COMMISSION STAFF WORKING DOCUMENT Country Factsheet Latvia Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: Latvia, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 230 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet Latvia Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 229} {SWD(2015) 231 à 243}  
 
 
Towards an Energy Union  
           Latvia 

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

At 3.6% of total gross value added in 2012, the share of the energy sector in Latvia is considerably 
higher than the EU average, and has increased since 2005. In parallel, the share of employment in the 
energy  sector  in  total  employment  has  remained  broadly  constant  (from  1.3%  to  1.4%)  but  is  still 
more than twice the EU average (0.6% in 2012). 

Source: EUROSTAT – National Accounts 

According to EurObserv'ER, in 2013, the share 
indirect  renewable  energy 
of  direct  and 
related  employment  in  total  employment  of 
the  economy  in  Latvia  was  at  about  0.69%, 
above the EU average of 0.53%. 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT 

TRADE BALANCE OF ENERGY PRODUCTS 

The energy trade balance of Latvia is overall negative and around  5% of GDP. Like the EU average, 
the Latvian deficit is driven mostly by gas and oil import. Latvia has considerably reduced its current 
account deficit over the past decade. It went from a deficit of 20% of GDP in 2006 to 3% in 2014. The 
reduction  was  largely  due  to  non-energy  components,  with  energy  trade  deficit  remaining  stable 
around 5% of GDP. 

0.01.02.03.04.020052012LVEU27Value added of energy sector% of grossvalue added (total economy)0.00.40.81.21.620052012LVEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of Latvia differs broadly from the one of the EU-28, with the notable difference of a 
much  higher  share  of  renewables  and  much  lower  of  solid  fuels.  Compared  to  1995,  the  share  of 
solid fuels and petroleum products decreased (from  6.1% to 1.7% and from 42.7 to 32.4% of gross 
inland  energy  consumption-primary  products,  respectively),  while  the  share  of  renewable  energy 
sharply increased (by about 9 percentage points). The share of gases increased from 22.8% to 27.7% 
of the gross inland consumption-primary products. 

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

IMPORT DEPENDENCY 

Latvia  experiences  an  above  EU  average  import  dependency1 ratio  for  all  fossil  fuels.  Import 
dependency  is  particularly  significant  for  petroleum  products  and  natural  gas. Latvia  imports  all  its 
gas  from  Russia2.  Consequently,  the  country  supplier  concentration  index  is  very  high  and  Latvia 
experiences a significant energy trade deficit, expressed in percentage of GDP.  

1   Note: A dependency rate in excess of 100% indicates that energy products have been stocked. 
2  

Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated 
as the ratio between volumes of imports from that specific non-EU supplier and total imports  (from EU and non-EU 
countries). 

2 

-25-20-15-10-505LVEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2006 -25-20-15-10-505LVEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Latvia 

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

Interconnection capacity for 
electricity in 2014 

Source: European Commission based 
on ENTSO-E scenario outlook and 
adequacy forecast 2014 
Note:  Reference  to  2030  target  is 
based  on  October  2014  European 
Council  conclusions  stating  that 
"the  Commission  will  also  report 
regularly  to  the  European  Council 
with  the  objective  of  arriving  at  a 
15% target by 2030" 

level  of 

in  2014,  their 

The interconnection capacity for electricity with the European power 
transmission networks was only 4% in 2013 for the three Baltic States 
– Estonia, Latvia and Lithuania – taken as one entity. With the start of 
operation  of  Estlink2 
interconnection 
substantially  increased  to  around  10%  and  with  the  implementation 
of  current  and  new  Projects  of  Common 
Interest  (PCI),  the 
interconnection capacity will overachieve the 15%-target for 2030.  In 
some  cases,  the  Latvian  system  for  electricity  generation 
is 
dependent  on  external  energy  suppliers  (mainly  gas  supply  for 
cogeneration  plants).  The  three  Baltic  States  agreed  in  the  first 
quarter of 2015 on a common strategic goal: de-synchronisation from 
IPS/UPS  and  the  synchronisation  of  their  power  systems  with  the 
Continental  European  Network  in  order  to  end  the  isolation  of  the 
Baltic States, reduce the energy dependence from third countries and 
have  access  to  cheaper  electricity  resources.  The  project  of 
synchronization  is  included  as  a  key  infrastructure  project  in  the 
European Energy Security Strategy as well as is highlighted as one of 
the  key  energy  priority  areas  of  the  Baltic  Energy  Market 
Interconnection  Plan 
(BEMIP).  Several  other  PCIs  have  been 
recognized as important for Latvia: the 3rd electricity interconnection 
with Estonia, internal reinforcement of the Kurzeme ring and projects 
to reinforce transmission capacity in the North-South direction.  

