Coopératives d'énergie citoyennes: accelerating the energy transition in Luxembourg!

Citizen energy cooperatives in Luxembourg: local, democratic initiatives to promote the energy transition

Growing dynamism of Luxembourg's citizen energy cooperatives, but still limited capacity

From 2012 and the first energy cooperative in Luxembourg, Enercoop, the expansion of this energy production model has been crescendo. Citizen energy had already experienced a revival at the turn of the 2000s among our European neighbors, led by Germany, where 46% of generation capacity was owned by citizens (including farmers) in 2012. This form of production is not new: around 1930, there were 6,000 electricity cooperatives in Germany.. In Luxembourg, this aspect is covered by civil companies. in the first instance, usually on projects involving local communities and residents, then came the cooperatives.

The main difference in status between the two is that cooperatives have a variable capital and members can join at any time which is ideal for a company whose vocation is to develop several projects over the years and to gather news-water cooperators. Note that there are also farmer-owned energy production cooperatives that do not fall into the citizen energy category.

Cooperative facilities

The production capacity of cooperatives is growing steadily and is now equivalent to the capacity of an onshore wind turbine.

We are witnessing a growing and continuous investment, which nevertheless does not yet allow us to reach a consistent order of magnitude on a national scale. It is estimated that 1% of electricity is produced in Luxembourg by citizen energy cooperatives. There's still a long way to go, despite the relevance of promoting and expanding this citizen-based form of production. The benefits are manifold.

Citizen energy cooperatives: multidimensional assets

Economic dimension The reserve of public savings available for investment in the energy transition is estimated at 240 billion euros by 2030 in Europe. The latest report from the IEA (International Energy Agency) on investment in renewable energies shows an increase in household investment in renewable energies. energy investments from 9% in 2015 to 18% in 2023. To this end, the European directive promoting self-consumption and energy communities aims to encourage citizens to become producers of energy and consume it directly, either individually or as part of a community (see box below). Depending on the market price, the electricity produced can be used to generate savings for cooperative members, either through self-consumption or through an affiliated energy distributor. The cooperative South wind in the province of Luxembourg (Belgium) attracted many cooperators when electricity prices came under pressure in 2022-2023, as it enabled them to make substantial savings by contracting with a cooperative distributor. Cooperatives offer a return to their members (between 1 and 5%), even if this lucrative aspect is not the cooperative's raison d'être. A final advantage concerns the local economic spin-offs generated by citizen investment in Luxembourg.

What's the difference between a cooperative and an energy community?

You may have heard of energy communities recently, which are a different concept from the cooperative - but still compatible. Cooperatives are companies with variable capital. which lends itself to the production of community energy, but also to other activities (Raiffeisen, Vin Moselle and Luxlait are cooperatives). The energy community is a principle of energy sharing in the form of a "collective of energy consumers and/or producers, legally organized as a single entity".. A legal status (association, cooperative, etc.) is required to organize the sharing of energy produced by this group of consumers. Find out more on the Klima Agency.
This recently promoted model follows the European directive promoting self-consumption and energy communities. Its aim is to encourage citizens to become energy producers and consumers. Depending on the physical distance of the members of your energy community, you may or may not pay grid usage charges. In the event of rising electricity market prices and energy supply tensions, as has been the case in recent years, self-consumed energy is not tied to this market price, and can generate substantial savings for households.

Cooperative financing enabling everyone to invest in the energy transition

You become a cooperator by purchasing when launching a new project one or more shares in the cooperative (between 50 and 500 euros, depending on the cooperative). This gives the right to vote at the Annual General Meeting, access to remuneration through the distribution of dividends, and the opportunity to play a more active role as a member of the Executive Committee. The executive committee, comprising up to ten people, is responsible for the development and management of the cooperative.

Cooperative financing schemes :

Financing scheme 1 is the simplest. Other, more complex schemes are available, involving banks (scheme 2) or loans to cooperative members. They respond to the particularities and opportunities of each cooperative.

