Download Electricity regional initiative update on Latvia

ELECTRICITY REGIONAL INITIATIVE
UPDATE ON LATVIA
Ainārs Meņģelsons
Public Utilities Commission
Latvia
11th Baltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
KEY DATA

GDP 2009 versus 2008 – decrease by 18%

GDP 1st quarter of 2010 versus 1st quarter of 2009 decrease by 6,1 %

GDP 2nd quarter of 2010 versus 2nd quarter of 2009 decrease by 2,1%

Electricity consumption:
 2009 versus 2008 – decrease by 7,9%
 1st half of 2010 versus 1st half of 2009 - increase by ~2%
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Electricity Market Opening

All households and non household consumers with
less than 50 employees and yearly turnover less
than LVL 7 million have the rights to the universal
service in electricity sector

Universal service – the right to be supplied at the
regulated price

Consumers who do not qualify for universal service
are obliged to buy electricity at the market price
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Electricity Market Opening
Regulator has granted rights to JSC Latvenergo
from January 1, 2009 to set the tariffs for captive
customers by the company itself:
 Regulator assesses tariffs in conformity with the
calculation methodology and justification within
21 days
 if the Regulator does not reject tariff proposal, it
enters into force on the date indicated by the
company
 if the Regulator rejects tariff proposal for a
justified reason, tariffs do not enter into force
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Electricity Market Opening

35,6% of total electricity volume is traded for contract
price (non-regulated)

In 2009, 90 customers switched to another supplier,
4 of them switched back on 1st January 2010

On 1 January 2010 8% of free market customers
purchased electricity from independent traders
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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TSO unbundling
TSO – AS “Augstsprieguma tīkls” legally unbundled from
June 1, 2007
First version of concept on TSO unbundling in line with
the 3rd package presented to the Cabinet of Ministers
in June 2010
Initial option - Independent system operator
The lead institution in adoption of the 3rd package - the
Ministry of Economics, the first meeting of
stakeholders took place in June 2010
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Tariffs set up
Tariff calculation methodologies approved by Regulator
are in force from 2002 and amended respectively.
Regulator, after receiving a justified application from the
system operator (SO), approves tariffs or rejects
them.
The procedure is described in the Law and can take max
4 months.
Regulator has the rights to ask the SO to submit new
tariff proposal, if the case is present.
No subsidies are included in the SO’s tariffs.
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Access to the system
Regulator in 2008 and 2009 adopted regulations on
connection of producers and users to the system
Technical and operational requirements to the market
participants are described in the Grid Code.
TSO – AS “Augstsprieguma tīkls”, has made available
model contracts to access the Transmission System
on its Internet web page.
Slight adjustment could be required in the Grid Code
after adoption of the 3rd package.
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Retail market - electricity
Already settled:
 universal service
 last resort supplier
Adjustments required:
 provisions related to vulnerable customers
 current switching time is 2 months – the new directive
envisages only 3 weeks
 on requirements related to providing information to the
customers
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Investments in generation
Authorization procedure – in line with the 3rd package

Conducted in accordance with objective, transparent and non
discriminatory criteria

Reason for refusal shall be objective, non-discriminatory, well
founded and duly substantiated

From November 1, 2010 no more electricity feed in tariff for new
CHPs using natural gas
Tendering procedure - in line with the 3rd package

The procedure can be launched only when the authorization
procedure and energy efficiency/demand side measures are
insufficient to ensure security of supply

Details of tendering procedure should be published in Official
Journal of EU 6 months prior to the closure of tender
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Legal amendments - power
To fulfill the Regulation on conditions for access to the network for
cross-border exchanges in electricity, in January 2010 the Grid
Code has been amended:

The general scheme for the calculation of the total transfer
capacity and the transmission reliability margins

Harmonized calculation and publication of hourly balance
energy prices, the prices of previous months to be published
till the date of 15th of current month

The electricity importer/exporter from the non-EU (perimeter)
countries should pay perimeter fee – 0,3 Euro/Mwh

For consumers with the load less than 100kW the standard
load curve could be applied
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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Legal amendments - heat
Starting from November 1, 2009 the Regulator took over the
regulation of district heating from municipal regulators.
In April 2010 new tariff calculation methodology of heat tariffs' was
approved.
During 2010 PUC carried out activities related to collection of
information about companies to be regulated and consequently
issued or altered respective licenses.
The present threshold for regulation of heat companies:

Production - installed capacity above 1 MW

Trade volume - 20 000 Mwh/per annum
11thBaltic Energy Regional Initiative
October 1, 2010 Jūrmala, Latvia
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