Latvia

Index rank 43

Balance Score

ABD

Energy Sustainability Index Rankings and Balance Score

 2011  2012  2013  Trend Score
Energy Performance  39  44  51   
Energy Security  76  78  98  D
Energy Equity  53  54  54  B
Environmental Sustainability  14  18  14  A
         
Contextual Performance  52  51  43   
Political Strength  42  37  41   
Societal Strength  41  42  42   
Economic Strength  73  78  62   
         
Overall Rank  37  42  43  ABD
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Fossil Fuel Reserves

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Key Metrics

Industrial sector (% of GDP) 26.3
TPEP / TPEC  (net energy importer) 0.22
Emission intensity (kg CO2 per USD) 0.24
Energy affordability (USD per kWh) n.a.
GDP / capita (PPP, USD); GDP Group 16,717 (II)
Energy intensity (million BTU per USD) 0.14
CO2 emissions (metric tons CO2 per capita) 3.34
Population Access to Electricity (%) 100.0
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Index Commentary

Latvia falls one place in the Index, mostly due to a decline in energy security. The country faces challenges with balancing the energy trilemma similar to those that are faced by the ‘Hydro-powered’ grouping of countries, with lower levels of energy security and energy equity being counterpoints to a strong environmental sustainability performance. Latvia, which imports over three-fourths of the energy it consumes, struggles with its energy security ranking the most. Performance on this dimension declines this year as its energy consumption growth rate rises. The country performs much better on the energy equity dimension, with affordable (although not quite cheap) prices of gasoline and electricity. Latvia’s environmental sustainability performance is its best, and among the top worldwide, with low levels of pollution and minimal CO2 emissions from electricity generation. This is likely related to the fact that the majority of electricity generated in Latvia comes from hydropower. Contextually, the biggest changes are a decrease in political stability and significant improvements in macroeconomic stability.

Trends and Outlook

Latvia’s current power generation capacity, which consists of hydro power plants (HPP) and combined heat-electric generation plants (CHP), is insufficient to meet the electricity demand. To address this issue and other challenges the Cabinet of Ministers in Latvia issued the Guidelines for Energy Sector Development for 2007-2016 and defined main principles, goals and directions for the next 10 years including the goal to achieve energy self-sufficiency by 2016.

Furthermore, in 2012 the Latvian government agreed on the Latvian Energy Long Term Strategy 2030 – Competitive Energy for Society. The main goals include: 1) reduce electricity and natural gas imports from third countries by 50%; 2) increase energy production from renewable resources up to 50% of gross energy consumption; 3) provide alternatives for natural gas deliveries; 4) open electricity market in Latvia and to integrate it into the Baltic electricity markets; and 5) increase interconnection power grid capacity to increase the effectiveness of the electricity market and to reduce electricity prices.

The main challenges in Latvia will be to incentivise investments to develop new power plants and to balance the goals of increasing renewable energy generation (mainly wind) and keeping energy prices at an acceptable level to avoid negative impacts on the economy.