Luxembourg has a problem- and it’s called energy dependency. Over the last decade they have grown tired of depending on Russian gas, which is volatile in price and comes with political strings attached. They have decided it’s time to shift away from Russian gas not only for the energy security reasons, but for economic and environmental reasons as well. Therefore, the people of Luxembourg have decided the best path forward is to shift more of their primary energy consumption to distributed generation (DG) technologies.

Luxembourg, which has limited natural resources, is almost entirely dependent on primary energy imports. Ideally, Luxembourg would like to have a more circular energy economy where it manufactures its own resources, opposed to depending on natural gas from Russia. While distributed solar has exploded in Luxembourg, quintupling in the last 5 years, the unsung hero of DG’s growth is their biogas plants. Luxembourg is innovating ways to manufacture their own gas to heat homes and generate electricity from their rich agriculture sector, instead of purchasing it via pipeline.

pic 1_Biogas Plant in Luxembourg

Biogas is produced by anaerobic digestion with anaerobic organisms which digest or ferment organic material inside a closed system to produce methane gas. This methane gas is then captured and burned for heat or electricity to produce CO2 and water vapour. Capturing cow manure and other organic wastes for energy allows communities in Luxembourg to be self-sufficient and reduce purchases of imported fossil fuels. This manure and waste, left to its own devices in the anaerobic environment like a landfill would produce methane that would escape into the atmosphere. Methane gas when it is not burned is 28-36x more potent of a greenhouse gas than carbon dioxide. By capturing and burning this methane gas, biogas production decreases Luxembourg’s environmental footprint while increasing their energy security and providing new economic opportunities for the waste and agricultural sectors.

Operators in Luxembourg generating electricity with this biogas receive a feed-in-tariff of 6.5 cents per kilowatt-hour if a facility was operational before 2012, 6.25 cents for units that went into operation before 2014, and 6 cents for units producing by January 1, 2017 over a period of 15 years. Luxembourg’s biogas and waste sectors continues to grow representing 75% of the energy produced inside Luxembourg in 2013 and about 3% of domestic renewable energy generation. Under commitments to the international community and its fellow states in the European Union, Luxembourg is committed to increase the share of renewable energy to 11% of final consumption by 2020. Biogas is expected to be a significant portion of this consumption as it’s one of the only major renewable energy opportunities in the country.

What can help communities operate these systems is having an energy investment lifecycle management (ILM) system. ILM helps to better identify risks, eliminate inefficiencies and provide project visibility. A good ILM software can automate the energy investment process to reach greater efficiency. In a tight margin business where biogas in Luxembourg will be competing against Russians not wanting to lose market share, good investment management will be key to helping the industry’s success.