RIGA - Given last year's geopolitical turmoil, the energy market in Europe has recovered well, Reinis Aboltins, an energy market analyst at the Public Utilities Commission (regulator), said at the conference "Energy Security: policy, markets and transition processes" today.
He said that, for example, gas prices have now returned to about the same level as two years ago.
Aboltins also stressed that although the impact of Russia's war in Ukraine on the energy market in Europe had normalized, there were still risks to be taken into account.
"The global community has finally figured out what to do about the risks," said Aboltins, adding that national and international energy planning documents, which foresee a phasing out of energy imports into Europe, will play a major role in the future.
Commenting on this year's energy price forecasts, Aboltins said that making predictions at this stage is difficult, but it is clear that the prices will be affected by several factors, including the diversification of liquefied natural gas (LNG) imports in Europe, as well as a reduction in imports from Russia.
As Aboltins noted, three countries in Europe are currently importing natural gas from Russia.
Meanwhile, Rota Snuka, a member of the Public Utilities Commission's Council, told the conference that high energy prices are the result of extraordinary events, not market flaws.
"If electricity prices are low, consumers are happy, if prices are high, producers are happy. Unfortunately, policy makers are left with the need to keep energy affordable and the price reasonable," Snuka said.
She also noted that in Latvia last year, government aid in the energy sector was mainly provided for short-term mitigation.
Snuka stressed that aid measures in the energy sector should be temporary, transparent and terminable in order to avoid distortive effects on the energy market.
Liga Kurevska, State Secretary at the Climate and Energy Ministry, said during the discussion that she was proud of the Baltic countries' ability to move away from energy imports from Russia in a short period of time.
She stressed that the Baltic states aim to achieve electricity independence and to export electricity to other EU countries.
Martins Cakste, CEO of Latvenrgo energy group, said that the Baltic states currently import around 12 terawatt-hours (TWh) of electricity, the price of which is mainly determined by processes in the Netherlands and Germany.
At the same time, he noted that it is difficult to predict the future electricity price dynamics, as it is influenced not only by the aforementioned countries, but also, for example, by Finland, which is about to start offering electricity exports.
Cakste also said that Europe's intention to switch to renewables requires a long-term approach, as such plans require sizable investments, which in turn entail a fair amount of risk for the investors.
The estimated investment needed for Europe to switch to renewables through the REPowerEU initiative is more than EUR 100 billion per year, according to Cakste.