Industrial high-power solar parks will contribute to Latvia’s energy independence in order to reduce the impact of various external factors on the electricity market.
On hot summer days, we lack our sources of electricity production, because in summer there is little water inflow in the Daugava, and due to the low demand for thermal energy, it is less efficient to operate cogeneration thermal power plants. In these situations, solar parks will contribute to the fact that electricity prices will be significantly lower during sunny periods.
In the Baltics, there are many solar park projects started by different developers at different stages of development. Some of them are developed by professionals and experienced in energy, others by those who try their luck in a new business direction after hearing that El Dorado could be there.
The high electricity prices of 2022 raised concerns that they will remain so forever and may even increase, which is why the number of solar power plants installed in the Baltic States and elsewhere in Europe is growing rapidly. In Europe, new solar capacity reached 41.4 GWp in 2022, up nearly 50% from 28.1 GWp in 2021, according to data compiled by SolarPower Europe (SPE).
I predict that in a couple of years we will see a significant reduction in electricity prices during the sunny hours, which will be caused by the started industrial high-power solar parks in the Baltics. The first of the large parks will start production already this year, while the largest will start production in 2024/2025. year. In such changing conditions, professional representatives of the industry have advantages, who are able to provide customers with electricity even when the solar park is suddenly obscured by a cloud, and are also able to provide electricity even at night and on rainy days. Historically, Latvia lacks its own competitive sources of electricity in the summer, because at this time there is a low inflow in the Daugava, and cogeneration thermal power plants are less efficient to operate due to the periodicity of the heat energy market.
Therefore, in the future, electricity produced by the sun, together with wind stations, will perfectly complement Latvia’s electricity production portfolio and bring Latvia closer to the goal of becoming energy independent throughout the year.
Several very good incentives have been introduced in Latvia in recent years, which simplified the creation of solar parks. Even the construction of high-power solar parks does not require an environmental impact assessment, the connection reservation is also very easy, and the construction regulations are relaxed. This contributed to the very rapid emergence of new solar park projects, as a result of which most of the electricity connection capacities are reserved with solar projects, thereby discriminating against wind and other forms of electricity generation, which could use the limited connection capacities even more efficiently.
From January 1 of this year, the Public Service Regulatory Commission introduced a capacity reservation fee for electricity producers who plan to connect a new production facility with a capacity greater than 50kW. This was a long-needed step that favors market conditions so that the limited electricity connection resources are reserved only by merchants who have serious intentions and the ability to build the applied production facilities.
A similar fee for capacity reservation has been in place for a long time in Estonia and Lithuania, and we can see that it has not limited the emergence of new projects. In July of last year, a 2000 MW limit for commercial solar parks was introduced in Lithuania. We can see that in Lithuania, in various stages of development, there are many more projects created by different developers than this set limit, which means that several projects will remain unrealized. Several businessmen from neighboring countries are therefore more actively showing interest in Latvia’s high-power solar parks.
I can say that there is currently a fierce competition between the Baltic countries for who will be the first to build more solar and wind parks, thus reaching the region’s electricity saturation sooner. This means that the first commissioned projects will also export their wind and solar energy to the neighboring Baltic countries for the next 20-30 years, earning significant revenues.
On the other hand, those renewable energy resources (RES) projects that will be launched later may not be realized due to changes in the market situation. Therefore, it is essential for Latvian renewable energy developers not to compete unhealthy with each other, but to move forward together so that Latvian projects are the first to be able to sell the renewable energy produced to our neighbors in the future, improving Latvia’s earning capacity. 2022. In 2018, the number of sales contracts for solar panels and parts of solar parks concluded by the Latvenergo Group in the Baltics has increased almost 5 times, exceeding 6,200. The installed capacity of solar panels for retail customers already reached 38 MWp at the end of December, therefore Latvenergo is one of the leading providers of this service in the Baltics.
Two-thirds of the total capacity is installed for customers outside Latvia. Currently, there are already four Elektrum solar parks with a total capacity of 11 MWp in operation, while 12 solar parks with a total capacity of more than 190 MWp are in the project or construction stage, which are expected to be put into operation gradually in 2023-2025.
There is much more standardization in industrial high-power solar parks due to the use of special high-power inverters, larger panels, more efficient maintenance, etc. Thus, it is possible to achieve a significantly lower cost of produced energy. The solar and wind parks owned by JSC “Latvenergo” will be a national treasure on par with the historic Ķegum HPP. The benefits provided by them will provide the Latvian population with electricity at a lower price in the future, and the income earned by Latvenergo goes to the state.
