Latvia has made a historical step terminating Russian natural gas deliveries from January 1 next year, while the European Commission urged the Member States to develop natural gas saving measures. The Ministry of Economics continues to work in several priority directions in the energy sector to provide support mechanisms for the expected winter season and solutions for energy security and independence in the long term.
The government has adopted a cardinal and strategic set of measures for the further development of the energy sector in Latvia. We are working on diversification of supplies of energy sources and suppliers, at the same time offering short-term and long-term support measures for the population, businesses and local governments. I am pleased that we have adopted the most significant decisions in a timely manner making it possible to implement not only strategically significant measures in the name of energy security and independence, but also to accelerate processes for the production of renewable and alternative energy sources”, the Minister of Economics Ilze Indriksone says.
As reported above, with the Russian invasion of Ukraine on February 24 this year, the Cabinet of Ministers (CM) instructed AS “Latvenergo” to purchase 1.8-2.2 TWh of liquefied natural gas (LNG) in order to ensure the immediate security of natural gas supply. In view of the overall situation in the energy market, the CM also instructed AS “Latvenergo” to ensure the supply of 1.8-2.2 TWh of state natural gas emergency stocks from Klaipeda LNG terminal, which we expect in Q4 this year. Also, this year, the natural gas transmission system operator AS “Conexus Baltic Grid” started pumping gas into the Incukalns underground gas storage facility on February 26, although this season usually starts only on May 1.
At the same time, at the beginning of this year, the Minister of Economics signed agreements with the governments of the Republic of Estonia and the Republic of Lithuania on solidarity measures to protect the security of gas supply, confirming the willingness of the countries to cooperate operatively in the gas supply crisis situation. In addition, ME operatively started negotiations on alternative natural gas supplies, including a visit to the United States by the Minister of Economics at the beginning of April, where she met with companies representing the LNG sector.
In early April, the CM made another step to ensure energy security of the state and decided on measures to ensure the availability of emergency stocks of petroleum products to address potential disruptions in oil supplies to Latvia.
Taking into account rapid developments in the availability of natural gas prices, the Minister of Economics and ME specialists actively spoke to local governments and heating companies, calling for proactive actions and modernisation of heating systems when switching to RES, as well as for timely purchases of the energy sources needed for the next heating season, while considering the possibility of introducing energy saving measures. Similarly, ME identified energy-intensive companies in order to determine their gas consumption and availability, as well as the possibilities of using alternative energy sources.
On 19 April 2022, the CM conceptually supported the implementation of the LNG terminal construction project in Latvia and natural gas supplies from the planned Paldiski LNG terminal in Estonia. The Polish-Lithuanian gas interconnection, a significant and timely new infrastructure site, opened on May 5 this year, should be mentioned, which will provide for the diversification of gas supplies in the entire Baltic region from any country and port in Europe. On July 14 this year, the Saeima adopted a strategic decision to stop purchasing Russian gas by January 2023, while at the same time providing for the possibility that AS “Latvenergo” will take over related users – households, if necessary.
The Minister of Economics: “On Latvia’s path to energy independence and sustainability, it is important to introduce renewable and alternative energy sources as widely as possible, while reducing the consumption of natural gas to maximum self-sufficiency. At the same time, I urge undertakings to be honest and not to use this time, which is difficult for all of us, for rapid profit. In order to support the population and entrepreneurs, the Minister of Economics is already offering and will continue to offer a variety of support instruments, including the funding from the Recovery and Resilience Facility and the new programming period of the EU Structural Funds.”
In order to support local governments in switching from gas to RES fuels in heating, on March 8 this year, the CM approved the support programme and 72 applications for funding have already been received. At the same time, in support of businesses, on June 7 this year, the CM approved the Recovery Fund support programme, which will help improve the energy efficiency of companies and introduce RES.
On the other hand, from April 27 the ALTUM support programme for improving the energy efficiency of private houses or electricity generation by installing solar panels or small wind generators is available to the population from April 27. Moreover, on July 14 this year, the CM approved the Recovery Fund support programme, which will help improve the energy efficiency of multiapartment houses and introduce RES.
ME continues its work to offer the population and businesses to implement energy efficiency measures in the near future.
In order to provide support mechanisms for the forthcoming winter season, the CM approved the support measures developed by the Ministry of Welfare, in cooperation with ME, to reduce the impact of energy prices and general inflation increases on the population. Among other things, they provide four support mechanisms for the population, compensating for half of the increase in appreciation of energy sources – district heating, electricity (if used for heating), natural gas and pellets.
On July 22 this year, the joint venture of AS “Latvenergo” and AS “Latvijas valsts meži” was founded in order to implement the wind park project in the state forests by 2030. Work is also ongoing on the creation of a joint wind park of Latvia and Estonia in the Baltic Sea. Preparations are also ongoing to implement the national LNG terminal project in Latvia.
For the development of alternative energy solutions, the ME intends to develop a nuclear energy programme by the end of 2023, assessing all aspects and safety risks.
Continuing work on energy security in the long term, a series of measures are intended to be implemented to diversify energy supplies and suppliers, and, at the same time, a crisis coordination plan for emergency situations and the necessary legal and administrative frameworks for the management of national energy companies in a crisis situation are preventively developed.
Many practical decisions have been taken in the energy sector to ensure the security of energy supply, both in the next heating season and in the coming years. At the same time, the security of energy supply can also be promoted by each household and business, both by optimising energy consumption or by thinking about alternative ways of obtaining energy sources, while large consumers should take care of natural gas supply contracts in a timely manner to ensure continuity of production,” the Minister of Economics emphasises.