This year, the energy crisis has given a new impetus to develop new natural gas supply routes much faster and to stop buying gas from Russia, but next year too, the determining factor in the market for energy resources will still be the prices of natural gas and everything that happens around it, AS “Latvenergo” Electric Energy Market Review says the company’s board of directors chairman Mārtiņš Čakste.
He explains that the topic of energy in 2022 is very relevant all over the world, and many places are facing the increased demand for energy resources, which was affected by the war started by Russia in Ukraine, and a very high escalation of energy resources prices have been experimented. Therefore, this year constitutes a significant turning point in the energy sector in Europe, the Nordic countries and the Baltic countries, in order to ensure their country’s energy independence and security of energy supply. Transactions with Russia have been halted this year, so the purchase of energy resources is offset by transactions in other countries and regions, Čakste says.
The head of “Latvenergo” emphasizes that the energy crisis of 2022 has given a new impetus to develop new natural gas supply routes much faster and to stop buying gas from Russia. Significant progress has been made in the Baltics and alternatively an intensively developed liquefied natural gas (LNG) infrastructure, such as the Inko LNG terminal in Finland, the capacity of which is expected to be equal to the capacity of the Klaipėda LNG terminal, it is an irreplaceable boost to the sufficiency of the energy supply.
“However, we have to expect that natural gas prices and everything happening around it will continue to be the determining factor in the energy resource market next year as well. After the increase in electricity prices this summer, especially in August, October and November, there is a decrease in them, which is connected with the decrease in gas prices, natural gas deposits have been created that have sufficient reserves, as well as warmer climatic conditions, have allowed to save this resource in the autumn period. mid-December, there are already changes in the prices of energy resources, so an increase in the price of electricity can be observed,” says Čakste.
Explain that the price of electricity for the coming winter months will be influenced by seasonal factors, the influence of which is always of great importance in this period. If there is a cold winter, energy consumption – both electricity and gas – will increase, so it will be important to have generation capacity available that can meet this demand. Furthermore, an increasingly important influencing factor in our region is the development of wind power, which has a rapid impact on the price of electricity for all users.
As Čakste points out, in the territory of Latvia and the Baltic in general, there are opportunities for offshore and onshore wind farms, which represents very good potential for their competitive production. He explains that it is an opportunity to put more emphasis on solar and wind energy in order to reduce the shortage in the Baltics as soon as possible and replace about 40% with cheap and new generation, which would allow prices to fall of exchange.
The chairman of the board of “Latvenergo” characterizes this year in the energy sector with milestones in the development of new generation capacity. He says that “Latvenergo” and JSC “Latvijas valsts meži” established the national company SIA “Latvijas vēja parki” in the summer to strengthen energy independence and make production greener in the long term. It is planned to build wind farms with a total capacity of at least 800 megawatts (MW) by 2030. On the other hand, in September, “Latvenergo” and the world leader in the field of renewable energy resources, “RWE”, signing a memorandum cooperation, have joined forces to develop, construct and operate offshore wind projects off the coast of Latvia. “Thus, we will be able to both learn and use ‘RWE’s’ long-term experience in offshore wind farm development, successful project implementation and safe operation,” says the company director .
“This year, perhaps also for the first time, we see that saving electricity has become really important, and both businesses and residents are looking for ways to reduce energy consumption. “Latvenergo” is also reducing the consumption of lighting and heating for We see that even among households, due to rising prices, consumption is decreasing,” says Čakste.
He expresses that in the field of electromobility “Latvenergo” operates according to the situation and market demand, looking for new and new manifestations of development. “Latvenergo” decided to create a charging network before a full-fledged electromobility market is formed, therefore, charging services are under development and 500 charging stations are already planned for 2023. “Latvenergo” predicts that in 2030, when many automakers move away from fossil fuel engines, growth will be quite rapid.
“We are preparing and at this point we will offer charging infrastructure, also, wind and solar farms will be built by then, so the electricity price will be better for electric car users,” says Čakste.
He further explains that the market for wind and hydrogen industry is developing due to the rapid growth in demand, which is driving innovation.
“Wind turbine technologies are becoming more powerful, but hydrogen technologies are becoming more affordable. This is a significant milestone for the entry of energy storage technologies in Latvia as well. We see the first successful projects have been implemented in European countries, such as the Apex Group’s green hydrogen project near Rostock, which was recently built next to the solar park, and the produced green hydrogen is supplied to the warehouse elevators. The Apex Group experience shows that after the implementation of the first project, the interest of other companies to also buy green hydrogen appeared quickly,” says Čakste, adding that “Latvenergo” is also planning to implement a hydrogen pilot project.
