How deep is the focus on sustainable energy systems and reduction of fossil fuels in the mid-term development planning of Latvia? The draft National Development Plan 2021 – 2027 is published for public consultation and has been prepared in parallel with the National Energy and Climate Plan 2021 – 2027. While less specific in assessing the impacts of energy and climate policies on a European scale, the National Development Plan ascertains that energy transformation will have a solid place in Latvia’s governance and lists it among the budgetary priorities after 2021. However, the plan mainly considers energy as a part of environment and technology, leaving its commercial and industrial drivers largely intact.

The longstanding economic dependence on fossil fuels [will be] decreased and the share of renewable energy sources [will be] higher.

NDP’s vision of Latvia in 2027

Relevance

The National Development Plan (NDP) is the main mid-term planning document in Latvia. It is a strategic document where overarching development priorities and areas of public investment are identified and designated on a national level. The NDP will have a strong link with programming of funding allocated for Latvia in the next multiannual financial framework of the European Union.

The contents of the NDP build on and aim at integrating the sectoral policies. The draft National Energy and Climate Plan has been an important source for building the NDP’s vision.

Process

Latvia’s NDP is prepared by the Cross-Sectoral Coordination Centre (CSCC) – the leading development planning authority. The number of meetings and discussions dedicated to the subject has been large. The result is a multi-vocal but also a fragmented perspective on Latvia. Although many actors were involved, the ministries had the decisive role in setting the priorities included in the NDP.

In summer 2019, several thematic expert groups met for ~ 10 times.
The head of the CSCC moderated the discussions and two consultants updated the draft on a regular basis.
In addition to these meetings, separate discussion with politicians, social partners and scientific advisors took place.

Expert group meeting in the library of the Cabinet of Ministers. June 2019. Photo: K. Petersone

Structure

The text of the draft NDP is 120 pages long and it begins with a vision of Latvia in 2027 coined in 4 dimensions:

Equal rightsQuality of lifeKnowledge societyResponsible Latvia

The meaning of the latter dimension is “responding to the threats of climate and demographic trends in near and distant future”.

Whereas the vision highlights the presence of climate change concerns in all development processes, the strategic goals of the NDP are succinct and predominantly economical and social, thus missing a clear environmental component.

The three pillars of Latvia’s development will be:

Equal opportunities

Social trust

Productivity and income

The NDP is further divided in 6 priority areas:

Strong families, healthy and active people

Knowledge and skills for personal and national growth

Competitiveness of enterprises and material welfare

Qualitative living environment and spatial development

Culture and sports for active and fulfilled life

United, secured and open society

The priority area “Qualitative living environment and spatial development” has 4 directions of action:

Nature and environment
Technological environment and services
Balanced regional development
Housing

The branching logic of the NDP puts the area of environment and spatial development in the strategic goal of “productivity and income”.

Energy

While acknowledging that costs of energy are crucial for industry and manufacture, NDP’s priority area “Competitiveness of enterprises and material welfare” does not comment on the energy policy directly. Only “smart energy solutions” are listed among the activities for productivity and income. “Latvia works smarter, not more” – states the passage in the vision of “knowledge society” in the NDP.

The NDP considers all spheres of environment in a close connection to living conditions, technology, welfare and regional development. Thus “accessible energy as a precondition for competitiveness in production” has found place in the objective of the priority area “Qualitative living environment and spatial development”.

In the same line, the NDP puts low-carbon and climate-resilient development and meeting Latvia’s energy and climate targets in the goal statement for “Nature and environment”.

Improvements in energy efficiency and replacement of fossil fuels, enabled by deployment of  local and renewable resources, will lessen the national dependence on fossil fuel imports and increase the energy security.


Meanwhile we must consider that decarbonization of economy is possible in keeping up with the qualitative and cost-efficient discoveries of low-carbon technological solutions accessible in the global market. The need to achieve climate-resilience supported and recognized by society is the beginning of a purposeful movement towards decarbonizing economy and change in consumption habits.

Excerpt from the goal statement in the NDP

Incidator of Latvia’s GHG emissions intensity:

2017 – 495.98 kt CO2 eq / GDP
2024 – 396.79
kt CO2 eq / GDP
2027 – 347.19
kt CO2 eq / GDP

“Technological environment and services” form the direction of action where targets for transport and infrastructure meet. One of its strategic goals is “Accessible, innovative and energy efficient solutions in energy provision, achieving larger self-sufficiency and distributed energy generation“.

Its main supported areas will be: power infrastructure, power generation and effectiveness of energy consumption.

In regard to financial mechanisms, the NDP stresses the need for:

  • stimuli for attracting larger investments for energy saving and efficiency
  • support mechanisms for residents deploying renewable energy sources
  • extra investments for growing the share of renewable energy

The overall task for 2021 – 2027 set in the NDP is complex:  

Increase of energy security and independence, movement towards complete integration of energy markets, continuation of synchronization of the electricity grid infrastructure and development of a single gas market in the Baltic States, simultaneous support for civic micro-generation, involvement of households in RE generation and self-consumption and energy-saving construction and renovation of buildings.

Indicator – World Energy Trilemma Index:
2019 – 22nd place
2024 – 20th place
2027 – 19th place

Indicator – share of RES (total end consumption):
2019 – 39.01 %
2024 – 43.00 %
2027 – 46.50 %

Indicator – cumulative energy savings in end consumption:
2021 – 0 GWh
2024 – 3 750 GWh
2027 – 10 508 GWh

In the realm of housing and dwellings, the NDP stresses building renovation and utility costs.

Indicator – number of households (properties) with improved energy efficiency:
2019 – 16 363
2024 – 25 500
2027 – 40 000

Next steps

Despite that the draft NDP does not contain a separate chapter on energy transformation, its various dimensions have found a place in the priority area of environment and technology, however, much less in the commerce and industry.

For steering development and growth in the low-carbon direction, energy markets and existing infrastructures may pose many challenges. On the one hand, NDP’s coupling of energy and environment is commendable. On the other hand, the risk of missing the key economic forces remains. The impact that climate and social policies have in the realm of governing energy systems is still limited.

The priority area “Qualitative living environment and spatial development ” contains a scope of complex and promising ideas for energy transition, yet putting more emphasis on sustainable energy in the area of “Competitiveness of enterprises and material welfare” would offer a more balanced perspective on future investments.

The public consultation on the draft NDP continues until 8 November.

The first public hearing on the results of its strategic environmental assessment will be held on Thursday 7 November 2019.