1. Long-term Forecasting Problems of the Latvian Energy Sector Development M. oec. E. Zeberga, Prof., Dr. habil. ing. V. Zebergs, Prof., Dr. habil. ing. N. Zeltins Institute of Physical Energetics of Latvian Academy of Science Aizkraukles St.21, Riga LV-1006, Latvia Phone: (371)7558636 or 9363105; Fax (371) 7557671 E-mail: zeltinsh@edi.lvzeltinsh@edi.lv

2. General Data (2000) Notes: 1. GDP in US$ (1995) off. – Official Bank Exchange Rate Average Per Year, 2. ppp – Purchasing Power Parities, 3. TPES – Total Primary Energy Supply, 4. /C – Per Capita 5. *1995 6. ** Final Energy Population (in million 10 6 )2.37 GDP 10 9 US$ off.7.16 GDP 10 9 US$ ppp16.8 GDP/c US$ ppp7088 TPES [PJ]157 TPES/c [PJ] x 10 -6 66 Electricity Supply [TWh]*4.93 Electricity/c [MWh]**2.08

3. Natural Resources Forests – cover 45% of the state’s territory, timber product reserves increase per year – 16.5 mill. M 3. Swamps – cover 4.9% of the state’s territory, peat bogs form 0.4% of the state’s territory. Water resources – there are more than 12,400 rivers. Longest river in Latvia– Gauja, 452 km; Largest river – Daugava, total length of 1005 km: 352 km in Latvia. 8.7% of Latvia’s territory has been classified as specially protected areas. Highest point: Gaizinkalns, 311.6 metres. Latvia’s weather is governed by a moderate oceanic climate, with pronounced cyclone activity and a considerable amount of precipitation. Summer: June - august. Winter: December - February. The average temperature in summer is 15.8°C (in the capital 16.1°C), the average temperature in winter is – 4.5°C (in the capital –3.8°c). The average precipitation amount in summer is 195 mm, in winter - 116 mm.

4. Basic Goals As it moves into the 21 st century, Latvia is clearly on a path to convergence with the EU. For Latvia, membership in the European union and NATO are not ends in themselves, but simply means to accomplish a greater goal – participation in a united Europe, whole and free. Latvia has sought membership in NATO in order to make its contribution to the formation of European security policy. In the development of Latvia’s security policies, Latvian governments have focused on regional co-operation and European integration, while building a special relationship with the united states in order to strengthen the transatlantic aspect of its security policy.

5. GDP in Year 2000 Average Prices Latvian National 1 lats (LVL) = 100 Centimes = 1,69 EUR. YearGDP bill. LatsGDP per capita (th. Lats) Inhabitant milj. people 19804.201.672.51 19854.991.932.59 19906.312.372.66 19915.522.082.65 19923.741.432.62 19933.321.292.57 19943.391.342.53 19953.361.352.49 19963.481.412.47 19973.771.552.43 19983.951.642.41 19994.061.702.39 20004.341.832.37 20014.861.982.36

6. Dinamic of GDP

7. Consumption of Energy Resources in Latvia Consumption of Energy Resources (th. tce) 1999200020102002 Energy consumption – total of which: Natural gas and liquefied gas Light fuel products&other oil products Heavy fuel, oil shale Firewood, peat, coke&other fuel Coal Electrical power (HPS, wind generators and imported from abroad) 5730 1495 1335 900 1300 120 580 5259 1560 1366 406 1267 94 566 5740 1980 1313 269 1475 123 580 6466 1847 1610 233 2084 99 593

8. Structure of TPES (2000)

9. Electricity Supply in Latvia Components of electricity supply (billion kWh) 1999200020012002 Total electricity Generation – total of which: Large scale HPP CHP Block stations&other equipment Small HPS Wind generators Import of electricity – total 6.065 4.110 2.744 1.222 0.128 0.014 0.002 1.955 5.922 4.136 2.799 1.163 0.150 0.020 0.004 1.786 6.163 4.280 2.801 1.246 0.198 0.032 0.003 1.883 6.32 3.98 2.43 1.24 0.26 0.03 0.01 2.35

10. Production Electricity by Latvian HPP YearTotal electricity consumption TWh Production of HPP TWh% 19956.23.252 19966.42.234 19976.33.556 19986.34.165 19996.13.151 20005.93.254 20016.23.150 20026.32.844

11. The Electric energy produced by the Latvian HPP

12. Latvian Primary Energy Balance (2000) (th. toe)SolidLiquidGasHydroRENsOtherTotal Production10081-2400.172-1249 Imports11411341116---2364 Exports-172-31-----203 Consumption950110411162400.172-3410 Stocks-69-----

