WHY TO PROMOTE LOCAL ENERGY RESOURCES? 1 LAEF Latvia Renewable Energy Federation Riga, June 18, 2015

2 LAEF in brief LAEF – Renewable Energy Federation of Latvia is representing the joint interests of associations of local energy resources, including the following sectors: Production of biomass, wood chips and pellets Energy production in biomass CHP plants and electro stations Energy production in biogas plants Small hydro plants Sun energy Wind energy LAEF is targeting to grow and enlarge the sector of industries representing local fuels in Latvia by: Peat (production of peat), bio-fuel, biodiesel The target activities in 2015: Facilitate legislative initiative to promote utilization of renewable resources. Educating society and decision makers on the significance of renewable resources LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija

LAEFLAEF Latvia renewable energy targets

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Renewables in heating sector

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Biomass CHP`s versus total Fuel typeNumber of CHP`s Installed electrical capacity, MW Number of CHP`s % Installed electrical capacity, % Natural gas %91% Biogas %4% Biomass %4% Coal, oil13 0.6%0.2% Total Jelgava Bio CHP Installed capacity, MW 123 Source: Central Statistical Bureau, year 2013

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija 1. Global fight for resources is till on; 2. Resources are available within local jurisdiction; 3. Energy and financial cycle during production closes within the country borders; 4. Side effects – employment, production of equipment, transfer of technologies, possibilities for education and science; 5. The price for wind, sun and hydro is zero; 6. Basis for sustainable economic development and technological progress. Why RES in energy industry?

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Renewable resources provide lower heat prices

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Variable costs define power price in the longterm (*): Hydro, wind and sun = 0€/MWh RES = 5€/MWh Gas CHP = 40€/MWh When Germany started to use local/RES, electricity prices started to decline Renewable energy – does Latvia need it ? * bank Credit Suisse"Utilities Big Book"

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Renewable energy – does Latvia need it ? Energy self-sufficiency; In LV the dependence on foreign providers and prices is 56%: milj. EUR Daily balance in 2013: Costs on imported fossil fuels -17,3 MEUR/day Earnings from wood exports +3,1 MEUR/day

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Wood resource Energy self-sufficiency; Latvia has all the conditions to be 100% self-sufficient: 55% of the territory are covered by woods 10M m3 of wood chips remain in forests annually 8M m3 of wood chips are exported annually

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Wind potential Energy self-sufficiency: Latvia has all the conditions to be 100% self-sufficient: «Kurzeme Circle» provides a possibility to connect a wind plant of at least 500MW The potential of Latvia’s land winds is at least 1000MW

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Use of farmlands Energy self-sufficiency Latvia has all the conditions to be 100% self-sufficient : ha of farmlands in Latvia are not cultivated 1MWe Biogas plant requires 500ha

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Workplace creation New workplaces in regions and orderly environment: Output of local resources, transport, construction, infrastructure, maintenance, service sector New workplaces per installed 100 MW capacity for different technologies in Latvia Source: Institute of Physical energy of the Academy of science

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija New workplaces in regions and orderly environment New workplaces under the national RES 2020 target* The RES Policy of the Republic of Latvia according to the Directive 2009/28/EK from April 23rd, 2009 of the European Parliament and Council on promotion of RES utilization that are annulling implementation of the Directives 2001/77/EK and 2003/30/EK by 2020 Source: Institute of Physical energy of the Academy of science

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Using local resources comes to an end within national borders

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Reduction of support

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Electricity in Latvia is neither the cheapest nor the most expensive for average households in the EU

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Electricity bill of a small industrial enterprise in Latvia

LAEFLAEF Latvijas Atjaunojamās Enerģijas Federācija Climate and energy efficiency targets has to be the key objectives when considering new investments Low gas and electricity prices are slowing down fuel diversification and investments in electricity production, however those objectives remain relevant Several retroactive legislative changes took place in recent years, what has damaged the investment climate and investments already made Well targeted, clear local policy decisions and support mechanisms are urgently required LAEF is currently working on the development on new law supporting use of local fuels Key takeaways

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