The first trading session will be held in the biomass trading platform created by the Latvian company “BioEx” for the heat supply, cogeneration and production sectors, representatives of “BioEx” informed.
The biomass trading platform was established last December. As company representatives explain, the platform will serve as an online tool for everyone who uses biomass in Latvia – from producers and traders to heat supply and cogeneration companies. The aim of “BioEx” is to bring together all important Latvian energy and forestry companies that use biomass in their operations on the new platform. Registration of market participants started on the platform from December 12, but the first trading session is scheduled for today.
The “BioEx” platform will work similarly to the world’s online raw material exchanges – market participants will be able to buy and sell biomass products in open, regular and fully transparent trading sessions, where the best current price and delivery conditions for biomass, such as wood chips, will be determined. Safe payments for the platform will be guaranteed and the function of transaction execution agent will be provided by the strategic partner of the platform JSC “Industra Bank”.
“BioEx” representatives indicate that the total consumption of wood chips, which is a type of biomass, in Latvia during the year is about eight million megawatt hours (MWh), which is about 320 million euros. The primary goal of the “BioEx” platform is to ensure trade efficiency, which will bring significant benefits to Latvian heat supply and cogeneration companies, municipalities, biomass producers, as well as heat and electricity consumers – Latvian residents.
The company’s board member Gunārs Greiža explains that all participants of the biomass market – from municipal boiler houses to pellet manufacturers – currently conduct transactions and implement purchases in a fragmented, non-transparent market where there is no transparent information about supply and demand. “This is a market where there is significant potential for increasing efficiency,” says Greiža.
According to Economy Minister Ilze Indriksone, the introduction of the biomass trading platform is an important step in the regulation of the Latvian energy market, especially in the area of heat supply.
She emphasizes that an open trading solution available to all participants will bring practical benefits to the energy end consumers of Latvia, namely the population, as the new trading platform will ensure fair competition between buyers and sellers and, accordingly, the best possible conditions. “It should be noted that a large number of heat supply companies in Latvia are connected to municipalities that directly serve the residents of their region. The new trading platform will give these municipalities confidence that their biomass purchases are made as efficiently as possible,” says Indriksone.
There are several hundreds of participants in the biomass market in Latvia, for example 62 regulated heat supply companies that produce heat from biomass and at least the same number of producers that are smaller and do not meet the requirements of the regulated market, but actively participate in the market. Also, there are around 50 manufacturers of pellet production, biomass export and other wood industry industries in Latvia, where the basic raw material is biomass. In addition, several hundreds of biomass producers, transporters and holders of biomass, which are actually every forest and agricultural land owner, make up the market.
Valdis Vītoliņš, member of the board of the Association of Latvian Heating Companies and chairman of the board of SIA “Jūrmalas siltums”, says that the new platform was created with the aim of providing an opportunity to quickly and reasonably assess what is currently an appropriate market price and the quality of the offer.
“The task of our companies is to offer users continuous, safe and high-quality services at a price corresponding to economically justified costs, and this platform will probably give confidence that raw materials are purchased as efficiently as possible,” states Vītoliņš, emphasizing that it is important that the mentioned IT the instrument would also ensure the successful operation of small and medium woodchip supply companies under conditions of free competition.
Currently, the first version of the implementation of the “BioEx” platform will already provide registration of market participants, distribution according to qualification criteria, trading sessions, delivered biomass quality and settlement reports, biomass energy calculation calculator, system support, guarantee management and other functions necessary for effective transaction management.
“BioEx” was registered in April this year and its share capital is 100,000 euros, according to “Firmas.lv” information. The largest owner of “BioEx” is SIA “EcoHeat Holdings”, which owns 75% of the shares, while 25% of the shares belong to “Forty Seven Limited”, registered in Great Britain.