13. Electricity Production (2000) Specification Generation [TWh]4.1 Coal- Oil0.1 Gas1.2 Nuclear- Hydro2.8 Other- Imports (+)+2.1 Exports (-)-0.3 Consumption5.9

14. Installed Capacity and Peak Demand (2000) Specification Power Stations [MW]2027 Coal- Oil- Gas515 Hydro1510 Other2 Peak Demand [MW]1226

15. Installed Power Capacity (2000)

16. Dynamic of Consumption Gas in Latvia YearBill. m 3 19902.89 19951.16 19960.89 19971.27 19981.25 19991.10 20001.32

17. Dynamic of Gas Consumption

18. The UGS Capacities in Eastern Europe [in Bill. Cubic M (10 9 M 3 )] CountryExistingPerspective Latvia2.1250 (8 UGS) Poland0.565.23 Slovakia1.604.39 Hungary1.922.52 Czech Republic20.11.20 Romania0.571.45 Slovenia0.07 Bulgaria0.60

19. Total Consumption for Heat Production (2000) Fuel% Gas65 HFO16 Wood15 Coal2 Other2 Total100

20. TPES Consumption for Heat Production

21. Dynamic of Heat Consumption in Latvia (PJ) 199019952000 DHS705531 Local402019 Total1107550

22. Dynamic of Heat Consumption

23. Emission in Latvia in Year 2000 (milj. T.) EmissionSummaryBurning energy and transport fuel CO 2 7.17.0 CH 4 0.1240.025 N2ON2O0.0040.003 SO 2 0.018 NO x 0.0380.037 CO0.2830.251

24. Emissions Dynamics in the energetics Sector EmissionUnit199019952000 CO 2 Milj. t22.910.06.9 CH 4 th.t63.729.125.1 N2ON2Oth.t1.10.3 SO 2 th.t1185918 NO x th.t1024237 COth.t499436251

25. The Maximum Limits of All the Sources of Emissions Allowed for Latvia in 2010 have been fixed by the Regulation of the Latvian Cabinet of Ministers No.33 (2002) Regulations on the total maximum allowable emissions in the air in the country:  sulphur dioxide 107 thousand tons  nitrogen dioxide 84 thousand tons  non-methane volatile organic substances 136 thousand tons  ammonia 44 thousand tons In the period from 1998 till 2000 the level of the above- mentioned emissions was significantly lower than the level allowed by the Göteborg protocol.

26. Emissions Dynamics

28. Legal Regulations : Security of Supply and Creation of Oil Product Reserves On August 14, 2001 the Cabinet of Ministers adopted the Concept on Formation of the State Oil Product Reserve. According to the Concept, a package of regulations and amendments to the current legislation had to be drafted. The Cabinet of Ministers on January 29, 2002 adopted Regulations No.40 “On Statutes of the Energy Crisis Management Centre”, on March 12, 2002, Regulations No.106 “On the procedure of energy supply and fuel sale to users during energy crisis” and on March 26, 2002 Regulations No.138 “On the procedure of creation and use of oil product stock”. On May 28, 2002 the Cabinet of Ministers adopted Regulations No. 218 “On Energy Information System”

29. Legal Regulations : electricity Sector  The Energy Policy in the sector of electricity was adopted in the Cabinet of Ministers on September 11, 2001. On the basis of the amendments to the Energy Law adopted in the Saeima on May 10, 2001, the Cabinet of Ministers on January 8, 2002 adopted Regulations No. 9 “Requirements for co-generation plants and the procedure of setting the price for purchase of excess electricity”. On January 15, 2002 the Cabinet of Ministers adopted Regulations No.28 “ On the total capacity for installations in 2002 and specific volumes of each type of electricity production, if renewable energy sources are used in electricity generation” and Regulations No. 29 “The procedure of installation and dislocation of electricity production capacities if renewable energy sources are used for electricity generation”. On December 24, 2002 the Cabinet of Ministers approved Regulations No.713 “On annual consumption of electricity to obtain the status of a qualified user in 2003”. In 2003 the status of the qualified user may be obtained by energy users with annual electricity consumption of not less than 20 million kWh per year. Draft regulations “On total volumes of capacity installation in 2003 and concrete volumes of each type of electricity production is renewable energy sources are used for electricity generation” has been developed and submitted to the Cabinet of Ministers

30. Legal Regulations : gas Sector The Cabinet of Ministers during the meeting on October 23, 2001 accepted the concept developed by the Ministry of Economics “On liberalisation of the gas market in the Republic of Latvia in connection with the Directive 98/30/EC of the European Parliament and Council “Concerning common rules for the internal market in natural gas”. The aim of the concept is to encourage competition in the area of natural gas supply in Latvia and to harmonise the regulatory documents with the requirements of the European Union. The Action Plan to implement the concept has been developed.