The challenge of the subsidy mechanism Cooperatives face a number of challenges. Firstly, the feed-in tariff (FIT) financing model used by the majority of cooperatives has a negative impact on their operations. principle of degressivity (the feed-in tariff decreases each year), which is now causing tension. The government's scheme ensures that electricity produced is bought back at a fixed rate over a 15-year period, providing the stability and visibility essential for public investment. The spirit of the regulation was to take into account the degressive cost of equipment. The cost of equipment has indeed fallen, but at the same time, the rising costs of installation companies have prevented a significant overall reduction in the cost of photovoltaic installations. Today, the feed-in tariff is between €0.1182 and €0.1019 / kWh, depending on the size of the installation, which is barely viable for some of the projects, with cooperatives facing higher costs than private individuals (trustee costs in particular), even if the feed-in tariff is boosted by around +10% for cooperatives. And yet, we know that the support mechanisms in place enable the development of private renewable energy projects. The Chambre des Métiers noted the correlation between the collapse of the market for installations over 30kWp and the withdrawal of their subsidies in 2013.

The need for a favorable institutional and funding framework, which remains to be improved despite broad support from the Luxembourg political spectrum and European directives.

To meet these challenges, the cooperative model of energy production needs a favorable institutional framework. This has a structuring impact on the development of citizen-based renewable energies. In many of the countries studied, the abolition of support policies has led to a decline in citizen projects (or at least a slowdown). For example, Denmark had 900 energy cooperatives and lost 88% as a result of weakened institutional support. We also saw above the negative effect in Luxembourg of the removal of certain subsidies in 2013. The upward momentum must therefore be supported by a favourable incentive frameworkto support the energy transition through public savings. Without this, Luxembourg would be depriving itself of a high-potential lever, mortgaging opportunities for low-carbon energy. Energy that would contribute to the country's resource sovereignty, with local economic spin-offs, a more controlled energy price and the opportunity for everyone to invest in the transition.. Here are just a few examples: guaranteed feed-in tariffs, provision of state-owned roofs, opening up a share of wind energy projects to citizens (as has been decided in Wallonia), grid operators assuming the costs of grid connection, accelerated grid connection times, or the development of a national citizen energy strategy. For a more exhaustive list of possible measures, see the work of Rescoop (European Federation of Citizen Energy Cooperatives).

In conclusion

To conclude, citizen energy cooperatives are gaining momentumThey provide concrete answers to ecological and social challenges. Their desire to grow means adapting to new challenges currentThis will require the support of the legal and financial framework, without which it will not be possible to meet the challenges of the future. This will not happen without support for the legal and financing framework, without which Luxembourg would be depriving itself of an opportunity to combine ecology, economy, sovereignty, social justice, citizen participation and resilience.

Want to find out more? Want to get started?

• Discover the cooperative portraits on bibe.cell.lu by selecting "Climate and energy" projects - Consult the interactive map of cooperatives and their facilities here: Eurosolar interactive map
• Three interviews with cooperative players:

1. Abbes Kalmes - President of TMEnercoop : youtube.com/watch?v=hf-KcuUWekY
2. Michèle Biel - Energiekooperativ Kanton Grevenmacher : youtube.com/watch?v=U8RufF1x06g
3. Olivier Martin - Energiepark : youtube.com/watch?v=jJldAi-nsBQ

• Watch the film Eng Äerd (engaerd.lu) where the TM Enercoop cooperative (Esch-sur-Alzette) is presented - to become a cooperator, contact your nearest local cooperative or ask about the launch of a new cooperative installation.

• Wierling August, Valeria Jana Schwanitz, Jan Pedro Zeiß, Celine Bout, Chiara Candelise, Winston Gilcrease and Jay Sterling Gregg, Statistical Evidence on the Role of Energy Cooperatives for the Energy Transition in European Countries, 2018