3FOOD

Third Industrial Revolution Consulting Group
economic sense to reduce overall energy demand from 25,545 GWh in 2050 down to 16,977
GWh at that time—a one-third reduction compared to the reference case forecast. As shown in
Table 3 that follows, this implies an energy efficiency savings of 8,568 GWh, with the remaining
energy needs provided through a mix of renewable energy technologies. Equally important,
Fraunhofer included a number of sensitivity cases to determine an optimal level of renewables
that might be provided within Luxembourg. The analysis indicated that Luxembourg did have
the technical potential for an energy system in which 100 percent of the country’s demand is
generated within the nation’s borders. At the same time, however, the more cost-effective
scenario is one in which only 70 percent is locally generated and 30 percent is imported from
neighboring countries. The results are summarized in Figures 4 and 5 in the Energy section of
the Strategy Study.
Table 3. Suggested Investment Scale for the TIR Innovation Scenario in Luxembourg
Assumed
Investment
€/GWh
Total Investment
Billion €
GWh Demand
Starting Energy Demand 2050 25,545 -
Suggested Efficiency Gains by 2050 8,568 600,000 5.1
Renewable Energy Technologies by 2050 16,977 1,300,000 15.4
Total Energy-Related Capital Costs - - 20.6
Source: A thought experiment drawn from various sources as described in the text. The assumption is that only 70
percent of renewable energy generation will be deployed in Luxembourg.
But the question remains, how much investment might we imagine will be required to achieve
the energy efficiency and the renewable energy targets of the overall TIR Innovation Scenario?
Again turning to Table 3, there are two working estimates of investment per GWh that can
provide an initial calculation. The first suggests an average energy efficiency cost of
€600,000/GWh over the 35-year time horizon. If, for example, we assume a 3 percent interest
payment over a 20-year period, that would suggest an average annual cost of 4 € cents (€ct) per
kilowatt-hour (kWh). By comparison, industry now pays about 8 €ct/kWh for the electricity that
it uses, while households pay about twice that much. On the other hand, the cost of
photovoltaic energy systems—used here as a proxy for the full array of potentially available
renewable energy technologies—might be about twice that magnitude, or €1,300,000/GWh.
Following the previous logic for energy efficiency, the amortized cost might run about 9
€ct/kWh. These investment estimates are in general agreement with the published literature,
and in consultation with members on the TIR Core Consulting Team.
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