EurWORK European Observatory of Working Life

LUXEMBOURG: EIRO CAR on theChanging Business Landscape in the Electricity sector and Industrial Relations in Europe

About

Country: 
Luxembourg
Author: 
Vassil Kirov
Institution: 
IRShare

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The electricity sector in Luxembourg experienced important changes during the last years. In the context of the changing European regulation and need to preserve a strong regional player, the company Enovos was established in 2009. Luxembourg depends on imports in order to satisfy its needs of electricity – local production is based mainly on hydraulic and gas stations.

1. General background information on the energy policy in your country and employment trends

Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

  • Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?
  • Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?
  • Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?
  • What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?
  • What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossile/renewable energy? Please indicate development since 2005 with reference to generation, distribution, and sale separately.

While electricity generation in Luxembourg was relatively constant until 2001, the introduction of new gas-fired capacity in 2002 contributed to a 200% increase in total electricity generation. In 2004, over 3 TWh (76% of total generation) were generated from natural gas and about 1 TWh from hydro and other renewable sources.

At present Luxembourg covers about 60% of its electricity needs by imports. However the ambition of the country in the context of growing energy needs is to reinforce its own production. Different initiatives have been developed recently in terms of windmills; biogas or hydroelectric power plants. The objective was to cover 5, 7% of the own production by RES in 2010. The Government policies envisage the increase of the RES. The State policy of the Grand Duchy of Luxembourg is developed by the Direction of the Energy (http://www.eco.public.lu/attributions/dg3/d_energie/index.html) at the Ministry of Economy. The objectives for the year 2020 are 11, 8% from renewable sources.

Since the 1st of July 2007 following the liberalisation of the electricity and gas markets in the European Union the clients in Luxembourg have the possibility to choose their provider. They could see the "mix" of energies they buy on their invoices.

The government is still an important player in the field not only through the formulation of policy priorities and targets but also through its participation in the largest enterprise in the sector, Enovos International SA, in charge of the distribution of electricity but also an important actor in the development of new production facilities through its participations (based on gas, hydraulic energy, wind, etc.).

The recent employment trend are positive – the overall employment in the sector is increasing, according to the STATEC (STATEC 2011): form 1,5 thousand in 2008 it reached 1,8 thousand in 2009 for the electricity, gas and water.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

  • Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details
  • Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.
  • Are there any other forms of support foreseen for promoting electricity generation of RES?
  • Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The development of the RES represents a priority for the government of Luxembourg. In order to achieve the objectives set, the country has developed a system of subsidies. The beneficiaries of these subsidies for the production of RES (wind, hydraulic, biomass, biogas) could be the allocated to citizens as well to NGOs, to municipalities of coalition of municipalities and to enterprises. The subsidies are detailed in a specific legislation from 2009. The intensity of the subsidy could not be more than 45% but some exceptions exist for SME. The support to RES is done also through the investment decisions of the companies where the Luxembourg government has participation.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

There are no specific studies assessing the impact of the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector.

According to the interviews held with representatives of the employers (the largest company Enovos) and the unions, the effects are positive. The establishment of Enovos and its development contributed to the development of new jobs and skills related to the RES. According to the interviewed HR director of Enovos, about 10-15 persons of the employed in Luxembourg are directly related to the RES projects. All the general services also work partly for the RE projects. The company invests also in the development of specific skills related to the RES and to attract young specialists in this domain. However this high interest could have adverse effects on the interest in jobs within the traditional energy sources subsector.

According to the trade unions, the new jobs in the RES – e.g. windmills are not particularly important. These new development have created opportunities also for some small subcontractor companies that offer, for example, maintenance services of wind mills.

The investment in the new turbine of SEO, which will be inaugurated in 2013, generates about 300 additional jobs (but not in the electricity sector itself).

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

The National Council of Energy is the consultative body that gathers all the actors in the sector of the energy and supports the Ministry in its policy implementation. Trade unions at national level are consulted (directly or through the Chamber of workers and employees - CSL), as well as employers.

There is no tripartite body about the governmental energy policy. However the social partners were involved in the discussion and negotiations about the transformations of the electricity actors and the establishment of Enovos. Those discussions took place in the years 2006 – 2008.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)

The overall employment in the sector of electricity, gas and water is about 1800 in Luxembourg. The estimation of the interviewed OGBL representative is that the employment only in the electricity sector is about 1500 persons. Half of them belong to Enovos, the other are SEO (about 200), EON (about 50), Twinerg (about 30).

Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

n.a.

     
       
       
NUCLEAR

n.a.

