RIGA - The modern sources of energy production are varied, but all energy that we use ultimately comes from the sun, the moon or the earth. Solar energy drives the global climate and eco-systems, creating biomass, hydroelectric, solar heating and solar lighting power. The moon's gravitational energy gives rise to tidal power, which is responsible for tidal effects. The earth is the main source of gravitational, chemical and geothermal powers.
Global energy production is based on a diverse mixture of energy sources. Renewable energy is generated from natural sources (sunlight, wind, tide), which are naturally replenished. Globally, less than a quarter of energy production comes from renewables, with the largest share originating from biomass (biomaterials derived from living organisms, such as trees). Hydroelectricity, wind, solar and tidal powers also contribute to global energy production and consumption.
Latvia relies on several types of energy production. Currently, the effects of the global economic downturn has resulted in lower electricity consumption than in previous years, but industry experts believe that the pre-crisis demand levels will be restored within the next five years.
The country has recognized the need for satisfying growing energy demand, diversifying available energy sources and increasing safety of energy supply. Even though renewable sources of energy constitute less than one quarter of the total energy share in the country, there is an impressive scientific potential for power generation based on hydro, wood and wind resources.
The total amount of energy production sources in Latvia can be broken down to oil products, renewables, gas, peat and other fuels. Since July 1, 2007 electricity consumers in Latvia have been able to choose among approximately twenty suppliers that are authorized to sell electricity in the local market. Lithuanian and Estonian producers can also enter and operate in Latvia.
Hydroelectricity is generated by the gravitational force of falling water. It is the most popular form of renewable energy worldwide. According to the report 'Small Scale Hydropower in Latvia: Background Information And Analysis' by the prominent Latvian scientist Karlis Silke, Latvians began to use hydro energy as early as the thirteenth century, when it was produced to mill grains, facilitate woodworks, then later for paper and cardboard production. In 1876, two hydro turbines were installed in the country.
They produced electricity for lighting factory facilities and to facilitate the manufacturing process. About a quarter century later the first small-scale hydropower plant was built in Latvia. In 1938, over 600 watermills were using water turbines to produce flour, lumber or textiles. By the middle of the 20th century, dozens of hydropower plants (HPPs) provided substantial amounts of electricity all over the country. Small scale HPPs have been constructed in Liepaja, Daugavpils, Valmiera and other regions of Latvia. Currently the country has three large-scale HPPs and over 100 small-scale facilities. The three largest HPPs are located in Kegums, Riga and Plavinas, spanning the Daugava river; Plavinas is the largest hydropower plant in the Baltic states in terms of production capacity.
Latvia has high potential for wind power development. Wind farms convert wind energy into electricity, and currently approximately 2 percent of worldwide electricity is produced by wind turbines. By the end of 2008, over 70 countries globally used wind power for commercial purposes, with Denmark and Portugal taking the lead. Latvia is well poised to benefit from the strong wind patterns blowing along the Baltic sea coastline. According to estimates by the Renewable Energy Program, the country can potentially generate wind energy output of over 1,277 GWh. Wind energy output currently produced in the country amounts to approximately 25 MW. As stated in the Latvian Wind Energy Guide, the Energy Law obligates electric company Latvenergo, the main energy operator in the country, to purchase production output from wind power plants as well as from biomass recycling plants including wood and peat, biogas, sun, sea tides and geothermal energy, for the competition price or the price established by the regulator.
Wood is the most popular local renewable energy source. Forests cover almost 3 million hectares, or 42 percent of Latvia's total land area. In the speech that Latvian Minister of Agriculture Martins Roze gave in 2007, he underlined that there are about four million cubic meters of firewood in Latvia, which could potentially produce 5.4 GW of thermal energy annually. Wood is widely used in the regions for heat generation, and a lot of houses in Latvia's countryside are still relying on their wood-burning stoves to keep families warm in winters. However, the extensive wood and wood product export can potentially drive up prices and make this energy source less affordable for the typical rural family.
As early as 2007, the Latvian Environmental Ministry has been preparing its Biogas Production and Utilization Development Program for the years of 2007-2011. Biogas, a type of biofuel, is produced by breaking down organic matter in the absence of oxygen, which can then be utilized for energy production. It can also be used as a fuel for vehicles and is utilized in this capacity in Switzerland and Germany. Roze has underlined that biogas producers are receiving state support that is increasing from year to year. The producers of bio-crops have also been benefiting from European Union aid in the past years.
According to the State Geological Survey, peat covers 9.9 percent of Latvia's territory. However, at the present time peat is mostly used in Latvia for agricultural needs. Worldwide, peat is being used for a wide variety of purposes, not only in agriculture, but also in energy production and industrial manufacturing. Nowadays only approximately 15 percent of peat resources in Latvia are used in heat production, which constitute an insignificant share of the country's energy consumption (to compare, 10 percent of Ireland's energy supply comes from local peat lands).
However, the demand for energy on the domestic market cannot be met through alternative sources only. Industry analysts forecast that Northern Europe will experience electricity supply shortages around 2020-2030. The forecast surge in power consumption, as well as power plant maintenance work that will be necessary going forward, will create the need to plug the supply/demand gap not only in Latvia, but in every country in the European Union. The construction of a power plant in Latvia could be a solution that would address the upcoming growth in energy consumption, but massive investment associated with the project and high operational costs of such facilities present a number of challenges that will have to be overcome.
Presently Latvenergo is the main supplier of mainstream energy in Latvia. The company's activities branch out to electricity generation and trade as well as IT and telecommunications services. According to the company's Web site, its power plants generate more than half of the electricity consumed in Latvia. Close to 70 percent of the electricity generated by the company comes from renewable and environmentally friendly energy sources.
It is important to note that Latvenergo is an enterprise that is fully integrated in the pan-European business environment. Recently, the company joined the Declaration on Fair Competition, Free Market, Safety of Supply and Clean Environment that was signed in Brussels on March 19, 2009. In parallel, CEO Karlis Mikelsons signed the Declaration on Climate Change, Electricity Markets and Supply Security. This declaration acknowledges the seriousness of climate change processes going on today, and promotes a wide array of measures aimed at fighting climate change. Delivering power cost-efficiently and reliably through an integrated electricity market, and promoting energy efficiency are among the solutions to mitigate climate change.