This presentation provides an overview of the Latvenergo Group and the electricity markets in Latvia and the Baltic region. Some key points:
- Latvenergo Group is the dominant electricity generator and supplier in Latvia, owning most generation, transmission, and distribution assets. It supplies around 30% of electricity in the Baltic market.
- Latvia's electricity supply comes from large hydropower plants on the Daugava River (38%), combined heat and power plants (25%), and imports (29%). The market is opening to competition but Latvenergo remains the dominant supplier.
- The Baltic countries are working to integrate their electricity markets by 2015, with a common market design and trading platform to facilitate regional
2. Agenda:
1. Latvenergo Group in brief
2. Electric power market of Latvia
3. Baltic market
4. Renewable energy sources
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3. Latvenergo Group in brief
General Financial
Fully owned by the Republic of Latvia (M EUR) 2007 2008 2009 2010
Integrated energy utility engaged in Revenues 514 677 712 818
Generation
Net Profit 11 10 28 63
Transmission
Distribution Investments 317 281 149 197
Supply
Telecommunications
4517 employees
Moody’s credit rating Baa3 - stable
Technological Customers
Installed generation capacities: Energy sold (2010)
Electric – 7620 GWh
Electric – 2 362 MW
Heat – 3000 GWh
Thermal – 2 275 MW
About 1 million customers connected
Length of power lines
Baltic electricity market share ~ 29%
Transmission – 4 747 km
Distribution – 90 928 km
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4. Latvenergo Group structure
Latvenergo Group business is organised:
Non regulated business lines
Regulated business lines
According to EU regulations TSO and DSO
are unbundled in new legal entities. TSO is
reorganized into independent system
operator and transmission system owner.
Transmission system owner Latvijas
elektriskie tīkli AS (Latvian electrical
network) established in 2011. Independent
system operator will be sold to the state.
Geographic expansion by participating in
regional trade
Social responsibility is addressed by the
establishement of Pension Fund
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5. Latvenergo Group business lines
Generation Trade & Supply Support functions
Transmission Fully regulated
assets Transmission Distribution
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6. Agenda:
1. Latvenergo Group in brief
2. Electric power market of Latvia
3. Baltic market
4. Renewable energy sources
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7. Electricity supply structure in 2010 (GWh)
2640
3446
29%
38%
8%
693 25%
2304
Daugava’s HPP (38%) Riga CHPP (25%)
Other producers(8%) Import (29%)
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8. Latvenergo and its competitors electricity sold in Latvia, GWh
8000 7529 7480
7139
7000 6974
6678
6000
5000
4000
3000 Latvenergo
2000
Other traders
1000
351 340
0 3 94
0
2006 2007 2008 2009 2010
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9. Energy risk insurance (ERI)
In 2010, Latvenergo AS in cooperation with insurance
company BALTA AAS began to offer a new service never
before seen on the Baltic market: ERI
ERI provides insurance of all technological equipment,
machine tools, stock, utilities, goods, raw materials,
unfinished and finished products that are owned by a
company
ERI is covering electricity supply interruptions or lightning
damage
In 2010, Latvenergo AS gave customers a total of 510 ERI
certificates. 24 customers received ERI compensations within
half a year.
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11. Customer satisfaction
In 2010, an average of 500
complaints were received and
processed each month. The
complaint ratio to total number of
customers did not exceed 0.6% in
2010.
Just 9% of all complaints were
justified, with another 5% partially
justified
Responses to 52% of complaints
were provided within a maximally
short time period of 15 days.
