Current Status of Energy Policy on Development of Distributed Generation in Latvia

1. INSTITUTE OF PHYSICAL ENERGETICS Current Status of Energy Policyon Development of DistributedGeneration in Latvia Vice-director Institute of Physical Energetics Dr.phys. Gunta Šlihta Vilnius 6 March 2007

2. INSTITUTE OF PHYSICAL ENERGETICS Energy Policy Documents Main political documents (2006) Strategy of Energy Development 2006–2016 Latvian Renewable Energy Strategy 2006–2013 The main goals of both strategies – definition of essential principles of policy planning of Latvian government, objectives and course of actions of renewable energy resources usage in Latvia.

3. INSTITUTE OF PHYSICAL ENERGETICS Strategy of Energy Development 2006-2016 • On June 27, 2006 adopted Regulations of the Cabinet of Ministers Strategy of Energy Development: • Strategy sets the basic principles to secure self-sufficient energy supply in Latvia until 2016 • 1236.32 Mio. LVL (1759 Mio. EUR) are foreseen for implementation, • Greater self-sufficiency in electricity – up to 80 % 2012 und up to 100 % until 2016, • Estimated capacity to be installed according to the Strategy – at least 700 MW, • Use of CHP potential – 300 MWth in the big cities of Latvia, and 100 MWth – in other cities of Latvia

4. INSTITUTE OF PHYSICAL ENERGETICS Strategy of Energy Development 2006-2016 • The Strategy has following aims: • to improve security of energy supply, • to increase self-sufficiency of electricity generation • to increase self-sufficiency in primary energy, • to diversify energy supply in primary energy (to create support for Distributed Energy Resources), • to remove all barriers for better development of energy market in the Baltic States • The Strategy is important: • to provide better access to energy for inhabitants, • to elaborate infrastructure for energy supply • to carry out measures of energy efficiency

5. INSTITUTE OF PHYSICAL ENERGETICS Latvian Renewable Energy Strategy 2006–2013 • Latvian Renewable Energy Strategy 2006-2013 has following objectives: • to increase the share of RES in total energy balance of Latvia • to promote safety of energy supply in Latvia • to carry out measures to reduce greenhouse gas emissions • In accordance with Latvian Renewable Energy Strategy 2006-2013 it is necessary: • – to install new wind generators with capacity 135 MW, • – to install new biomass and biogas plants with capacity 78 MW, • – to use biomass additionally also for combined heat and power generation – 3 MW, • – to install new small hydro power plants with capacity – 2.5 MW.

6. INSTITUTE OF PHYSICAL ENERGETICS Electricity Supply in Latvia1(billion kWh) 1 Source: state JSC Latvenergo, Ministry of Economics, CSB 2 Daugava cascade and Aiviekste HPP (HPP of state JSC Latvenergo) 3 CHP of state JSC Latvenergo

7. INSTITUTE OF PHYSICAL ENERGETICS The share of small HPS and wind generators in total electricity supply (2005) • Small hydro power stations produced 58 GWh • Wind generators – 46 GWh • Considering that the average consumption for 1 day in Latvia 2005 – 19.32 GWh: • produced energy from small HPS – sufficient for 3 days, • produced energy from wind generators – sufficient for 2.4 days.

8. INSTITUTE OF PHYSICAL ENERGETICS Installed capacities of RES for electricity production (2005)

9. INSTITUTE OF PHYSICAL ENERGETICS Current trends • Starting from year 2000 electricity demand in Latvia has grown between 4–5%, but 2006 – even 7.1%. • The average energy consumption per inhabitant in Latvia 2005 – less that a half of average energy consumption in western Europe. kWh

10. INSTITUTE OF PHYSICAL ENERGETICS Current trends • Despite of energy efficiency measures the estimated growth of electricity demand will continue to raise rapidly.

11. INSTITUTE OF PHYSICAL ENERGETICS Possible scenarios Full closing of the second reactor in Ignalina 2009 Purchase of energy from foreign energy companies Production of electricity in Latvia Problem – Lithuania, Estonia and Russia will have their own needs of installed capacity and will not import energy to Latvia in sufficient amount Urgent need for new projects in Latvia in order to install the necessary capacity

12. INSTITUTE OF PHYSICAL ENERGETICS Possible scenarios EU Directive 2001/77/EC (2003) and Law on Electricity Market (2005) defines – the share of renewable energy sources in energy production – 49.3 % until 2010, i.e., additionally installed RES stations with annual production of 1400 GWh Balanced development – incl. use of RES, coal power station 400 MW in Kurzeme (western part of Latvia) and nuclear power plant (the share of Latvia – 400 MW) Installing of wind genera-tors with total capacity approx. 1500 MW and other 1500 MW for balance and security of energy supply until 2025

13. INSTITUTE OF PHYSICAL ENERGETICS Thank you for your attention! INSTITUTE OF PHYSICAL ENERGETICS Aizkraukles Str. 21, LV-1006, Riga, Latvia Tel.: +371 7552011 Tel.: +371 7558680 Fax: +371 7550839 E-mail: fei@edi.lv http://www.innovation.lv/fei