As  regards  gas,  Latvia  still  depends  on  Russian  supplies.  Since  the 
Klaipeda  LNG  terminal  in  Lithuania  started  its  commercial  operation 
at  the  beginning  of  2015,  gas  from  Klaipeda  could  become  a  viable 
source for alternative gas supplies if sufficient infrastructure and the 
right  economic  conditions  regarding  the  gas  price  are  in  place.  The 
building  of  the  Poland  –  Lithuania  gas  interconnector  'GIPL'  would 
help ending the gas isolation of the Baltic States. Also 'Balticconector' 

3 

Top non-EU gas suppliers in 2013 (% in total imports)LatviaEuropean Union country[%]country[%]Russia100.0Russia39.0Norway29.5Algeria9.7Qatar6.764%56%102%100%106%116%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasLVEU28Import dependency 2013 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

and the future regional LNG projects, once operational, could play a 
role  in  diversification  of  gas  supplies  and  market  integration  in  the 
Baltic  region.  Modernisation  and  enhancement  of  the  Incukalns 
Underground  Gas  Storage  is  important  for  the  efficient  operation  of 
the joint East-Baltic regional gas market. 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power generation 
(left) and gas supply (right) (2013) (Herfindahl index – 
10000 means monopoly) 

Sources:ESTAT and European Commission Calculations 

Sources: European Commission based on ESTAT, CEER and Platts 
Power Vision 

Concentration  on  power  generation  and  gas  supply  markets  is  extremely  high.  Prices  on  the 
wholesale market in the Latvian-Lithuanian price zone remain on average higher than in Estonia and 
Finland and less stable. The Estonian-Latvian connection is still heavily congested. By end-2015 the 
situation is likely to improve as Nordbalt, the Swedish-Lithuanian interconnector, will be completed.  
Full electricity market opening took place on 1 January 2015. Some 0.5% of households had switched 
their electricity provider at the beginning of 2015,  the switching rate for non-household customers 
was 15% at the end of 2013.  
On the retail gas market,  Latvijas  Gāze JSC remains  the only player. Switching supplier is therefore 
not an option. Latvia's emergent gas market exemption expired in 2014 and the respective market 
opening legislation is being gradually adopted in view of achieving full compliance with the 3rd Energy 
Package (in particular  ownership unbundling of gas transmission and storage  system operator by 3 
April 2017).  
Domestic  retail  prices  are  below  EU  average  for  both  electricity  and  gas.3 A  wide-scale  roll-out  of 
electricity  smart  meters  is  being  carried  out.  Latvian  consumer  assessment  of  the  performance  of 
their retail electricity market in 2013 was more than 3 points below the EU average, corresponding to 
21th place EU-wide. The retail gas market is assessed somewhat above the EU average.4 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

Inflation of consumer prices has decreased importantly in Latvia compared to the pre-crisis period. 
In Latvia and in the rest of the Euro area, oil prices have declined in 2014, driving overall inflation 
at historically low levels. 

Source: Eurostat (http://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_price_statistics) 
10th Consumer Markets Scoreboard (June 2014), 

3  
4  
 http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm  

4 

 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Latvia 

Source: DG ECFIN based on Eurostat 

VULNERABLE CONSUMERS 

Based on a EUROSTAT survey on income and 
living  conditions,  three  proxy  indicators  are 
used to assess fuel poverty. They indicate a 
potentially  serious  issue  for  Latvia,  well 
above  EU  average.  However,  unprivileged 
social  groups,  families  with  3  or  more 
children,  families  in  care  of  a  child  with 
disabilities  and  persons  with  disabilities 
(around  170.000  persons)  are  classified  as 
vulnerable  consumers  and  will  continue 
benefiting from a fixed price for electricity.  

 Source: European Commission, based on on EUROSTAT SILC survey 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(5.4 Mtoe primary energy and 4.5 Mtoe final energy) 

an 

primary 

increase 

expressed 

Latvia’s  2020  energy  efficiency  target  is  5.4 
energy 
in 
Mtoe 
consumption  (4.5  Mtoe  expressed  in  final 
energy  consumption).  The  national  target 
for  primary  energy  was  set at  a  level  which 
allows 
energy 
for 
in 
consumption.  Even 
if  Latvia's  current 
primary  energy  consumption  (4.4  Mtoe  in 
2013)  is  below  its  2020  target,  it  could 
continue its current efforts regarding energy 
efficiency  to  keep  the  primary  energy 
consumption at this level or increase it only 
slightly that it will reach its 2020 target even 
if  the  economy  continues  to  grow  in  the 
next five years.  

