Energy independence in rural areas: How renewable energy sources can strengthen Latvian farms

In recent years, energy prices have become one of the most important factors affecting the competitiveness of agricultural holdings. Grain drying, milk cooling, ventilation systems, lighting, storage and other production processes require significant amounts of energy, meaning that fluctuations in electricity or fuel prices have a direct impact on production costs. Therefore, the issue of renewable energy in agriculture is no longer merely a matter of environmental policy. It is increasingly becoming a question of farms’ financial stability, resilience and long-term development.

In the context of sustainable agriculture, renewable energy should be viewed as a tool for strengthening energy independence, stabilising production costs and reducing dependence on fluctuations in the fossil fuel market. This is particularly relevant in Latvia, where the operations of many farms are significantly affected by seasonal peaks in energy consumption. In crop farming, these include the harvest and grain-drying periods; in dairy farming, continuous milk cooling and the operation of milking systems; while in horticulture and greenhouse production, energy availability can directly affect product quality and market opportunities.

These and other issues are addressed in the project “Informing Latvian Agricultural Professionals and Developing Guidelines for Achieving Sustainability Goals in Agriculture” (Project No. EKII-9/26), financially supported by the Environmental Investment Fund under the EKII programme of the State Budget of the Republic of Latvia. One of the key areas of the project is identifying practical solutions that enable agricultural businesses to strengthen their economic resilience while moving towards more sustainable farming practices.

Not All Farms Are the Same

One of the key conclusions emerging from the sustainability guidelines developed within the project is that there is no one-size-fits-all solution. Energy solutions must be adapted to the size, specialisation and consumption profile of each individual farm.

For small farms, relatively simple energy-efficiency measures and small-scale self-consumption solar energy systems can often provide the greatest benefits. Such investments help reduce day-to-day electricity costs and decrease dependence on fluctuations in market prices.

For medium-sized farms, the introduction of renewable energy is more closely linked to energy consumption management. In this segment, the ability to analyse consumption patterns, optimise production processes and maximise the use of self-generated energy becomes increasingly important.

Large farms and cooperatives, on the other hand, should consider developing a diversified energy portfolio by combining several solutions, such as solar energy, biogas, energy storage and other instruments that improve efficiency. Such an approach can significantly reduce energy-related risks in the long term.

Solar Panels Are Only Part of the Solution

In public discussions, renewable energy in agriculture is often associated primarily with solar panels. Although self-consumption solar energy systems are indeed an economically viable solution in many cases, they are not the only option.

Depending on the specific characteristics of a farm, effective solutions may also include biogas, biomethane, biomass, heat pumps or energy storage systems. The key question is not which particular technology is chosen, but how it can help reduce costs and improve the resilience of the farm.

Therefore, before making an investment, it is necessary to conduct a detailed assessment of electricity, heat and fuel consumption, seasonal demand peaks and the specific production processes involved.

For example, solutions for a farm whose cost structure is dominated by grain drying may differ significantly from those required by a dairy farm, where the main energy consumers are milk cooling, milking equipment and ventilation systems.

Energy Storage Is Becoming Increasingly Important

As the use of renewable energy increases, the importance of electricity storage and consumption flexibility is also growing. Energy is not always generated at exactly the moment when it is needed. Therefore, farms need to consider not only how to generate energy, but also how to store it or use it at the most efficient time.

The guidelines emphasise that investment decisions should take into account not only installed capacity, but also the share of self-consumption, grid connection possibilities, maintenance costs, payback period and the impact on the farm’s cash flow.

In other words, what matters is not how many solar panels are installed, but what practical and economic benefit they provide to the particular farm.

Cooperation as an Opportunity for Regional Development

Cooperation can also play an important role in the development of sustainable energy solutions. Latvia still lacks modern regional seed preparation and storage centres that integrate energy-efficient solutions and renewable energy for self-consumption into their operations.

Cooperatives and shared infrastructure can help reduce costs, make services more accessible to small and medium-sized farms, and strengthen the resilience of local supply chains. In such a model, the beneficiaries are not only individual businesses but the agricultural ecosystem of the entire region.

This means that energy independence is not solely an individual issue for each farm. It can also become an instrument for regional development.

Sustainability Starts with an Economic Rationale

Renewable energy is often perceived primarily as a climate policy instrument. However, the Latvian agricultural sustainability guidelines emphasise a different approach. A sustainable investment should first and foremost improve the competitiveness of the farm, reduce cost volatility and increase resilience to various risks.

Agriculture is a sector that faces both fluctuations in market prices and weather-related risks. Therefore, energy independence is becoming one of the instruments that can help farms plan their development over the long term. The greater a farm’s ability to control its energy costs, the more resilient it can be to external shocks.

From Guidelines to Practical Dialogue with the Sector

To bring the project results and the developed guidelines to agricultural professionals, the conference “Latvian Agriculture – EU Funds, Finance and Sustainable Development” will take place on 25 September 2026.

The programme will focus particularly on the project’s results and recommendations, as well as sustainable agriculture, renewable energy in agriculture and carbon farming as tools for adapting agricultural practices to climate change. The conference will also address Latvia’s strategic directions for tackling the challenges posed by climate change, EU funding opportunities for the 2028–2034 period, and financing opportunities for farmers.

The conference provides an opportunity not only to learn about the project results, but also to discuss how these recommendations can be practically applied to farms of different sizes and specialisations.

TO REGISTER, CLICK HERE: https://www.ilgtspejasklasteris.lv/konferencesregistracija

The question, therefore, is not whether renewable energy should be used in Latvian agriculture. The question is how each farm can find the solution best suited to its needs – one that strengthens both competitiveness and sustainability. Energy independence in rural areas is not an end in itself. It is an opportunity for Latvian farms to become more stable, predictable and better prepared for the challenges of the future.