The synchronisation of the Baltic states with continental Europe in 2025 creates the need for balancing reserve capacity. In the opinion of AS Augstsprieguma tīkls (AST), to ensure the availability of reserves, it is necessary to purchase electricity storage facilities, the acquisition of which was approved by the Cabinet of Ministers on 21 September 2021.
The priority objective of AST is to successfully implement the synchronisation project, which envisages connecting the Baltic electricity system in 2025 in synchronous operation with the continental European electricity system. One of the essential preconditions is to introduce the frequency regulation capacity of the electricity system, which will need to provide reserves for balancing and frequency regulation, which do not exist in the Baltic energy system to date.
"It is planned to attract European Union co-financing to acquire electricity storage facilities, which will enable AST to significantly reduce the negative impact on the transmission tariff, which in turn, is to be expected in the context of meeting AST''s obligation to provide balancing reserve capacity. In view of the above, AST intends to apply for European Union co-financing," said Gatis Junghāns, Member of the Board of AST.
The results of the Study revealed that in the Baltics, with the existing capacity resources, it will not be possible to provide full balancing reserve capacity, and that, while concerns regarding the availability of new resources for the implementation of the synchronisation project in 2025 exist, jeopardise the successful implementation of synchronisation.
As a transmission system operator, AST is fully aware of the importance of developing the reserve capacity market and fostering competition. Therefore, AST primarily links the acquisition and operation of electricity storage facilities to the need to successfully synchronise the Baltic states with continental Europe, however, in the future, for the further development of the balancing reserve capacity market, AST foresees the gradual dismantling of purchased electricity storage facilities as a long-term solution.
The electricity sector is dominated by renewables, but more decarbonisation is needed in other sectors. Latvia has already made inroads on the share of renewable energy in its fuel mix, with sizeable shares of bioenergy and hydropower. Renewable energy sources dominate its electricity mix, accounting for around three-quarters of domestic generation.
Other sectors, notably transport and buildings, continue to consume large amounts of energy and rely on dated infrastructure that hinders stronger reductions in energy consumption and greenhouse gas (GHG) emissions. The government should, therefore, prioritise energy efficiency and fuel switching in these sectors.
Sectoral roadmaps would clarify pathways to meeting climate targets. Latvia''s national target is to reduce total GHG emissions (without land use, land-use change and forestry [LULUCF]) by 65% from 1990 levels by 2030. Latvia is still on track toward this goal as emissions had fallen by 59% in 2021, though most of this was achieved between 1990 and 1995, based on economic shifts after independence from the Soviet Union. Emissions in recent years have, in fact, been growing.
Unusually for an EU country, most of Latvia''s emissions fall outside of the EUEmissions Trading Scheme (ETS). As Latvia looks toward achieving its 2050 climate neutrality target, actions taken today will inform the pace and scale of the country''s energy transition. Notably, energy-related sectors would benefit from detailed sectoral roadmaps that clarify the government''s envisioned pathways to achieving 2030 and 2050 climate targets, including detailing policy levers, technology penetration and financing requirements.
These changes have created new vulnerabilities that Latvia needs to manage carefully. In electricity, Latvia will need to move forward with efforts to synchronise with the European grid on an accelerated timeline. For natural gas, Latvia will become heavily reliant on liquefied natural gas (LNG) supply as well as (soon to be expanded) gas storage. Meanwhile, Latvia will remain fully dependent on oil imports, and will have to manage supply diversification efforts (without Russian supply) accordingly.
Latvia’s energy system is largely based on renewable resources, primarily hydropower from the Daugava River, supplemented by wind, solar, and biomass. While natural gas imports cover energy shortages, the country aims to increase wind and solar energy capacity, with significant progress already made in 2022.
Country is connected to European and Baltic energy networks, making import and export of electricity possible. In cities, biomass fuels district heating, while rural areas often rely on wood, coal, or gas.
Latvia''s renewable energy capacity has expanded significantly, led by the Daugava hydroelectric power stations as the main electricity source. In 2022, wind power capacity nearly doubled to 136 MW with the launch of a new wind farm. Solar energy capacity also saw a sharp increase, driven by heightened interest in energy independence and supported by state incentives for household solar installations. Figure 3 highlights these advancements, showcasing Latvia''s progress toward a resilient, renewable-powered future.
The graph in Figure 4 shows that approximately half of the electricity Latvia needs can be provided by RES, with additional volumes generated by TPPs, and the remaining difference imported. On average, depending on the season, which greatly affects electricity generation from renewable energy sources, approximately 40 to 50 % of the total required electricity in Latvia is generated from RES.
Managed by Augstsprieguma tīkls (AST), Latvia''s electricity network has 1,346 km of 330 kV lines and 3,893 km of 110 kV lines, with projects like a third link to Estonia and synchronization with EU grids underway. Energy storage, especially with BESS projects, and interest in hydrogen and Power-to-X are on the rise. Latvia is also exploring biomethane, aiming to integrate it into the national gas system by 2025.
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