Overview
Luxembourg’s ambitious National Energy and Climate Plan (NECP) places energy storage solutions at the heart of its strategy for decarbonisation and the integration of renewable energy. The plan sets out ambitious plans for grid flexibility in 2030 and recognises that Grid-scale Energy Storage will be crucial in balancing intermittent solar and wind energy.
Policy Support and National Aid Schemes
Direct Subsidies and Tax Incentives
The Luxembourg government pays direct capital grants for domestic and commercial battery installations, in funding to recover up to 30% of eligible costs under the “Eco-Energie” scheme. Companies also enjoy accelerated depreciation of energy storage units, improving project payback.
Integration into the European Green Deal
One of the EU’s “Fit for 55” package, Luxembourg coordinates its national aid schemes with broader EU energy storage facilitating measures so that they can coexist with cross-border electricity markets. The European Commission position is based on the fact that energy storage is at the center of making Europe carbon-neutral by 2050.
Key Market Participants
Encevo Group and Enovos Storage
Luxembourg’s leading utility Encevo Group has ventured into residential and commercial customer battery storage and its heat-pump product in the recent past. The group’s division Enovos Storage will offer 50 capacity packages from its Frankfurt underground site, a heightened energy storage market activity.
CREOS Living Lab Pilot
Grid operator CREOS launched its Living Lab pilot, employing cutting-edge lithium-ion battery clusters to create live use cases for grid stabilization and train best practices in monitoring systems for energy storage.
Best Practices for Successful Deployment
1. Modular, Scalable Deployments
- Employ containerized or rack-mount battery clusters to deliver incrementally higher capacity.
2. Advanced Energy Management Systems (EMS)
- Employ AI-based EMS to schedule charge/discharge against real-time pricing and renewable generation.
3. Safety and Compliance with Standards
- Implement EU Battery Directive best practices in thermal management and fire suppression for mass-market deployment.
Future Plans
Luxembourg will acquire over 200 MW of new energy storage capacity by 2030, with R&D support from the Luxembourg Institute of Science and Technology (LIST) and ICES in virtual power plant integration. The projects will enable integration of renewable energy as well as grid stabilization.