As the year 2021 drew to an end, Green Liberty reached out to the community of experts in order to map the main events and processes shaping the arena of Latvia’s renewable energy sector. The unprecedented rise of energy prices has dramatically shaken the markets and expenditure plans of households and business, thus we highlight a few other topics which play a role in Latvia’s ongoing transition towards decarbonized and more democratically governed energy systems based on solar and wind power.
Solar PV gain popularity
2021 brought about a significant increase in the number of privately installed solar panels. The new regulations for the net metering system were adopted in 2020 that made microgeneration economically feasible for households. Extension of net metering to legal entities and remote production sites is expected in 2022 with the adoption of amendments in the Electricity Market Law.
The data provided by the grid operator “Sadales tīkls” show that the number of microgenerators (dominated by solar PV) has doubled in 2021. However, the total number of installations remains rather negligible in comparison to other countries.
In addition to expanding the household segment, there is a growing interest from commercial and industrial stakeholders seeking to produce green electricity locally in response to sustainability agenda and energy bills.
The movement towards solar energy is evident among municipal institutions and utility providers as well. For example, the heating company “Salaspils Siltums” added a new solar PV park of 100 kW to its facilities, famous for the large-scale solar district heating system.
Despite the positive trends, solar prosumerism is still at early stage. More flexible net metering, feasible commercial projects and modes of collective consumption await implementation in the years to come. Installing solar panels for multi-owner buildings is not possible and the first regulation of energy communities is still being discussed. Yet clear references to solar energy have been made in the draft new planning documents of Riga City and Riga Planning Region, which indicate that distributed generation may become more accessible to various urban settlements, lessening the gap of opportunity between detached and shared housing.
Wind power takes precedence
Stagnation in Latvia’s wind park development for the past decade has been well noted by researchers and industry representatives. However, in 2021, wind energy made a new entry on the political agenda, both on municipal and national level.
The legal case about the municipal decision to deny a permit to the wind park “Pienava” in Tukums district ended with a court decision favourable to the project developer. The ongoing tensions with the local governments and citizen groups in Tukums and Dobele districts prove that wind park planning is going to remain a contested site, thus regulatory interventions must be coupled with citizen involvement and high quality environmental impacts assessments. The cases of opposition, unclear municipal, and the emerging framework of energy communities have initiated high-level discussions on best practice in the commercial sector and local benefits for inhabitants near wind turbine locations.
A large step forward was made by Latvenergo, the national energy company, who announced wind park development plans, including forest areas, and joined the Latvian Wind Energy Association.
Although Latvia is lagging behind Estonia and Lithuania, future wind energy projects are gaining increased visibility. Strong signals have recently come from the political leaders, stressing that wind generated electricity should become the path to Latvia’s energy sovereignty. Likewise, wind energy has attracted more serious engagement in the media, thus the space for critical narratives and case studies is becoming populated with better texts.
Costs and regulatory proposals for the Fit for 55
The energy crisis has turned the discourse on sustainable investments in the RES direction. Whereas the former debates surrounding the National Energy and Climate Plan (NECP) often stumbled on expected costs of energy transformation, the end of 2021 showed that renewables may offer incremental and profound solutions, yet the current political and economic systems are not ready to adapt immediately. The burden of the fossil gas and electricity prices will likely put off several sustainable investments, however, it will also accentuate the necessity for faster uptake of renewables and shed a new light on the role of public funding, for example through the future Energy Efficiency and RES Fund envisioned in the NECP.
The planned EU funds investments and Latvia’s Resilience and Recovery Plan do not yet promise a generous addition to increasing RES generation capacity. Therefore, mobilisation of private capital and measures like energy efficiency obligation schemes efficiency may have more profound effects.
Notably, the entrance of Enefit Green in the Nasquad Baltic Stock Exchange brought about a new shift in Latvia’s energy market. In the financial sector, the EU-level work on taxonomy of green investments did not reach closure, however, several Latvia’s banks turned to better situating RES projects in their portfolios.
Besides economic drivers, the work on RES-promoting legal environments continued in the light of the Fit for 55 package and the transposition of the EU directives. The draft Transport Energy Law, and the draft amendments to Energy Law and the Energy Market Law follow these lines but need a speedup to reach the adoption as well as a broader discussion on their expected implications. Insecurity concerning regulatory changes and lack of support for the existing RES producers remained.
The opinion presented in this article belongs to Green Liberty. We thank the experts who provided us with informed insights:
Agris Kamenders, Dzintars Jaunzems, Edgars Augustiņš, Edgars Vīgants, Ieva Alhasova, Ina Bērziņa-Veita, Jānis Irbe, Jānis Šipkovs, Gatis Bažbauers, Kaspars Osis, Kristaps Ločmelis, Kristine Doroško, Līga Dreijalte, Linda Austere, Magda Jentgen, Olga Bogdanova, Toms Rutkovskis, Valdis Ratniks, Valdis Vītoliņš
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