3FOOD
TIR-CG_Luxembourg-Final-Report_Long-Version TIR-CG_Luxembourg-Final-Report_Long-Version
Third Industrial Revolution Consulting Group With the recent signing of the COP-21 Paris Agreement on climate change, the green bond market can be seen as entering into a new stage where policy drives market growth. This is in contrast to a) the first stage of the green bond market (roughly 2007-2011) where, especially multilateral development banks assured market growth and b) the second stage of the market (roughly 2011-2014) where investors and intermediaries became primary drivers of market evolution. The market is growing rapidly: the London-based Climate Bonds Initiative, for instance, catalogued a $41.8 billion market in 2015 while issuance was already at $23.2 billion (as of May 2016) and expected to reach $100 billion by the end of the year. 251 1.2.3.3 Luxembourg ESCO Market The ESCO market in Luxembourg will require further refinement. The 2014 Joint Research Centre (JRC) study on the European ESCO market, for instance, notes that “information about the [ESCO] market or the companies working in Luxembourg is difficult to find. The ESCO market is not active, and the latest reliable information is from 2007, when 3-4 foreign companies were found to offer energy service solutions for Luxembourg”. 252 While data is scarce, the Third National Energy Efficiency Action Plan (NEEAP) outlines that the ESCO market in Luxembourg is experiencing growth and sees the potential to develop the energy services market as ‘high’. The document also notes that pilot energy saving contract projects are underway. Overall, however, it appears that further development of the energy services market, in particular the development of ESCOs capable of participating in an SEF program at the proposed scale might be required. To overcome such potential obstacles, the Grand Duchy of Luxembourg will need to incentivize the creation of ESCOs, certify proper training and performance, guarantee early adoption with the transformation of all government and public buildings into Internet of Things nodes, and provide government-supported training for thousands of semi-skilled, skilled, and professional workers that will be needed to transform the Luxembourg building and other asset stock. Under the vision outlined here, the LSDFP is the one-stop-destination for financial contributors and project promoters alike. The LSDFP is an innovative public-private partnership delivering energy efficiency, load reduction, clean energy services, material savings, transportation investment, digitalized monitoring and verification and a range of other technologies and collective action strategy, the market will be reliant on further efforts to maintain current standards. Support policies could be formulated at the EU level to advance the market. 251 https://www.climatebonds.net/ 252 Bertoldi, P., Boza-Kiss, B., Panev, S., & Labanca, N. (2014). European ESCO Market Report 2013. Joint Research Centre Science and Policy Reports. Publication by the European Commission. 284
Third Industrial Revolution Consulting Group options. The creation of a LSDFP fits with the larger policy context and direction. For instance, the Third NEEAP is considering the creation of a public financial institution to facilitate investment in energy efficiency and renewable energy. 1.3 Establishing a Resource Aggregation Capacity While the Luxembourg Sustainable Energy Finance (LuxSEF) model provides a useful aggregation of demand-side projects (whether energy-efficiency upgrades or rooftop photovoltaic systems), there are other complementary institutional arrangements that the LSDFP may want to consider to drive greater investments in renewable energy and energy efficiency upgrades at an equivalent national or community scale. One such model is a complement of energy cooperatives, referred to as Community Choice Aggregation (CCA). CCA is a vehicle that enables community governments to aggregate or pool energy customers to purchase and develop energy resources, as well as to administer energy programs, on behalf of their residents and businesses. This institutional arrangement allows the local community to shape the CCA program to prioritize desired benefits, including but not limited to, increased investment in renewable energy sources and energy efficiency, economic development, carbon reduction strategies, and workforce development efforts. 253 Like energy cooperatives, CCAs have the authority to buy and/or develop energy resources on behalf of the residential, commercial, and government energy customers within its jurisdiction. Whether heat or electricity, the energy continues to be distributed and delivered over existing pipelines, electricity lines, and other infrastructure that is owned by a private company or investor-owned utility. By establishing a CCA program, cities and cantons can take increased ownership and control over their electricity generation and consumption. More than just buying and selling electricity, a CCA provides a platform for managing the community’s energy resources through the administration of energy efficiency programs, as well as the through the development of local renewables. Indeed, some local communities have been motivated to form community choice programs as a means to achieve greater levels of renewable energy generation, encourage local investment in energy resource development, reduce greenhouse gas emissions, amplify the 253 With origins in the State of California, CCA is statutorily enabled in California, Illinois, Ohio, Massachusetts, New Jersey, New York, and Rhode Island with a handful of other states considering legislation. For more background on the idea of a Community Choice Aggregation model as it might be applied in the Netherlands or the region, see the resources of Local Energy Aggregation Network (LEAN Energy US) at http://www.leanenergyus.org/. For a quick review of energy cooperatives in Europe, see the Navigant report cited in footnote 1 of this overview. 285
- Page 233 and 234: Third Industrial Revolution Consult
- Page 235 and 236: Third Industrial Revolution Consult
- Page 237 and 238: Third Industrial Revolution Consult
- Page 239 and 240: Third Industrial Revolution Consult
- Page 241 and 242: Third Industrial Revolution Consult
- Page 243 and 244: Third Industrial Revolution Consult
- Page 245 and 246: Third Industrial Revolution Consult
- Page 247 and 248: Third Industrial Revolution Consult
- Page 249 and 250: Third Industrial Revolution Consult
- Page 251 and 252: Third Industrial Revolution Consult
- Page 253 and 254: Third Industrial Revolution Consult
- Page 255 and 256: Third Industrial Revolution Consult
- Page 257 and 258: Third Industrial Revolution Consult
- Page 259 and 260: Third Industrial Revolution Consult
- Page 261 and 262: Third Industrial Revolution Consult
- Page 263 and 264: Third Industrial Revolution Consult
- Page 265 and 266: Third Industrial Revolution Consult
- Page 267 and 268: Third Industrial Revolution Consult
- Page 269 and 270: Third Industrial Revolution Consult
- Page 271 and 272: Third Industrial Revolution Consult
- Page 273 and 274: Capacity (GWp) Third Industrial Rev
- Page 275 and 276: Third Industrial Revolution Consult
- Page 277 and 278: Third Industrial Revolution Consult
- Page 279 and 280: Third Industrial Revolution Consult
- Page 281 and 282: Third Industrial Revolution Consult
- Page 283: Third Industrial Revolution Consult
- Page 287 and 288: Third Industrial Revolution Consult
- Page 289 and 290: Third Industrial Revolution Consult
- Page 291 and 292: Third Industrial Revolution Consult
- Page 293 and 294: Third Industrial Revolution Consult
- Page 295 and 296: Third Industrial Revolution Consult
- Page 297 and 298: Third Industrial Revolution Consult
- Page 299 and 300: Third Industrial Revolution Consult
- Page 301 and 302: Third Industrial Revolution Consult
- Page 303 and 304: Third Industrial Revolution Consult
- Page 305 and 306: Third Industrial Revolution Consult
- Page 307 and 308: Third Industrial Revolution Consult
- Page 309 and 310: Third Industrial Revolution Consult
- Page 311 and 312: Third Industrial Revolution Consult
- Page 313 and 314: Third Industrial Revolution Consult
- Page 315 and 316: Third Industrial Revolution Consult
- Page 317 and 318: Third Industrial Revolution Consult
- Page 319 and 320: Third Industrial Revolution Consult
- Page 321 and 322: Third Industrial Revolution Consult
- Page 323 and 324: Third Industrial Revolution Consult
- Page 325 and 326: Third Industrial Revolution Consult
- Page 327 and 328: Third Industrial Revolution Consult
- Page 329 and 330: Third Industrial Revolution Consult
- Page 331 and 332: Third Industrial Revolution Consult
- Page 333 and 334: Third Industrial Revolution Consult
Third Industrial Revolution Consulting Group<br />
options. The creation of a LSDFP fits with the larger policy context and direction. For instance,<br />
the Third NEEAP is considering the creation of a public financial institution to facilitate<br />
investment in energy efficiency and renewable energy.<br />
1.3 Establishing a Resource Aggregation Capacity<br />
While the Luxembourg Sustainable Energy Finance (LuxSEF) model provides a useful<br />
aggregation of demand-side projects (whether energy-efficiency upgrades or rooftop<br />
photovoltaic systems), there are other complementary institutional arrangements that the<br />
LSDFP may want to consider to drive greater investments in renewable energy and energy<br />
efficiency upgrades at an equivalent national or community scale. One such model is a<br />
complement of energy cooperatives, referred to as Community Choice Aggregation (CCA). CCA<br />
is a vehicle that enables community governments to aggregate or pool energy customers to<br />
purchase and develop energy resources, as well as to administer energy programs, on behalf of<br />
their residents and businesses. This institutional arrangement allows the local community to<br />
shape the CCA program to prioritize desired benefits, including but not limited to, increased<br />
investment in renewable energy sources and energy efficiency, economic development, carbon<br />
reduction strategies, and workforce development efforts. 253<br />
Like energy cooperatives, CCAs have the authority to buy and/or develop energy resources on<br />
behalf of the residential, commercial, and government energy customers within its jurisdiction.<br />
Whether heat or electricity, the energy continues to be distributed and delivered over existing<br />
pipelines, electricity lines, and other infrastructure that is owned by a private company or<br />
investor-owned utility.<br />
By establishing a CCA program, cities and cantons can take increased ownership and control<br />
over their electricity generation and consumption. More than just buying and selling electricity,<br />
a CCA provides a platform for managing the community’s energy resources through the<br />
administration of energy efficiency programs, as well as the through the development of local<br />
renewables. Indeed, some local communities have been motivated to form community choice<br />
programs as a means to achieve greater levels of renewable energy generation, encourage local<br />
investment in energy resource development, reduce greenhouse gas emissions, amplify the<br />
253 With origins in the State of California, CCA is statutorily enabled in California, Illinois, Ohio, Massachusetts, New<br />
Jersey, New York, and Rhode Island with a handful of other states considering legislation. For more background on<br />
the idea of a Community Choice Aggregation model as it might be applied in the Netherlands or the region, see the<br />
resources of Local Energy Aggregation Network (LEAN Energy US) at http://www.leanenergyus.org/. For a quick<br />
review of energy cooperatives in Europe, see the Navigant report cited in footnote 1 of this overview.<br />
285