 Source:  European  Commission,  based  on  EUROSTAT  and  on  national 

energy efficiency targets as declared by the MS under the EED 

5 

-50510152020052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsLatvia : Price evolution & the contribution of energy prices-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEA : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

ENERGY INTENSITY 

Energy intensity in Latvia has decreased since 2005, although it remains above the EU average. A high 
energy  intensity  is  also  recorded  in  the  industrial  sector,  which  also  shows  an  increasing  trend.  A 
legal  framework  is  currently  being  prepared  to  establish  the  obligations  for  increasing  energy 
efficiency in the industrial sector, including with financial support from the EU Cohesion policy funds. 

Primary energy intensity of the economy   

Final energy intensity in industry 

Source: European Commission based on  EUROSTAT 

Source: European Commission based on  EUROSTAT and European 
Commission/AMECO 

Energy consumption by households is above EU average and decreased at a slower pace than the EU 
average  since  2005.  This  could  be  a  sign  of  untapped  potential  in  energy  savings  in  the  residential 
sector. Specific energy intensity in passengers transport is lower than EU average. The specific energy 
intensity for freight transport is also much lower. 

Final  energy  consumption  per  m2 
residential sector, climate corrected 

in 

Specific  energy 
transport5  

intensity 

for  passenger  cars  and 

freight 

Source: European Commission based on  Odyssee 

database 

Source:  PRIMES  model  background  data  and  estimations  based  on  EU 
Commission and EU MS inputs   

EU  legislation  sets  mandatory  CO2  emission  reduction  targets  for  new  cars  and  vans.  By  2021,  the 
fleet average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet 
average is set at 147 g/km by 2020. 

5  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Latvia 

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27. 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by 
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro. In Latvia, as 
in the other Baltic States, rail is widely used in international freight transport.  

Modal share of Latvia 

Source:  Eurostat  and  EU  transport  in  figures  2015.  Data  refers  to  2013.  Modal  shares  based  on  tonne-kilometres  for  freight  sector  and 

passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
(+17% by 2020 as compared to 2005 in the non-ETS sector) 

In  2014  emissions 
compared 
approximated data). 

to  2005 

increased  by  3%  as 
(based  on  2014 

to 

the 

According 
latest  projections 
submitted, Latvia is expected to increase its 
non-ETS  emissions  by  7  %  in  2020,  so  its 
target would be achieved by 10 percentage 
point. 

Source:  European  Commission    based  on  EEA.  Based  on  preliminary 
inventory data. 

ESD (Effort Sharing Decision) emissions are the emissions from sectors not 

covered by the EU ETS. 

Emissions 

Non-ETS 
(vs. 2005) 
Projections with 
existing measures 
2020 
Proxy 2014 

Projections/proxy 

target 

7% 

3% 

17% 

9.5% 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

RENEWABLE ENERGY SHARE TARGET 2020 (40%) 

Latvia has a 2nd highest renewable energy share in 
the  EU  after  Sweden.  With  a  renewable  energy 
share of 37.1% in 2013, Latvia is on track to reach 
its 40% target in 2020. However, the 3.1% share of 
renewable  energy  in  transport  (2013)  was  well 
below  the  necessary  progress  to  reach  the  10% 
renewable  energy  target  in  transport  by  2020. 
Legal  uncertainty  surrounding  the  renewable 
energy  support  system  delays  investments  in  this 
sector.  

Source: European Commission based on  EUROSTAT 

GREENHOUSE GAS EMISSION INDICATORS 

• 

• 

• 

• 

• 

In  2012  the  share  of  emissions  from  the  energy  sector  is  significantly  lower  than  the  EU 
average as the result of the high use of renewables in the energy mix.  
Transport and agriculture account for the largest proportions of Latvia's overall greenhouse 
gas emissions (even though in the case of transport vehicle registration tax is linked to CO2 
emissions, new cars in Latvia had the highest CO2 emission per km in the EU in 2013). 
The share of non-ETS emissions in Latvia is 76% of total GHG emissions in 2013, being much 
higher than the EU average. 
Latvia has the lowest GHG emissions per capita of the EU in 2013, being almost 40% lower 
than the EU indicator.  
In 2014 the revenues from the auctioning of ETS allowances amounted to EUR 10.2 million. 

Largest Sectors of GHG 
Emissions in 2012 (*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & 
fishery) 

Residential & Commercial 

Waste & others 

Latvia 

EU 
Average 

18% 

25% 

15% 

25% 

11% 

6% 

33% 

20% 

19% 

12% 

13% 

3% 

(*)Sect
oral 
breakd
own for 
2013 
data 
not 
availab
le. 

