Energy Policy Trends in Latvia

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1 Energy Policy Trends in Latvia Jurijs Spiridonovs, Acting State Secretary of the Ministry of Economics 2015 April 9, Riga

2 Energy Union with a Forward- Looking climate change policy Goal: To give consumers secure, sustainable, competitive and affordable energy Ways to reach the goal (5 dimensions) VP Šefčovič on Energy Union: «EnU is not an inward looking project» «Establisment of the fifth freedom free flow of energy» Momentum (What should be changed?): Energy security, solidarity, trust Integrated market Energy efficiency contributing to moderation of demand Decarbonization Research, innovation, competitiveness Move away from fossil fuel driven economy Supply-based, centralized approach Old Technologies Outdated business models Empower consumers Uncoordinated national policies Market barriers Energy isolated areas 2

3 Energy Policy 2030 EU-2030 Climate and Energy Framework Latvian energy long term strategy % RES Key indictors 50% Energy import GOVERNANCE 50% RES 40% GHG 27% EE Annual heat consumption <100 kwh/m2 Energy Policy Trends in Latvia 3

4 Energy Policy 2020 Europe 2020 Climate change & energy targets 20% RES 20% EE Latvian energy targets for 2020 Energy intensity 280 ktoe/ 000Eur GHG intensity 0.80 t CO 2 ekv./ 000Eur 20% GHG 40% RES Energy savings in: primary energy consumption Mtoe, finaly energy consumption Mtoe Energy Policy Trends in Latvia 4

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6 Latvian progress in RES targets The share of energy from RES in gross final consumption of energy 40% 35% 30% 40,0% 35,8% 37,1% 32,6% 33,5% 30,4% 25% 20% 15% 10% 5% 0% Energy Policy Trends in Latvia 6

7 Latvian Energy Sector Gross energy consumption in Latvia 2013 Energy Policy Trends in Latvia 7

8 Renewable Energy Electricity large HPP with total installed capacity 1550 MW Growing share of electricity produced from biomass and biogas in CHP plants Energy Policy Trends in Latvia 8

9 Renewable Energy - Heat Hihgh share of RES in decentralised heat (58% ) Fuelwood is the main energy source in households (decentralised heat) 2013 Growing RES share in district heat (15% ; 27% ) Energy Policy Trends in Latvia 9

10 Renewable Energy - Main challenges WHERE we are? «feed-in» with the mandatory procurement & guaranteed price without guaranteed procurement - moratorium 37,1% (1501 ktoe) RES 2013 (3,1 % transport) still waiting EC s decision on Latvia s support mechanism possible changes for current support FROM WHERE the funding comes from? NEW aid EU & Climate change funds 94,1 milj. EUR ( ) State budget 184,8 milj. EUR ( ) Electricity consumers 681 milj. EUR ( ) 40% RES target Accordig to RES RP 418 ktoe are still needed in 2020 New EU state aid rules Possible NEW aid for RES producers State support energy-intensive entrepreneurs from 2016 Energy Policy Trends in Latvia 10

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12 Development of energy efficiency policy Implementation of the requirements of the EU Energy Efficiency Directive: Draft Law on Energy Efficiency (submitted to the Cabinet of Ministers) Amendments of: Energy law Law on Public procurement Electricity Market law Law on the Energy performance of Buildings More than 15 new regulations or amendments of regulations of Cabinet of Ministers in process 1 2

13 Introduction of the main requirements of Energy Efficiency Directive 2012/27/EU Requirements Mandatory final savings target accumulated (cumulative): 9897 GWH Mandatory state owned building renovation target: 3% of the area every year State purchases only energy-efficient products, buildings, services Establishing Energy Efficiency obligation scheme and fund An metering and billing: mandatory information and smart meters Mandatory energy audits for large enterprises Introduction of the Requirements Alternative measures (EE in buildings, public lighting, rolling stock modernization: financed from the state budget and EU Funds ) ; Energy Efficiency Obligation Scheme EU funding program for the renovation of public buildings 97,8 million. EUR Amendments to the Public Procurement Law (submitted Cabinet of Ministers); Amendments to the Law on Energy Performance of Buildings (submitted to Saeima) Draft Law on Energy Efficiency (draft proposal submitted to the Cabinet of Ministers) 1 3

14 Mandatory energy audits for large enterprises The results of energy audits will enable companies to identify measures to be taken in order to minimize energy consumption and thus the cost of energy; The Ministry of Economics of the Republic of Latvia has published the list of large Enterprises that are obliged to make energy audits till the 5th of December of Recommendations on mandatory audits for large companies are published online are available for all interested parties _siltumapgade/energoefektivitate/obligati_energoauditi_liela jos_uznemumos/. 1 4

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17 Projects of Common Interest Connecting Europe Facility PCIs are essential for reaching the objectives of the energy policy Efficient and well integrated infrastructure Efficient and well-functioning market 1 7

18 Infrastructure - the second PCI list (electricity) No. Project name: Project promoter: Description: Expected date of commissioning 1. The part of reinforcement for Kurzemes ring Latvian TSO The reinforcement for Latvian grid project with the new 330kV overhead line (OHL) construction and connection to the Riga node. End of Estonia-Latvia 3rd interconnection Latvian and Estonian TSO 330 kv AC OHL between Kilingi- Nõmme substation in Estonia and CHP2 substation in Latvia. End of BalticCorridor: Tartu (EE) - Valmiera (LV) Latvian and Estonian TSO Reinforcement of existing 330 kv OHL with new towers and wires BalticCorridor - Tsirgulina (EE) - Valmiera (LV) Latvian and Estonian TSO Reinforcement of existing 330 kv OHL with new towers and wires of 3x300 mm2 in phase BalticCorridor - Rīgas TEC2 (LV) - Salaspils (LV) Latvian TSO Internal reinforcement for Baltic Corridor 600 MW

19 Infrastructure - the second list of PCI (electricity) 1 9

20 Gas infrastructure projects Reconstruction and modernization of Inčukalns UGS The total costs of the first stage amount to EUR 89.7 million and it will take place from 2014 till Te second stage of modernization, scheduled for will cost EUR 45.3 million. The estimated costs of the third stage are EUR million. Objectives: To increase security of supply in the Baltic Sea region; After completion of interconnections between PL-LT and EE-FI, diversification of supply rotes and counterparts. Polish Lithuanian gas interconnection (GIPL) Objectives To integrate the isolated natural gas market of Baltic states in the EU gas market, providing access to the global LNG market. The expected costs of the project is 558 million EUR. Construction of regional LNG terminal Currently under discussion on regional level Objectives: To increase security of supply in the Baltic Sea region, to eliminate dependency from one single supplier and diversify sources. 2 0

21 Gas interconnections projects in the Baltic Sea region FI-EE interconnection Baltic Interconnector Enhancement of LT-LV interconnection PL - LT interconnection GIPL 2 1

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23 Latvia has isolated gas market «energy island» II phase Ministry of Economics is working to prepare necessary changes in legislation in order to open gas market for free competition as from April of Important step was done on 3rd of March when Government adopted the action plan report to liberalize gas market setting the road map for implementing the 3rd energy package by April 3, Necessary changes in legislation will follow this year according to agreed roadmap. 2 3

24 Thank you! Ministry of Economics of the Republic of Latvia Address: Brīvības iela 55, Rīga, LV-1519, Latvia Phone: Fax: Home page: Youtube: Facebook: