LATVIA: Baltic Energy Market News Flash 5th Edition

03.05.2024 LATVIA: Baltic Energy Market News Flash 5th Edition

Energy news in Latvia

WIND

  • As informed earlier, since January 2023, law provides for compensation payments to the budget of municipality for discomfort caused by the wind parks. The amount of the payment had to be provided by the government regulations which were never adopted. Since January of this year, respective law has been slightly amended now specifying that the payment is meant for the development of the local community, which potentially will be directed to compensate neighbouring land-owners as well. The Cabinet regulations on the specific amount and other terms needs to be adopted until 30 June 2024. Now discussion is open whether this would be an annual fee of EUR 2,500/MW or instead 1.5% of the annual turnover.
  • In 2023, a law was introduced permitting to develop wind parks on state and municipal land. As follows, by the end of last year, State Forest entity auctioned 38 territories covering almost 160 ha. The guidelines for determining land plots with the potential for the development of wind parks, as well as for setting up auctions of respective build-up rights in 2024 were published in January this year. A map of potential locations of wind parks is created, intended for use by potential auction participants. Motivated applications on land plots to be included in auctions had to be filed to State Forest entity by 1 May 2024.
  • Currently, the 2019 Marine Spatial Plan is under revision and new and extended current offshore wind development areas might be proposed – it includes the coast of the southern part of Kurzeme and the sea area adjacent to it, covering a coastal area 120 km long from the border of Lithuania to the border of Ventspils county. Interim assessment of the current Marine Spatial Plan shows that biodiversity research and wind farm research areas overlap in several places, which requires setting up priorities between those. 
  • The Ministry of Defence has developed a map of permitted locations of wind parks in Latvia, taking into account operational needs of the defence industry, indicating the areas where the construction of wind farms is not supported; where there are restrictions and it is necessary to compensate the negative impact of wind parks; which do not affect the security and defence capabilities of the country. This has not yet been approved by the government and it is expected that there might be changes to the map.

BIOGAS, LNG

  • Latvian gas transmission grid operator Conexus Baltic Grid is developing the first centralised biomethane injection point in the Baltics and will provide guarantees of origin for gas produced from renewable energy sources. A unique solution will enable biomethane producers whose production facilities are located at a relatively long distance from the gas transmission system to transport biomethane from the production facility to a centralised biomethane injection point (BMIP). The operator expects to launch the first BMIP by Q4 2024 in Dzukste village.

HYDROGEN

  • Nordic-Baltic Hydrogen Corridor project aims to develop a cross-border 100% hydrogen transmission corridor from Finland to Germany via Estonia, Latvia, Lithuania, and Poland by 2030. The project involves six gas transmission system operators: Gasgrid Finland (Finland), Elering (Estonia), Conexus Baltic Grid (Latvia), Amber Grid AB (Lithuania), GAZ-SYSTEM S.A. (Poland) and ONTRAS Gastransport (Germany), which have already signed a cooperation agreement on 14 December 2021 to develop the Nordic-Baltic Hydrogen Corridor. The pre-feasibility phase of the project will be completed by the end of Q2 2024, and a decision on the way forward will be taken based on the recommendations developed during the pre-feasibility phase.

GRID

  • Introduction of flexible grid connection options are planned soon. To ensure faster access to the grid and possibility to combine different generation sources, the responsible Ministry in cooperation with TSO is developing a new regulatory framework for connecting to the transmission grid. The rights to this switchable capacity product are expected to be granted via auction procedures. Recommendations on such regulatory framework can be filed until 15 May 2024.
  • Also a map of the long-term development of the electricity transmission network in the Baltic Sea is currently being developed, initially including the following projects: the Latvian-Swedish interconnection (LaSGo project), the 4th Estonian-Latvian interconnection (ELWIND project), the Baltic-German interconnection (BalticWind Connector project).
  • Since 1 January 2024, a regulation came into force introducing hybrid capacity permit for connection of various energy generation units to one grid connection point. This gives the project developer the opportunity to combine electricity production technologies – wind power plants, solar power plants and storages, ensuring more even electricity production in the same connection. The holder of a hybrid permit is obliged to comply with the ratio of the types of electricity generation units specified in the hybrid permit. If one of the types is introduced with a lower capacity than specified in the hybrid permit, the permitted installed capacity of the other types of electricity production equipment decreases accordingly.
  • To facilitate electricity consumption when developing large capacity connections to the distribution system, half of the construction costs will be covered by the DSO; but when connecting to the transmission grid – a discount on the transmission service tariff will be applied for 5 years. This regulation has been introduced to the Electricity Market Law and is in force since 1 May 2024.

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