The energy sector is adapting slowly

The energy sector is adapting slowly

Photo: Pilseta24.lv

Energy and utilities, in brief:

  • the electricity market has been open for unrestricted competition since 2007;
  • there are only two electricity sellers on the market – the state JSC Latvenergo and Enefit;
  • there is only one player in the delivery and distribution of natural gas – Latvijas Gāze;
  • the proportion of renewable energy resources in the energy balance of Latvia is 30–35%.

Competition on the electricity market is developing very slowly legislative and political battles delay the imple­mentation of green energy.

Electric energy

  • Energy comprises only a small part of  GDP (approximately 3,5%); however, it is a vitally important part of the national economy.
  • The electricity market in Latvia has been open since 2007. There are only two electricity dealers on the market – the state-owned enterprise - JSC Latvenergo, and Enefit, an affiliated company in Latvia of the Estonian state enterprise Eesti Energia. Only enterprises with an annual turnover in excess of  10 million EUR, or with at least 50 employees, may buy electricity on the free electricity market. Smaller enterprises and households are still on the regulated electricity market – consequently, they are the customers of the JSC Latvenergo. Electricity prices on the regulated market are presently  lower than the free market price of electricity.
  • Electricity in Latvia is produced by 140 small hydroelectric power stations, 30 wind electric power stations and 69 cogeneration electric power stations. Approximately 30 businesmen received a licence for distribution and trade of electricity (data: Ministry of economic Notification about development of national economy 2011).

The delivery of natural gas

  • There is only one player on the Latvian market of delivery and distribution of natural gas – the JSC Latvijas Gâze, the shareholders of which are E.ON Ruhrgas (47%), Gazprom (34%) and Itera Latvija (16%). Latvijas Gāze has concluded an agreement with the government of Latvia setting a fixed monopoly until 2014. The gas distribution infrastructure is  100% owned by Latvijas Gāze.

Renewable energy resources

  • The proportion of renewable energy resources in the energy balance of Latvia is 30–35%. The outlined goal outlined for Latvia is to increase the proportion of  renewable energy resources to 40% by 2020.
  • The greatest contribution to green energy (in the amount of 80%), is from the use of wood (mainly in heating), and by Daugava hydroelectric power stations (16%), which are owned by Latvenergo.
  • The usage of the "new" renewable energy resources, such as biogas and wind, amounts only to 1% of total energy production.
  • The development of green energy resources is delayed by a lack of regulatory legislation, as well as by disorder with regard to state support for this sector.
  • The government action plan with regard to  renewable energy resources defines biomass and biogas as the most promising types of green energy in Latvia.

Heating

  • In the field of heat supply in public service are engaged 88 heat supply businessmen.
  • Approximately 65% of the Latvian population uses centralized district  heating. The majority  (52%) are residents of the capital,  Riga. In rural regions, firewood is mainly used for heating. Almost all district heating in Riga is produced from natural gas.
  • Heating plants using wood chips and biomass are being developed.

Water supply

  • In Latvia, residential water supply  is provided by municipalities and their public water supply enterprises, which deliver water to residents, whose houses and apartments are connected to the centralized water supply system of the
    city/village. Homes, which are not connected to the centralized water network, have autonomous water supplies.
  • Water supply modernization projects have been implemented throughout Latvia with European Union funding.

Solid waste management

  • According to Eurostat, Latvia’s  per capita production of municipal waste (333 kg/in 2009) is the second lowest among EU countries (Estonia and Lithuania produced 346 kg and 360 kg per capita).
  • The major players in the branch of trash collection are Veolia, L&T Hoetika, EkoRīga, EkoKurzeme.  
  • Collection and processing of specific kinds of waste is the field of specialization for such enterprises, as Lautus, BAO, Latvijas Zaļais  punkts and Zaļā josta.
  • The major solid waste disposal sites are Getliņi Eko near Riga and ZAAO in Vidzeme. Both of them produce biogas from waste. This biogas is used for heating or transportation.
  • Waste sorting in Latvia is still not fully developed.

Consumption of primary energy ressourses in Latvia, PJ

The energy sector is adapting slowly

TOP 5 largest companies in energetics branch according to net turnover

No.

Company

Sphere

Turnover, mil. EUR, 2009

Turnover, mil. EUR, 2008

Turnover yearly changes, 2009 vs 2088, %

Profit 2009, mil. EUR

Employees 2009*

1.

Latvenergo JSC

Production of electric energy

867,60

811,54

7%

28,79

1 387

2.

Latvijas Gāze JSC

Provision with natural gas

469,13

499,44

-6%

28,41

1 327

3.

Sadales tīkls JSC

Production of electric energy

299,57

355,51

-16%

-

2 820

4.

Itera Latvija LLC

Provision with gas

108,25

200,39

-46%

5,65

38

5.

Baltenergotrade* LLC

Production of electric energy

28,10

52,19

-46%

1,68

4

* the liquidation procedure has been initiated
Source: the database of ‘’firmas.lv’’

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