Latviski English По-русски
Ceturtdiena 24.08.2017 | Name days: Boļeslavs, Bērtulis

Latvenergo: average electricity price in the region will reduce

(No Ratings Yet)

The postponing of the liberalization of Latvia’s electricity market was an unexpected surprise, because Latvenergo was prepared for competition this year, said Latvenergo production director Māris Kuņickis in his interview to BNN.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUHe predicts electricity will become cheaper in the region in the nearest future.

What are some of the most notable recent events in your sector?

In 2013, Latvenergo performed investments in several important sectors. We have completed a full reconstruction of Riga TEC-2, continued improving our services for customers in the Baltics and performed a successful release of Latvenergo bonds. We have also made major progress in improving corporate management. It is also worth mentioning investments in network assets, including Kurzemes Loks.

There have been warnings about some desire in the sector to use artificial methods and benefits to subsidize new forms of energy, which may result in an increase of electricity costs for consumers. Traditional large-scale production plants are left behind despite effectively serving customers with dependable technologies over the years.

Can you say economic conditions are improving and there is a lot of potential for economic growth in the market?

Latvenergo is the largest producer of electrical energy in the Baltics. In 2013, we sold 7,954 GWh of electricity to retail customers. This is 4% lower than we managed to sell the year before. This decline in sales was due to lower consumption of electricity in Latvia’s manufacturing sector. Nevertheless, as a result of targeted sales activity in 2013, Latvenergo managed to increase its sales in Estonia and Lithuania by 32%. The number of retail customers Latvenergo has outside of Latvia has exceeded 20,000.

How would you describe the government’s economy policy aimed at improving the economic situation in the country?

Nearly all of the European Union is dominated by market development proportionality challenge: on the one hand – there are attempts to develop energy production diversity. On the other hand – there is the matter of making sure this development does not impact customers. This situation is also present in Latvia, where the matter regarding the rise of the aforementioned risks was discussed by experts and residents alike in 2013. Solution to this problem was sought on a national level. Officials and organizations discussed methods of preventing growth of price pressure in order to make sure mandatory energy procurement does not slow down economic development and residents’ welfare.

How is the industry affected by Latvia’s policy? What changes to legislation would you like to see? What helps? What makes things more complicated?

All businesses in Latvia, including Latvenergo, are affected by Latvia’s policy. Even though the price of electricity has changed since 2011, when the new electrical energy tariffs came into force in Latvia, the mandatory procurement component has increased as well. The liberalization of the market continues to realize an unusual social function for entrepreneurs. However, this situation cannot continue forever – the state is busy developing a support mechanism and safety pillows for groups that require them. We are prepared for having the market in Latvia liberated in 2015. We continue to work on our offers in order to make sure Elektrum is a Nr.1 choice among households in Latvia. However, I want to add that the postponing of liberalization of Latvia’s electricity market was rather unexpected for us – we were prepared to engage our competition in 2014.

How would you describe the industry’s position in the Baltics? What about competition with Estonia and Lithuania?

Liberalization of electricity markets in Baltic States continued in 2013. Estonia’s electricity market was liberated for everyone on January 1st, 2013. Lithuania’s market was liberated for all legal customers. The gradual liberalization of the Baltic electrical energy market allows Latvenergo to perform targeted sales activities in order to maintain its positions on the Baltic electrical energy market.

Under conditions of sharp competition, we have expanded activities and increased market shares in Estonia and Lithuania. The volume of electricity sold outside of Latvia forms more than one-fourth of the total sales and reaches 2,081 GWh, which is 674 GWh more than the volume of electricity sold in Latvia by competitors.

What can you can your ‘trump card’? What is your ‘Achilles’ heel’?

One of the most important recent event to shake up Latvia’s energy sector is the completion of construction of the second bloc of Riga TEC-2 in the second half of 2013. With a power output of 2,569 MW we have made Latvia self-sufficient for the first time in history. We are now able to produce our own electrical energy.

The reconstructed TEC power plants in Riga are ideal for flexible solutions, which are invaluable in a situation with steep competition. Following reconstruction, Riga TEC-2 now has a power output of 832 MW of electrical energy and 1,124 MW of heating energy output. We have reduced CO2 emissions to a minimum and made sure the plant works with high efficiency.

