). Over 97% of TPES was fossil fuels, making it one of the least energy-efficient IEA members. Net energy imports accounted for 7% of TPES.

3. Electricity Market: Electricity reliance reached 57% of consumption, dominated by natural gas-powered plants. Market liberalization started in 2007, allowing customer choice, but state-owned companies still control most infrastructure.

4. Climate Change: Luxembourg aims for a 28% GHG emissions reduction by 2012 under the Kyoto Protocol. Transportation (60% of emissions) and high oil imports hinder progress. Carbon trading is used with the Kyoto Fund, but domestic policies focus on energy efficiency.

5. Energy Efficiency: Efforts include stricter building insulation since 2008 and vehicle taxes targeting low-emission cars. A National Energy Efficiency Action Plan targets a 9% reduction by 2016.

6. Oil Security Risks: Over 85% of oil stocks are external due to leasing contracts, increasing vulnerability to supply disruptions. Current storage capacity meets only 20 days of consumption.

7. Renewable Energy: The share of renewables in TPES was minimal (2.5%), and domestic production offers no GHG emission reductions. IEA recommends certificates trading.

8. Recommendations:

   • Oil Supply: Revise stockholder duties to reduce risks.
   • Electricity: Strengthen regional cooperation and grid integration.
   • Renewables: Promote investment in wind and solar power abroad.
   • Transport: Use road pricing and other incentives to reduce oil dependence.

Key Challenges: High oil dependency, insufficient domestic storage, transport emissions, and gaps in renewable energy. Luxembourg’s small size limits flexibility, requiring international co-operation to meet sustainability goals.