GHG Emissions 

Latvia 

EU 

EU ETS auctioning revenues 
in 2014 (EUR millions) 

Share of ETS emissions in 
2013 

GHG emissions/capita in 
2013 (tCO2equivalent) 
Carbon intensity of 
economy in 2013 
(tCO2equivalent/EUR 
millions) 

10.2 

3205 

24% 

42% 

5.4 

8.5 

533 

328 

Source: European Commission  based on EEA 

ENERGY & TRANSPORT TAXATION 

Energy and transport related taxes as a share of GDP are around the EU-average and have declined 
only  slightly  since  2005.  The  composition  of  revenue  is  broadly  comparable  to  the  EU  average  for 
vehicles and fuel, whereas it is well below for heat and electricity. 

8 

 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

Source: Eurostat 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

Latvia  invests  a  significant  share  of  its  public  R&D  support  in  the  field  of  energy  and  environment. 
However,  this  may  not  necessarily  translate  in  innovation,  as  in  terms  of  intensity  of  low-carbon 
technologies patents, Latvia is much behind the EU average and main worldwide partners. 

Source: European Commission based on  EUROSTAT   

COMPETITIVENESS 

Real unit energy costs (% of value added) 

The  real  unit  energy  costs 6  are  considerably 
higher  in  Latvia  than  in  the  EU  or  the  US, 
reflecting  the  level  of  energy  intensity7 and  real 
energy  prices.  Real  energy  prices  have  also 
increased in Latvia over the past ten years.  
Observing  prices  paid  by  industrial  customers, 
electricity  prices  are  slightly  below  EU  average 
while gas prices are below the average. 

Source: European Commission 

6  
7  

This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 
The  energy  intensity  presented  here  is  derived  from  Use  Tables  of  WIOD,  see  "Energy  Economic  Developments  in 
Europe SWD(2014)19". 

9 

0.01.02.03.0LVEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.0LVEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity19.19.58.225.813.28.825.813.78.0051015202530LVEU27US200020092011 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Latvia 

Source: European Commission based on EUROSTAT and IEA 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY  

  The  current  Latvian  energy  and  climate-related  policies  are  contained  in  the  medium-term 

planning document "National Development Plan 2014-2020", covering up to 2020. 

  The  main  energy  targets  for  the  post-2020  period  are  contained  in  the  "Sustainable 
Development Strategy of Latvia until 2030". This document has been supplemented in 2013 
by  the  Latvian  Energy  Long-term  Strategy  2030  ("Strategy  2030")  which  includes  energy-
related  targets  and  planned  policy  measures,  though  amendments  in  declared  2030 
indicative  targets  could  result  from  forthcoming  Energy  development  guidelines  for  2015-
2020.  The  Ministry  of  Economics  plans  to  transpose  the  goals  and  principles  set  by  the 
Strategy into subsequent laws, regulations and planning documents. Latvia is also preparing 
a low-carbon development strategy.   

  The Environmental Policy Guideline 2014-2020 is a medium-term planning document, which 
inter  alia  sets  the  policy  targets  on  climate  change  mitigation  and  defines  the  necessary 
measures to solve the stated problems within the GHG emission reduction. 

  One  of  the  objectives  of  the  Latvian  Strategy  2030  is  the  enhancement  of  energy  security. 
The Strategy foresees that this should be achieved by ensuring accessible and stable supply 
of energy, by diversifying sources and suppliers and by developing infrastructure. 

NATIONAL TARGETS, especially for 2030 

Objective, 2030-2050 

Targets 

GHG reduction  

Yes 

Renewable energy  

Energy 
savings 

Efficiency 

/ 

Partly 
(indicative 
objective) 

Partly 
(indicative 
and 
housing 
only) 

Comments 
45% GHG emission reduction in 2030 compared to 1990 
levels;  reduction  of  GHG  emission  intensity  of  the 
economy to 1.13 by 2020 and to 1.07 by 2030 
Indicative objective of 50% share of renewables in final 
energy  consumption  by  2030  has  been  mentioned  in 
the  Latvian  Energy  Long-term  Strategy  2030  (strategic 
guidelines  for  policy  makers),  mainly  involving  the 
heating,  electricity  and  transport  sector,  however  this 
target has not yet been agreed at political level.  
Similarly  as  for  renewable  energy,  the  Strategy  2030 
indicates a potential for achieving a reduction of energy 
intensity of manufacturing industry and average annual 
heat  consumption  in  housing  and  public  buildings, 
which could be brought down to 100kWh/m2 by 2030.  