Riga TEC-2 has a limiting factor for uncontrolled rise of prices of imported electricity. With that, importers of electrical energy cannot force us to procure electricity for a price that is higher than production costs at Riga TEC.

Trade of electricity in the Baltics is performed in accordance with Nord Pool Spot. Every customer can check NPS prices in other countries online. The functioning of the exchange and market is not possible without a common and accepted electrical communication system.

Can you say there is a lack of skilled workers in Latvia?

Employee rotation is not large in Latvenergo – 6%. It does not present risks for the company’s long-term development. It does provide a balanced exchange of knowledge to young specialists.

Employees are Latvenergo’s main resource. Latvenergo highly values the diversity of its workers. This includes work experience, new knowledge and approaches. Latvenergo’s work specifics dictate the importance of accumulation and passing on of knowledge with regard to a reasonable and balanced retirement plan and replacement of old employees with young ones.

What do you predict for the next five years? Will the situation in the industry improve, worsen or remain the same?

Our objective and only opportunity to develop balanced solutions is by performing correct investments in the right moment and right amount.

Latvian and Estonian network operators are currently developing a new network project between Latvia and Estonia that will allow electricity price in the Baltics to become homogeneous. This network will develop. Even now Estonia and Finland share a network with power output of 1,000 MW. There will also be a network set up between Lithuania and Sweden (700 MW), which may later become connected with Poland (1,000 MW). This network will allow entry for electricity from Scandinavia to enter our region and reduce the average price in the region.


Leave a reply

People’s gathering: criticism of president Vejonis causes loud applause

The New Conservative Party’s organized people’s gathering at Town Hall Square this Wednesday, 23 August, gathered more than 400 people. JKP representatives said that people should gather for such meetings every month, because this is how democratic society is formed.

Expert: pressure on cost increase in the near future will be enormous

Pressure on the increase of costs in the next several years will be enormous, and there are worries about the government’s ability to withstand that, said Fiscal Discipline Council’s member Andzs Ubelis in an interview to 900 seconds programme.

Lithuanian President kicks off initiative to bring Lithuanian emigrants home

In another attempt to stem high emigration, Lithuania’s President Dalia Grybauskaitė along with Jurgis Didžiulis, a hip Lithuanian singer of Columbian descent, launched a new initiative, «Choose Lithuania», aiming to slow down exodus.

NMPD Director Sarmite Villere to step down

Sarmite Villere, director of Latvia’s Emergency Medical Service, has decided to step down from her post, says NMPD representative Inga Vitola.

Antane admits the situation with Latvia’s transit industry is tragic

Baltic Association – Transport and Logisics President Inga Antane describes the situation with Latvia’s transit industry as tragic. Cargo volume decline has been continuing since 2012. Antane also mentions that, looking at the recent past, 2016 was one of the worst in Latvia’s transit history, Antane said in an interview to RigaTV24.

Daugavpils party decides to leave coalition shared with Harmony

Daugavpils political party Mūsu partija, in which Rihards Eigims is the leader, has decided to leave the established coalition with Harmony in Daugavpils City Council.

Pulks: lunches in Riga’s kindergartens should be free

Riga City Council’s Unity faction leader Olafs Pulks has sent a letter to the city council’s Education, Culture and Sports Department’s Director Guntis Helmanis, asking him to immediately perform calculations and prepare proposals for Riga’s budget project for 2018 to secure free lunches for all children of the capital’s kindergartens.

Study: poor households will gain very little from the tax reform

Poor households will gain very little from the recently approved tax reform. There is a large number of unemployed people who will not the change with PIT, according to results of a study performed by Stockholm School of Economics in Riga and economic policy research centre Biceps.

Puce: either Kucinskis has a memory like a goldfish, or he doesn’t take his own words seriously

Political party For Latvia’s Development invites Prime Minister Maris Kucinskis to prove the promise he once gave to Latvian taxpayers to not change taxes in the next three years. This invitation was extended, considering information that was voiced at the 22 August meeting of the Cabinet of Ministers in relation to the search for ways to expand fiscal space.

