Energy, Financial Services, Latvia, Legislation, Markets and Companies

The letter questions the Economy Ministry's amendments, which stipulate that, starting from 2016, the state will no longer have to buy electricity produced from renewable sources, and that the period during which cogeneration plants may receive state aid will be reduced. The authors of the letter insist that the amendments will make the situation worse in renewable energy production, reports LETA.

The letter notes that the Economy Ministry's amendments are not reasonable, and that constant experiments and changes to regulations on renewable energy production, which affect energy producers, private individuals, private investors, banks and other participants, their plans and estimates, must not be permitted.

"We believe that an approach to the industry based on campaigning and public outcry, that is damaging investors' opinion of Latvia, is a mistake," says the letter.

The letter notes that just a small number of power plants generating energy from renewable sources has been put in operation, and that just LVL 86.1 million has been paid to renewable energy producers in five years, which has an insignificant effect on the end-rates. The letter says that the Economy Ministry's position, that issuing new permits must be halted immediately, is wrong, and informs that buying electricity from cogeneration plants operating on gas cost the state LVL 149.2 million in 2011 alone, and will increase to LVL 208.2 million a year in the near future.

"Lately there has been a lot of ill-conceived and biased information released by public institutions regarding the profitability of the industry, without a proper analysis of projects' financial indexes, the necessary investment amounts, as well as problems of technological and administrative character that companies implementing such projects had to overcome," says the letter.

If no new permits are issued, this will have a negative effect on projects in various stages of development, and banks and foreign investors' position on prospects of the renewable energy industry in Latvia will change. This will also affect businessmen implementing such projects.

The letter says that the Economy Ministry is dramatizing the situation regarding the amount of electricity that the state has to buy from renewable energy producers and its effect on electricity end-rates for customers. Furthermore, the ministry has not analyzed the positive aspects of renewable energy generation - the creation of new jobs in economically underdeveloped regions, increasing economic activity, tax revenue, and others.

The authors of the letter are asking the government to halt the Economy Ministry's amendments until agreement is reached on Latvia's energy strategy 2030.

The letter has been sent to Dombrovskis and the Economy Ministry, Agriculture Ministry and Ministry of Environmental Protection and Regional Development.

The letter has been signed by Latvian Biogas Association, Latvian Biomass Association, Wind Power Association, Latvian Thermal Gasification Association, Small Hydropower Association, horticulture association Latvijas darznieks, as well as companies from wood processing, metalworking and other industries.

The government is to review the Economy Ministry's amendments at a meeting today.