The Act on production of electricity based on renewable energy sources establishes system of certificates guaranteeing renewable origin of the electricity produced. Certificates are necessary for the administration purposes and dealings between plant’s owner and network operator and other administrative purposes.
The Act outlines method of calculating feed-in tariff (FIT) levels for renewable energy electricity. FIT levels vary depending on the renewable energy source and generation capacity of the plant. FITs are being guaranteed for a period of 15 years for all types of renewable plants (except geothermal installations) counting from the year when the plant was connected to the national grid. Biogas plants are eligible for the tariff provided that they were commissioned on or after 1st of January 2007 and that they were renewed or extended from then in order to increase their capacity.
The Act introduces additional bonus for commercialised heat generated by combined heat and power based on biomass, biogas and wood waste. Bonus is paid on top of the feed-in tariff. In order to benefit from the additional premium certain conditions must be met.
In effect, the feed-in tariff levels were increased for all technologies in comparison to tariffs offered by previous regulations. The tariffs were increased in order to speed up renewable energy deployment and help Luxembourg to meet its 2020 EU target.
Furthermore the act modifies the Regulation of 31 March 2010 concerning the compensation mechanism for renewable electricity and the regulation of 15 December 2011 concerning the remuneration and commercialization of biogas injected into the natural gas grid.