Energy production

Total electricity generation from RES in the 2010 amounted to 3635 GWh, in the 2011 – 3078 GWh and in the 2012 – 4109 GWh.

To maintain Latvian competitiveness, a year ago Latvia agreed on the long term strategy for energy until 2030 – a competitive energy for society, focusing also on sustainable energy - promoting effective renewable energy sources technologies, promoting energy efficiency measures, heading towards achievement of the EU sustainability targets.

The main target of the Strategy is to promote competitive economy by creating balanced, effective, economically, socially and environmentally justified and market-based energy policy.
 

According to Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC on renewable energy Latvia has got one of the highest individual targets for the share of renewable energy by 2020, namely 40% from total gross final energy consumption. The share of renewable energy sources has traditionally been significant in Latvia’s energy supply and in 2010 it comprised 32.5%, in 2011 it comprised 33.5% and in 2012 it comprised 35.8% of the total gross final energy consumption. The share of renewable energy in the transport sector must reach at least 10% by 2020 of gross final energy consumption for transport (in 2010 it comprised 3.3%, in 2011 – 3.2%, in 2012 – 3.1%).
 

Additional information about Latvia RES policy can find in information report "Republic of Latvia National Renewable Energy Action Plan for implementing Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC by 2020", which can find in European Commission homepage: (http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm).
 

 Total share of electricity generated from RES in Latvian gross electricity consumption (%)

Source: Central Statistical Bureau of Latvia

The favourable national feed-in support scheme for renewable electricity in the Republic of Latvia until 2011 year provided a guaranteed purchase price that was significantly higher than the electricity market price. The public trader (from 01.04.2014. AS „Energijas publiskais tirgotajs”) purchase electricity from merchants, which have been granted the right to sell electricity produced from renewable energy resources within the scope of mandatory procurement for electricity prices which have been determined in accordance with the price formulas in Cabinet Regulations mentioned below. The mandatory procurement of electricity is compensated by electricity end-users’ payments.
 

Cabinet Regulation No 221 of 10 March 2009 „Regulations regarding electricity production and price determination upon production of electricity in cogeneration” (hereinafter – Cabinet Regulation No 221) prescribes the criteria for qualification of cogeneration units for them to acquire the right to sell the produced electricity within the framework of the mandatory procurement or to receive guaranteed payment for the electric capacity installed in a cogeneration unit.  
 

Cabinet Regulation No 262 of 16 March 2010 „Regulations regarding the production of electricity using renewable energy resources and the procedures for the determination of the price” (hereinafter – Cabinet Regulation No 262) prescribes conditions for acquiring rights to sell electricity generated from renewable energy sources (sun, wind, etc.) within the framework of mandatory procurement.
 

Support level for the production of electricity from renewable energy sources and high efficiency cogeneration depends on the type of energy source used, the installed capacity of the plant, number of working hours as well as natural gas sales price. Contrary to the forecasts in recent year’s natural gas prices have rapidly risen, contributing to the substantial growth of support intensity and respectively to the increase of number of supported electricity producers. Thus, support paid to the producers within the framework of mandatory procurement, which raises the overall electricity price, has also significantly increased.  The analysis carried out by the Ministry of Economic revealed that volume of the mandatory procurement of electricity will continue to grow without changes in the historically applied support scheme.
 

Since availability of energy resources and their prices have always been one of the determinant factors of national and regional economic competitiveness Latvia as well as some other European Union countries by January 1, 2016 has suspended the granting the right to sell the produced electricity as the volume of electricity to be mandatorily procured and the right to receive a guaranteed fee for the electric capacity installed in a power plant.
 

Currently the support scheme is being revised to provide a stable, transparent and predictable investment environment for renewable energy and other industries, as well as reduce the burden of mandatory procurement on the Latvian electricity consumers. The purpose of the activity is to ensure the further development of competitiveness of the economy and prevent the deterioration of living standards. More clarity and predictability of the planned support scheme for subsidized energy production will give investors a clear long-term vision.

Investment support for renewable energy sources has been also commenced utilizing Cohesion Fund resources and the Climate change financial instrument (hereinafter – CCFI) established by the Law on the Participation of the Republic of Latvia in the Kyoto Protocol Flexible Mechanisms.
 

CCFI is a Government budget program of the Republic of Latvia. Aim of CCFI is to prevent global climate change, adaptation to the effects of climate change and contribute the reduction of greenhouse gas emissions (for example, implementing activities to improve the energy performance of buildings in both public and private sectors, the development and implementation of technologies that use renewable energy resources, as well as the implementation of the integrated solutions to reduce greenhouse gas emissions). Information about the tenders funded by CCFI, as well as the application, review, approval and funding procedures are found in the Ministry of Environmental Protection and Regional Development homepage: (http://www.varam.gov.lv/eng). Further information about CCFI is available at the website of Latvian Environmental Investment Fund: (http://www.lvif.gov.lv/).