31. Electricity Tariffs (LVL/kWh), T ariffs Are Listed Without VAT. 1999200020012002 Average electricity sales tariff Residents, users of a united tariff Night tariff Day tariff 0.03028 0.033051 0.02574 0.03678 0.03028 0.033051 0.02574 0.03678 0.03028 0.033051 0.02574 0.03678 0.03028 0.033051 0.02574 0.03678

32. Future Energy Demand : Electricity Unit19902000201020202030 Electricity consumpti on TWh10.25.97.28.810.7 Peak demand MW16851226144017602140

33. Energy Demand

34. Primary Energy Demand Unit19902000201020202030 Primary demand M toe 8.653.744.385.025.35 PJ349157184211225

35. Future Energy Demand : General Data 2000201020202030 Population (in million)2.372.362.382.46 GDP 10 9 US$ off7.1611.316.722.4 Total Primary Energy Supply [PJ] 157184211225 TPES/c [PJ]66788992 Electricity Supply [TWh] f 4.936.057.398.99 Electricity/c [MWh] (final energy) 2.082.563.113.67

36. E lectricity and TPES Demand

37. Energy Supply of Electricity Production Electricity (TWh)19902000201020202030 Generation (total)6.74.16.698.8210.95 Coal---2.11.8 Oil1.00.1--- Gas0.91.24.2 2.4 Nuclear----4.2 Hydro4.62.82.442.462.48 Other0.2-0.050.060.07 Imports (+)+3.9+2.1+0.5 1 -- Exports (-)-0.4-0.3--0.02-0.25 Consumption (total)10.25.97.28.810.7

38. Prognoses of the Possible Technologies of Base Capacity Electric Power Stations in Latvia Electricity production technology at primary energy sources Periods 2000- 2010 2010- 2020 2020- 2030 after 2030 Natural gas + ++-- Coal-+ ++ Nuclear energy- -++ Evaluation of technological possibilities: + + very high; + high; - low; - - very low

39. Global Energy Consumption Forecast in The 21 st Century IIASA Options, Winter 1998

40. Installed Capacity and Peak Demand Not Included Reduplicate Gas Turbines in Pick Power Plant for Reservation Pick of Hydropower Planning by Low Water in 2010-700MW, 2020-900MW and in 2030-900MW SpecificationUnit19902000201020202030 Power stationMW20172027214524603750 CoalMW---300 OilMW390---- GasMW125515600 NuclearMW----600 HydroMW15021510152015301540 OtherMW-2253035 Peak demandMW16851226144017602140

41. Primary Energy Balance (Mtoe) Primary Energy Supply19902000201020202030 Indigenous Production Nuclear Hydro Other (solid fuel) Total production - 0.387 0.375 0.762 - 0.24 1.01 1.25 - 0.243 1.1 1.343 - 0.245 1.2 1.445 0.362 0.247 1.3 1.909 Imports (+) Coal Oil Natural Gas Other (electricity) Total imports 0.61 4.49 2.45 0.34 7.89 0.066 1.20 (2001) 1.09 0.18 2.72 0.07 1.40 1.63 0.04 3.24 0.49 1.60 1.69 - 3.78 0.43 1.80 1.43 - 3.66 Exports (-) Coal Oil Natural Gas Nuclear Hydro Other Total exports ------- ------- - 0.031 - 0.2 0.231 - 0.2 - 0.202 - 0.22 TPES [PJ] TPES [Mtoe] 349.02 8.65 157.08 3.74 184 4.383 211 5.023 225 5.349

42. The Proposal for Co-operation in Research Project (I) Integration of Post Transition Countries in European Free Energy Market:  Existing national and regional energy market in Central and Easter Europe  European union (EU) agenda for implementation free energy market  Integration in European free energy market  Promotion off CEE countries power system competition possibilities  Possibilities to protection national energy market

43. The Proposal for Co-operation in Research Project (II) Joint Researches of Energy Efficiency and Energy Saving Strategy of Post Transition Countries Central and Eastern Europe  Application of mathematical models for the economic and ecological assessment of the gains from efficient and rational use of energy.  Energy efficiency and energy saving in industry and the sector of public buildings, and innovative technologies for their raising.  Energy efficiency and energy saving in the sector of public buildings.  The study of the physical processes and simulation for raising energy efficiency.  Significance of the renewable and local energy resources for raising energy efficiency and the development of balanced energetics.  Economic and institutional methods and mechanisms for the management of energy efficiency and energy saving programmes.