Energy, Energy Market, Latvia

Karlis Mikelsons

He categorically rejected complaints by independent experts that Latvenergo will use borrowed money in the work on the "economically unviable" 2nd cogeneration plant, which, in the experts' opinion, will not work for most of the year, and the plant will be a EUR 388 million-worth "spare wheel" for the Latvian power grid.

According to Mikelsons, unprofessional opinions have been appearing in the mass media recently concerning Latvenergo investment projects, as well as the reconstruction of the 2nd cogeneration plant.

The project will allow Latvenergo to improve its competitiveness, and with the same amount of gas produce three times more electricity. Also, reconstruction of the 2nd cogeneration plant is necessary when taking into account the wear and tear factor.

In Mikelsons view, there is no foundation for rumors concerning the economic viability of the project, and the plant will be competitive in the Baltic and Russia region.

Not one lat will be used in the project from state funds, and finance will be provided by the European Investment Bank and the European Bank for Reconstruction and Development, which have evaluated and approved the project. "There are no doubts about this project" insists Mikelsons.

He also disagrees with claims that the project will increase Latvian dependence on Russian gas. As the Latvenergo Director reminds, Latvia has large gas amounts of gas stored at the Incukalns gas storage facility, which in an emergency or other unforeseen situation would meet Latvia's gas needs for three years.

Latvia is ranked the fourth most independent country in Europe in terms of the security of gas supplies.

As Mikelsons points out, in the energy industry there is no term "dependency". There can be such a thing as alcohol dependency, but in the energy industry there is only cooperation or lack of cooperation. More than half of Europe uses Russian gas, and Europe willingly cooperates with our neighbor.

"This is efficiency, this is thinking about the environment" said Mikelsons, describing the 2nd cogeneration plant reconstruction project.