10 

 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

7. Regional cooperation 

EU  Member  States  cooperation  in  the  energy  sector  in  the  Baltic  Sea  region  has  brought  many 
benefits  for  the  participating  countries.  The  work  and  achievements  within  the  framework  of  the 
Baltic  Energy  Market  Interconnection  Plan  (BEMIP)  agreed  in  June  2009  and  with  subsequent 
amendments  in  2011  and  2013  respectively  proved  that  enhanced  regional  cooperation  can  be  a 
catalyst for positive developments both in energy infrastructure projects or market related aspects. 
During  the  first  half  of  2015  the  regional  cooperation  framework  in  the  Baltic  Sea  Region  was 
reformed by  bringing together two initiatives  – BEMIP and EU  Strategy for Baltic Sea  Region Policy 
Area Energy (EUSBSR PA Energy) in order to improve the macro regional cooperation.  The MoU on 
reinforced  BEMIP  was  signed  on  8  June  2015  with  the  overall  goal  to  ensure  further  market  and 
system integration of the Baltic States into European Continental network and ensure its full market 
functioning also strengthening the organisational structure of the BEMIP. The new MoU and the joint 
BEMIP / EUSBSR PA Energy Action Plan also foresees regional cooperation in key energy policy areas, 
including  electricity  and  gas  markets,  security  of  supply,  power  generation,  renewable  energy  and 
energy efficiency. 

The TEN-E Regulation and the Projects of Common Interest (PCI) process have also been addressing 
the  need  for  strong  regional  cooperation  through  the  establishment  of  priority  corridors  and  the 
activity  of  the  Regional  Groups.  For  the  Baltic  Sea  region,  the  work  is  undertaken  within  the 
respective BEMIP Regional Groups for electricity and gas.  

Additionally,  Regional  Gas  Market  Coordination  Group  was  established  on  February  12,  2015  to 
facilitate  creation  of  the  effectively  functioning  regional  gas  market,  consisting  from  the 
representatives of the ministries responsible for energy policy, the national regulatory authorities of 
the energy sector and the operators of the key gas infrastructure in the Baltic States and Finland. 

8. Cohesion policy contribution 

The EU Cohesion policy provides for important investment possibilities to implement energy policy 
objectives in Latvia which will be complemented by national public and private co-financing, aiming 
at  optimal  leverage.  It  also  ensures  integrated  territorial  solutions  to  challenges  by  supporting 
capacity  building,  technical  assistance  and  territorial  cooperation,  including  the  Baltic  Sea  Region 
macro-regional strategy in which Latvia takes part. 

Internal Energy Market: Over 2014-2020, EU Cohesion Policy will invest some EUR 41 million in smart 
energy infrastructure in relation to local gas and electricity connections for enterprises in industrial 
zones and connections of degraded territories to main networks of engineering communications of 
the city.  

Energy  efficiency:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  338  million  in  energy 
efficiency  improvements  in  public  and  residential  buildings  and  in  enterprises,  as  well  as  in  high-
efficiency  cogeneration  and  district  heating  in  Latvia.  A  further  estimated  EUR  651  million  will  be 
invested in supporting the move towards an energy-efficient, decarbonised transport sector. These 
investments  are  expected  to  contribute  to  around  14  000  households  with  improved  energy 
consumption classification and a decrease of around 50 100 000 kWh per year of decreased primary 
energy consumption of public buildings, as well as to around 1000 km of reconstructed or upgraded 
railway lines and 10 km of new or improved tram lines. 

11 

 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Latvia 

Decarbonisation: Overall, the EU Cohesion Policy investments in Latvia over 2014-2020 are expected 
to  contribute  to  an  estimated  annual  decrease  of  GHG  of  around  63  000  tonnes  of  CO2eq.  Over 
2014-2020, EU Cohesion Policy will invest some EUR 27 million in renewable energy in Latvia. These 
investments are expected to contribute to around 40 MW of additional capacity of renewable energy 
production. 

Research,  Innovation  and  Competitiveness:  Over  2014-2020,  EU  Cohesion  Policy  will  invest 
significantly in R&I and in SME competitiveness in Latvia. This will be based on the national strategy 
for smart specialisation. For Latvia, the strategy includes a focus on smart energetics. At this stage, 
the allocations foreseen for investments in R&I and adoption of low-carbon technologies in Latvia are 
not  specified,  but  should  become  available  in  line  with  the  evolving  content  of  the  smart 
specialisation strategy. 

12