     
       
       
HYDRO

La Société Électrique de l'Our (SEO)

200

2011

Private status

       
       
WIND

La Société Électrique de l'Our (SEO)

140

2011

Private status

       
       
BIOMASS

Very small companies

     
       
       
PHOTO-VOLTAIC        
       
       

2.2 Please provide an overview of the current organisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

The member of the Group Enovos, Creos Luxembourg S.A. is the owner of the electricity and gas distribution network in Luxembourg. In theory all the other providers that would like could pay and use these networks. There are some small companies ensuring distribution in the municipalities of Steinfort (e.g. Steinergy – where the shareholders are the municipality and Enovos) or Rédange.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

Enovos Group (Creos)

1200 (400)

2010

Private (but few of them have still public status)

       
       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

The majority of the employment in the country is within the Enovos Group (electricity and gas distribution and participation in electricity production). Enovos Group was established at the end of 2009 after the fusion of the former state owned enterprise CEGEDEL and other minor actors in this field. In 2010 the new group acquired the services electricity and gas of the City of Luxembourg. Other important employers are SEO, Twinerg (The combined-cycle gas turbine plant) in Esch-sur-Alzette where shareholders are Electrabel, Enovos and Arcleor-Mittal, there is also enterprise producing electricity on the basis of incineration of waste, managed E.O.N (E-ON ENERGY FROM WASTE LEUDELANGE SARL).

3. Industrial relations in the electricity sector: Actors

Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

The two main unions in the sector are the trade union Services and Energy (OGBL) and LCGB There is no employer’s sectoral organisation. OBGL federations states that it was the majoritarian trade union representing about 400 members in the sector. In most of the enterprises the delegations of the personnel are dominated by OGFBL members. The data on LCGB was not obtained.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

n.a.

   
   
   
NUCLEAR      
   
   
HYDRO

SEO

 

OGBL

LCGB

   
   
WIND

SEO

 

OGBL

LCGB

   
   
BIOMASS      
   
   
PHOTO-VOLTAIC      
   
   
And in the distributing companies

Distribution GRID

companies

CREOS (Enovos Group)

Fedil

OGBL – about 200 - 250

LCGB

   
   

3.1 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

There is no nuclear and fossil electricity production in Luxembourg.

3.2 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

No, there were no major shifts.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

No

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

There is no employers’ organisation; some of the companies belong to the general employers’ organisations such as FEDIL (www.fedil.lu)

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?
  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

There are no sectoral agreements in the electricity sector. There are some CLA in Enovos, Twinerg, E.ON., SEO as well as in the Sudgas and Shell. 1135 employees are covered by the CLAs form the 1500 in total. There are also some employees working in the electricity services of large municipalities such as Dudelange. They are covered by the respective CLA of the public sector. The employees in the very small companies are not covered. In average CLA are concluded for 2 years, some are or 3 years.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

According to the interviewed OGBL representatives, some of the CLA offer better conditions – e.g. of Enovos or SEO. The difference could be explained by the heritages – e.g. Enovos is the former state owned company CGDEL, with traditions of the collective bargaining for 75 years. The economic situation of both companies has been evaluated as good. The state is also shareholder in both companies and the conditions are largely comparable to the conditions of the public servants. The other CLA – of Twinerg or EON are aligned to those in the private sector. A debate happened about the wage levels of the new entrants in the context of the crisis.

The main points in this discussion of the first CLA of Enovos were the need to preserve the social advantages of CEGEDEL but also to prepare the future in the conditions of the new group. There were even difficult moments in the negotiations and in 2010 there were demands for conciliation procedure. The CLA was concluded in 2011 but still discussions continue on some of the texts regulating its application. The old CLA of CEGEDEL was used as a basis for the new CLA of Enovos. There was a negotiation on the conditions of new entrants. They do not benefit from all the advantages but the differences are not big, they mainly concern some bonuses. But still the company is a very attractive employer.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.
  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?
  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?
  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

The cooperation is evaluated as good, especially in what concerns the establishment of Enovos where the discussions were held by the State (Ministry of economy), the company and the trade unions that protected the interest of the employees. The social dialogue was very intensive at this moment.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

According to the interviewed representatives, the current crisis has had no major impact on the sector in Luxembourg. However it reinforced the decision for the establishment of strong regional actor in the domain of the energy that started to act also on other markets. However the companies with public participation working in the sector were supposed to align the wage evolution to the wage evolution of state servants (in this case a freeze was introduced). The trade unions protected well the employees against the plans for wage decreases.

5. Commentary

The electricity sector in Luxembourg is relatively small as the country is depending on imports for its electricity needs. The current plans of the government are to increase the production of RES. A major company in the domain of distribution and investment in production processes was established recently. The sector is well covered by a collective agreement and in general conditions of employment are very good.

Vassil Kirov, IR Share