Current Status and Perspectives of RES in Latvia

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Current Status and Perspectives of RES in Latvia Institute of Physical Energetics Deputy Director Dr.phys. Gunta ŠLIHTA Vilnius, 29 January 2016

Gross Energy Consumption in Latvia, PJ, 2014 Oil products 59.652; 31% Peat 0.035 Coal 2.473 Waste 2.37 Used tires 0.364 Renewable energy sources 68.137; 35% Natural gas 45.386; 24% Electricity 16.021

Gross Energy Consumption in Latvia Renewable Energy Sources, PJ, 2014 Biogas 3.136 5% Biomass 56.02 82% Hydro 7.175 11% Bioethanol and Biodiesel 0.998 Charcoal 0.3 Wind 0.508

Gross Electricity Generation in Latvia, TWh, 2014 Hydro 2.0 38% Biomass 0.3 6% Wind 0.1 2% Other, incl.waste 0.4 7% Natural gas 2.5 47%

Gross Electricity Production from Renewable Energy Sources in Latvia, GWh, 1990-2014 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Hydroelectric plants Biomass CHP plants and power plants Wind power stations Biogas CHP plants

1.6 Installed Generation Capacity in Latvia, GW, 2010-2014 1.576 1.576 1.576 1.589 1.590 1.4 1.2 1.141 1.140 1.0 0.929 0.933 0.953 0.8 0.6 0.4 0.2 0.0 0.030 0.036 0.066 0.108 0.121 0.059 0.067 0.069 0.016 0.030 2010 2011 2012 2013 2014 Natural gas Hydro Wind Biomass

Electricity Production in Latvia, GWh, 2011-2015 1000 900 800 700 600 500 400 300 2011 IV; 893 2012 IV; 744 2013 V; 645 2011 I; 475 2012 XI; 499 2012 II; 391 2013 X; 407 2014 IV; 334 2015 IV; 404 2015 XI; 517 200 100 0 I III V VII IX XI I III V VII IX XI I III V VII IX XI I III V VII IX XI I III V VII IX XI 2011 2012 2013 2014 2015 hydro power plants combined heat and power plants wind turbines

3500 3000 3369 3194 3017 Heat Produced in Heat Plants in Latvia, TJ, 2012-2014 2500 2000 1500 1000 500 583 523 461 0 104 82 54 50 75 91 3 1 1 12 14 9 wood chips firewood wood wastes pelleted wood wood briquettes 2012 2013 2014 straw

Heat Produced in Combined Heat and Power Plants in Latvia, TJ, 2012-2014 4000 3709 3500 3000 2536 2500 2000 1500 1000 800 459 594 761 500 11 18 60 0 2012 2013 2014 wood chips wood wastes biogas

Legal Framework for RES in Latvia Law on Electricity Market (2005) - the main law which regulates the activities in the electricity market in Latvia; Energy Law (1998) - this Law regulates the energy industry as the economic sector that covers use of energy resources for the production of various types of energy, the conversion, purchase, storage, transmission, distribution, trade and use of energy; Regulations of the Cabinet of Ministers - regulates different specific energy-related issues on the basis of laws mentioned above; Law on Regulators of Public Utilities (2001) - Law that ensures the possibility of receiving continuous, safe and qualitative public utilities whose tariffs (prices) conform to economically substantiated costs, as well as to promote development and economically substantiated competition in regulated sectors, determining the procedures for the regulation of public utilities and the legal relations in the provision of public utilities; Public Utilities Commission decisions and methodologies based on Law on Regulators of Public Utilities

RES Targets for Latvia Overall target: Latvia has committed that the share of energy from RES by 2020 will account for at least 40% of national final energy consumption; Electricity: 60% of electricity demand will be covered by electricity generated from renewable energy sources; Heating and cooling: 53% of heat consumption will be covered by renewable energy sources; Transport: The share of energy produced from RES by 2020 will amount to at least 10% of final consumption of energy in transport.

42% 40% Share of Renewable Energy in Gross Final Energy Consumption in Latvia, 2004-2013 40% 38% 37.1% 36% 34% 32% 30% 28% 32.8% 34.3% 32.3% 31.1% 29.6% 29.8% 35.8% 33.5% 30.4%

Promotion the use of RES in Latvia (1) In accordance with the Law on Electricity Market (Section 29. (1)) a producer who produces electricity using renewable energy resources, may acquire the right to sell the produced electricity as the volume of electricity to be mandatorily procured; A definite part of the total consumption of the electricity final customers in Latvia shall be mandatorily covered by the electricity, which is produced by using renewable energy resources. The Cabinet of Ministers shall determine such part for each type of the renewable energy resources for a time period of five years Law on Electricity Market (Section 29. (2)); A public trader shall calculate the volume of the electricity to be mandatorily procured and the electricity produced by using renewable energy resources for each year in accordance with the part determined by the Cabinet of Ministers in the total customer consumption and publish it on the Internet home page thereof and in the official publication Latvijas Vēstnesis (the official Gazette of the Government of Latvia); The Law on Electricity Market (Section 29. 1 ): Electricity Production in the Power Plants with Installed Electric Capacity Above One Megawatt Using Biomass or Biogas producer may acquire the right to receive a guaranteed fee for the electric capacity installed in a copower plant according rules of the Cabinet of Ministers. A guaranteed fee for electric capacity installed in a power plant shall be paid by a public trader; the expenses made by payments for the installed electric capacity shall be covered by all electricity final customers of Latvia in proportion to their electricity consumption.

Mandatory Components of Procurement for Final Customers Market Participants From 1 April 2015, the approved mandatory components of procurement for final customers - 0,02679 EUR/kWh, including: the component of producers generating electricity through cogeneration 0,01671 EUR/kWh; the component of producers generating electricity with the use of renewable energy sources 0,01008 EUR/kWh.

Promotion the use of RES in Latvia (2) Net-metering started in Latvia from 1st January 2014 to promote the use of RES in the household sector: Conditions to ensure that the households can give the surplus of electricity that is produced from RES to the grid and, if necessary, to receive back the same amount of electricity; The contract for net-metering allows to give the surples of electricity to the grid only if electricity is produced from RES and a connection with a throughput value smaller than or equal to 3*16A; Energy costs only apply to the net electricity consumption, defined as the difference between electricity obtained from and fed-in to the grid; All RES-E technologies are eligible, however in practice net-metering applies mainly to photovoltaic installations; Calculation period for the net-metering is one month and the electricity can be transferred to and from the grid only within the same calendar year.

Current Situation Moratorium on the support for new renewable energy producers: Decision by the Ministry of Economics - no invitation to tender and no mandatory procurements by the year 2020; Producers of must operate under free market conditions.

Thank you for your attention! Aizkraukles 21 LV-1006, Riga, Latvia Phone: +371 67 558 680 E-mail: fei@edi.lv