3FOOD

Third Industrial Revolution Consulting Group
We have organized our discussion of these priority areas in the following sections:
Market Design and Regulatory Framework (action #4)
New Business Models and Financial Schemes (actions #2 and #3)
Experimental Distribution Grid Clusters (action #5)
Market Design and Regulatory Framework
The TIR vision for the Luxembourg energy sector recognizes the importance of distributed and
democratized resources, services, and processes. This concept largely depends on creating and
enhancing networks and reducing regulatory barriers that interfere with innovation.
The energy market landscape has shifted considerably over the past decade. The changing
environment within the electricity market is being influenced by a number of key factors: the
changing consumer; evolving technology; entry of new players; and the provision of new
product and service offerings. Customers are reducing energy use and switching to new energy
efficient appliances to avoid the increase in electricity prices. Households are installing solar
rooftop and community-based PV systems, and energy intensity from Luxembourg’s
commercial and industrial sectors has declined due to recent energy efficiency measures.
To prepare for the future, energy markets and regulations will need to become more agile to
accommodate new players and the changing roles of existing players. The future energy system
will require increased energy visibility to allow for informed choices and assessment of energy
management capabilities (e.g., benchmarking, feedback systems). The future system will also
require new physical networks and linkages to allow for grid flexibility and emerging concepts,
such as transactive energy. 41
Luxembourg will need to strike a reasonable balance of adaptability and reliability within its
energy sector governance and regulatory frameworks. This will be especially important during
the next few decades, as demonstration projects begin to provide the evidence needed to
inform policy at the scale envisioned for the TIR.
Below we summarize our interrelated, high-priority proposals supporting market design and
regulatory frameworks:
USEF: One common standard to enhance value creation
41 Transactive energy refers to techniques for managing the generation, consumption, or flow of electric power
within an electric power system, through the use of economic or market-based constructs, while considering grid
reliability constraints. GridWise Architecture Council, http://www.gridwiseac.org/about/transactive_energy.aspx.
40