The Luxembourg state supports the production of electricity from renewable energy sources by natural or legal persons by offering 3 types of remuneration:

• feed-in tariffs;
• market premiums;
• calls for tenders.

Who is concerned

Each natural or legal person is eligible to produce electricity from renewable energy sources and is entitled to ask for a remuneration in return.

The contracts are concluded with an electricity network manager, who is responsible for paying the remunerations.

Prerequisites

Feed-in tariffs

A feed-in tariff agreement has to be concluded with a network manager.

For photovoltaic energy installations with a power output between 30 and 500kW, only civil or cooperative companies are allowed to enter into such agreements.

Market premiums

Market premium agreements can only be entered into with a network manager if the production capacity is at least 500 kW, with the exception of energy from wind turbines, for which the power output must be higher than 3 MW or 3 production units.

Calls for tender

The call for tenders is only for photovoltaic installations with a power output of at least 200 kW and at most 5 MW. The current call for tenders is for a total capacity of 40 MW, divided into 5 batches.

Deadlines

Feed-in tariff or market premium agreements can be concluded throughout the year..

The bids for the current call for tender can be submitted until 16 March 2020.

How to proceed

Feed-in tariffs

Feed-in tariffs exist for:

• wind turbines, solar energy and hydroelectric installations;
• electricity produced from biogas, gas from waste water treatment installations, solid biomass and waste wood materials.

The tariffs are guaranteed for 15 years from the date of the first feed-in of electricity into the network.

The tariffs are calculated with an annual reduction (degressive rates) depending on the date of the first feed-in of electricity into the network.

There are different categories depending on the capacity of the installation.

Feed-in tariff agreements are for installations with a production capacity of less than 500 kW, with the exception of energy from wind turbines, for which the power output must be less than 3 MW or 3 production units.

Market premiums

There are market premiums for:

• energy from wind turbines and hydroelectric installations;
• electricity produced from biogas, gas from waste water treatment installations, solid biomass and waste wood materials.

The principle of market premiums only applies to installations with a production capacity equal to or higher than 500 kW, and to energy from wind turbines for which the power output must be higher than 3 MW or 3 production units.

The market premium requires that the electricity producer sells the electricity directly on the market via an intermediary who can be freely chosen.

In addition, the producer will receive a variable bonus paid by the network manager. The producer must contact the network manager who can provide a standard contract template concerning market premiums. The variable bonus fills the gap between the market price and the remuneration as provided for by the law.  

Bonuses are guaranteed for 15 years from the date of the first feed-in of electricity into the network.

Calls for tender

The Minister responsible for energy can initiate calls for tender in order to select the owners of new electricity production installations from solar energy in Luxembourg.

Calls for tender are published in the Official Journal of the European Union and in the following newspapers:

• Luxemburger Wort;
• Tageblatt;
• Journal.

The bids for the current call for tenders can be submitted until 16 March 2020. The details of the call for tenders are described in the tender specifications. The tender specifications are sent by email to any person requesting them at the following address: PV@energie.etat.lu.

The winners will receive a market premium contract for a duration of 15 years.

The legislation on the production of electricity based on renewable energy sources has foreseen the possibility to organise competitive tenders on a European level. However, such calls for tender do not yet exist.

Who to contact