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12. Agenda:
1. Latvenergo Group in brief
2. Electric power market of Latvia
3. Baltic market
4. Renewable energy sources
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13. Baltic electricity supply balance 2010
Consumption: 26 TWh
Generation: 23 TWh
Import
12%
Other stations Narva station
In the Baltics
38%
16%
Kruonis HAES
3%
Vilnius CHPP
2% Riga
Elektrenai CHPP Daugava HPP
7% 9% 13%
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15. Price formation estimation in Baltic region
Price is set by
the most
expensive
producer or
supplier who
cover the
consumption
Increasing
subsidized RES
volumes
distorts the
market
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17. Opening of Baltic electricity market in figures
Total Total cons. Criteria to became Estimated
clients a member of open open market
(M) (TWh) market (%)
Consumption
0.5 8.5 > 2 GWh/year ~ 30
All from 2013
> 50 employees or
0.9 7.0 turnover > 10 MEur ~ 48
> 100 kW (from
Jan 1st, 2011)
> 30 kW (from
Jan 1st, 2012)
1.4 11.0 ~ 57
All from 2015
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18. Total consumption of the electricity of the Baltic States and amount of
electricity sold by Latvenergo Group, TWh
30
26.6 27.2
25.4 26.2
25
20
15
10 Baltics
7.5 7.5 7.7
6.7
Latvenergo
5
0
2007 2008 2009 2010
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19. Electricity sold by the Latvenergo Group in the Baltics in 2010
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20. Latvenergo position in Baltic free markets (jan.-aug. 2011)
22%
Free market ~30%
Free market ~48%
87%
35%
Free market ~57%
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21. Dynamics of market customers of the Latvenergo Group in 2010
Customers purchasing electricity according to an agreement rather than at a regulated price
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22. Baltic market will be integrated in the Scandinavian market
2014
3000 MW
2016
700 MW
2
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23. Baltic electricity market design by 2015
Vision for future market design in the common Baltic
electricity market:
Nord Pool Spot Baltic with three bidding areas, but one market area
Implicit auction between Baltic countries and towards Nordic Countries on a
single trading platform
Harmonized imbalance settlement and imbalance pricing
Common reserves and balancing power market
Baltic retail market
Market place for financial trade
Target: Baltic market design is consistent with the key elements of the Nordic market design
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24. Agenda:
1. Latvenergo Group in brief
2. Electric power market of Latvia
3. Baltic market
4. Renewable energy sources
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25. Renewable energy sources in Latvenergo fuel mix, 2010
Use of primary energy sources for electricity generation
at Latvenergo AS power plants
Gas (41%)
RES (59%)
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27. The Daugava river
The Daugava is the largest river in Latvia, sourcing in Russia and flowing
through Belarus before it enters Latvia. Within Latvia it has a length of
250 km between the eastern border and the capital city of Riga where the
river enters the Gulf of Riga. The hydro-electric potential of the Daugava
has been developed by constructing low dams at three sites; Pļavinas,
Ķegums and Riga, all of which are owned by Latvenergo, managed by the
Daugava hydropower plants staff.
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28. Hydropower plants on the river Daugava (1)
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29. Hydropower plants on the river Daugava (2)
Pļaviņas HPP
number of hydro units 10
Installed capacity 883,5 MW
turbine type Francis
maximum head 40 m
lenght of the dam 4032 m
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30. Hydropower plants on the river Daugava (3)
Ķegums HPP
Ķegums HPP consists of two hydro-
power plants with the total capacity
of 264 MW, lenght of the dam -
1978 m
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31. Hydropower plants on the river Daugava (4)
Ķegums HPP -1
number of units
4
installed capacity
72 MW
turbine type
Kaplan
maximum head
14 m
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32. Hydropower plants on the river Daugava (5)
Ķegums HPP-2
number of units
3
installed capacity
192 MW
turbine type
Kaplan
(with fixed
blades)
maximum head
14 m
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33. Hydropower plants on the river Daugava (6)
number of units 6
installed capacity 402 MW
Riga HPP
turbine type Kaplan
maximum head 18 m
lenght of the dam 15400 m
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34. Other Latvenergo RES plants
Ainaži wind turbine –
installed capacity – 0.6 MW
Aiviekste hydropower plant –
installed capacity – 0.8 MW
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35. CO2 emissions per unit of electricity produced at
Latvenergo AS power plants
The overall emissions of CO2 by Latvenergo AS per unit of electricity produced in 2010 were 0.104 t
CO2/MWhel, whereas the specific CO2 emissions of the combined heat and power plants (Riga TEC-
1 and Riga TEC-2) per unit of electricity produced was 0.255 t CO2/MWhel.
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36. Regulatory framework to promote RES generation
All RES generators (except large HPP) have the rights to sell
electricity to public trader under feed-in tariff (FiT) scheme
FiTs are much higher than market price. The extra funds needed
to finance the scheme are raised from customers as RES
promoting component
To limit the rising expenses there are quota system for generators
– maximum amount of electricity to be sold at FiTs
No new quota from 2011. Plans to change promotion system
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37. RES feed-in tariffs in Latvia. No reflection to market price.
427.0
450.0
400.0
350.0
300.0
EUR/MWh
250.0
204.2
200.0
170.4 162.4
150.0
104.3
100.0
50.0
0.0
small HPP WPP BIOmass BIOgas PV
feed-in tariff market price
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38. RES market integration not a problem today
2010
2%
96% 5%
1%
1%
0%
0%
Daugava HPP small HPP WPP BIOgas BIOmass PV
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39. RES market integration solution needed in the future
18% 11% 2020
12%
1% 1%
0%
58%
Daugava HPP small HPP WPP BIOgas BIOmass PV
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40. Is there a RES market integration solution?
Feed-in premium 90
All producers are in 80
the market and 70
compete with each
60
other
50
EUR/MWh
The extra revenues
RES producers 40
needed are raised by 30
the fixed “premium” 20
paid by TSO 10
Only cost effective 0
RES PP are built RES revenues
Works good in
market price feed-in premium
Estonia
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