Brivais vilnis: grey economy’s presence in fishing industry may be 40%

The total proportion of grey economy in Latvia’s fishing industry may be around 40%, says fish processing company Brivais vilnis chairman Arnolds Babris.

SRS: violations uncovered at restaurants mostly associated with illegal employment

Most of the violations uncovered by Latvian State Revenue Service during inspections at restaurants in Riga and Jurmala are associated with illegal employment and non-declaration of revenue, said SRS Director Ilze Cirule in an interview to Rīta Panorāma this morning 23 August.

Europe commemorates victims of Nazism and Stalinism

Nine years ago, MEP Inese Vaidere and four of her foreign colleagues accomplished that the European Parliament officially approved and issued a written declaration on declaring 23 August the Day of Remembrance of the Victims of European Stalinism and Nazism.

FCMC allows Latvian Central Depository to function as service provider

Finance and Capital Market Commission has decided to allow Latvian Central Depository to start providing services as a central securities depository starting from 18 September.

Without cheap labour, Liepaja prison construction may take a while

Because projects submitted by different construction companies for Liepaja prison exceed the funding that is available for the project, it is planned to cease the procurement. A new one will be announced soon, said Justice Ministry’s state secretary Raivis Kronbergs after a government meeting on Tuesday, 22 August.

Sudraba claims KNAB investigated oligarch case to the maximum extent

Investigators of the so-called oligarch case, which continue working at the Corruption Prevention and Combating Bureau, performed their work responsibly. Information leak during the investigation, on the other hand, had impacted the investigation considerably, said head of the parliamentary investigation committee Inguna Sudraba as a visit to KNAB.

Survey: 43% of internet store users purchase something once a month

Overall, Latvian consumers are satisfied with the purchases they made on internet stores. 65.3% of respondents believe internet stores are safe and reliable. 44.7% of respondents say they have never had any problems when shopping on the internet, according to results of a survey performed by

Government establishes prohibition to wear face-concealing clothes in public

On Tuesday, 22 August, Latvian government supported Justice Ministry’s proposed legislative draft on restrictions for face-concealing clothes, which prohibits residents from wearing such clothes in public places.

Experts explain why a teenager’s «I don’t know» is so dangerous

Most often we say things like «I don’t know» because we are afraid of making choices. Reaching their teens, youngsters become more independent, and the inability to make responsible decisions and say «no» can have serious consequences, says psychologist Sabine Vilcina and youth motivation programme «MOT. Izvēlies drosmi!» manager Ilze Paidere-Stake.

Traders: following VAT decline, prices of goods will decline as well

Latvian Association of Food Traders supports Agriculture Ministry’s proposal to reduce VAT rate for food and separate food product groups. Traders confirm that this step will also reduce food product prices in stores.

The most major risks and solutions for real estate purchase and rent with option to buy

To acquire housing in one’s property, often residents use rent with an option to buy. Sworn attorney Zanda Zaluma of Eversheds Sutherland Bitāns shares advice resident should keep in mind when signing real estate contracts.

Finance Minister: businessmen will be forced to pay larger wages

The current market situation shows that Latvia should speed up its education reform and think about attracting additional human resources from other countries, said Latvian Finance Minister Dana Reizniece-Ozola in an interview to Latvijas Radio.

Latvia to procure Stinger anti-air missile launchers

A mutual contract has been signed between Latvian Defence Ministry and Danish Defence Ministry for the procurement of anti-air missile launchers used by the Danish armed forces, as confirmed by Latvian Defence Ministry.

Oil prices and stock exchange indexes decline in Europe

On Monday, 21 August, oil prices declined. Exchange indexes in USA increased slightly, whereas exchange indexes in Europe declined because of concerns over the policy implemented by the administration of US President Donald Trump.

Terrorists in Barcelona were planning three explosions

Terrorists, who performed two attacks in Catalonia last week, were initially planning to blow up three shuttle buses in crowded areas in Barcelona, as reported by El Espano.

Lawyer: Maxima wants to earn by reducing compensations for the tragedy

Maxima Latvija and Zolitude 21.11 have reached an agreement on payment of EUR 900,000 to support victims of Zolitude tragedy – EUR 5,000 to EUR 75,000 to each person, as reported by Maxima Latvija.