Energy, Latvia

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Latvia might phase out MPC in three years' time - Aseradens

BC, Riga, 16.07.2018.Print version
Latvia might phase out the mandatory purchase component (MPC or the part of the electricity price used to subsidize green energy producers) in the next three years’ time, Economics Minister Arvils Aseradens said in an interview with Latvian Television this morning, informs LETA.

“We have put together a scenario providing for scrapping MPC altogether in three years’ time. We will make this scenario public on August 1. It’s not going to be easy. I am already anticipating a very angry reaction,” Aseradens said.


The minister said that the MPC system could be abolished already in 2019 but Latvia would then be faced with major lawsuits. “I would rather not speculate, but these claims might reach hundreds of millions of euros. Our task is to find a legal way out of this situation,” Aseradens said, adding that the European Commission offers good instruments for dealing with the issue.


As reported, the ruling coalition parties have supported the proposal on setting up a high-level work group that will have to prepare an action plan for the abolition of the MPC system by August 1.


The Cabinet of Ministers has approved the Economics Ministry's proposals for tightening oversight of the energy producers to prevent any MPC-related fraud.


Following the allegations of possible fraud at several cogeneration plants, the Economics Ministry conducted inspections at several companies and found that they were not generating any power. Most probably, the power plants had been turned on just for the necessary 72-hour test period to get their MPC licenses approved. The Latvian Economics Ministry so far has annulled licenses to a total of 21 heat-and power (cogeneration) plants.


MPC is a part of the electricity price used to subsidize green energy producers which, on one hand, has increased the electricity costs for end-users and, on the other hand, has been widely abused by fraudulent energy producers.

 






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