Jānis Irbe, Armands Gūtmanis: Energy independence, energy security and local renewable resources

Article published on Delfi.lv on 17.10.2022

Source: Canva photo bank

The new Saeima and government must urgently address the further resolution of the complex of energy issues. It can be agreed that the volume of concerns and fears in society are growing, the uncertainty is “global,” yet there are also clearly visible important frameworks and contours.

Many in Latvia still suffer from past traumas – such as the discredited OIK issue with all its exaggerated and distorted manifestations in real energy policy. It is clear that we must not drive into such a “ditch” again – back then, fossil energy became the biggest winner.

Now it seems that the accents may finally be arranged correctly. During the elections, party representatives tried to make promises of support for “local renewable resources.”

Their role must become greater, while the volume of imported fossil energy must decrease. This is all the more important because the Latvian government, as a member of the European Union, has signed on to emission reduction and renewable energy (RES) targets – and these targets are becoming ever more ambitious.

Just a few weeks ago, the European Parliament (EP), with a convincing vote, supported higher goals that the European Union must achieve by 2030. Specifically, the share of renewable resources must reach 45%, and no longer only 40%, as had been defined in previous goals. The EP also considered it necessary to set a higher target specifically for transport. As a result of increased renewable energy use in the transport sector, greenhouse gas emissions will have to be reduced by 16%. This is a high target that will require radical transformation of the transport industry.

Meeting or failing to meet the EU’s emission and RES targets is not merely a question of whether Latvia will have to pay fines to the EU – it is a question of our economy’s competitiveness, of residents’ ability to pay their energy bills.

Growing targets will require finally starting to coordinate work within government institutions. Until now, government decision-making in the areas of energy security, emission reduction, and renewables has not stood out for its highest quality.

The creation of a special “climate and energy security” ministerial institution could be a step worth considering in the right direction – especially if it is given sufficient administrative, executive, and intellectual resources.

It would be right for the new Saeima and government to rapidly develop an energy strategy, placing the greatest possible emphasis on local renewable resources. This would give businesses more clarity – as much as can reasonably be expected in these circumstances.

We call for logical solutions to be included in this strategy.

Local resources are part of the solution – and not only because they create local jobs. They are also part of energy security and independence.

First, one of the overarching tasks should be to increase Latvia’s energy independence from imported resources (gas, oil products), by producing more energy from local resources such as water, sun, wind, wood, biogas, and biofuels.

Electricity generation, fortunately, is already fairly well developed here, mainly thanks to existing hydroelectric power plants. Yes, we still do not fully cover our needs, but we do produce a significant share of electricity consumption ourselves. This is very good, but not enough.

Second, the past few months show that the Latvian government has finally matured to focus on supporting wind and solar energy production. Solar panel installation volumes are at record highs. Yet businesses need more room to act, including much broader investment opportunities in these resources – that is, we must remove barriers that, for some reason, have “crept into” government regulations. Why can’t a manufacturing company, regardless of sector, gain access to distribution network capacity? Why are companies not allowed to establish “energy communities”? And a few more “whys.” These barriers to investment must be removed, and we will move faster toward energy security.

Third, a concrete example is the biofuel industry. Latvia has several biofuel producers that together could produce and thus replace up to 10% of the country’s diesel fuel consumption. Moreover, biofuels allow for a significant reduction in greenhouse gas emissions. In an era of expensive energy and savings, that is quite a lot. Why do we not want to use this potential, and why have we canceled the mandatory additive, giving a larger market share to imported petroleum products? We have our own local resources that could help reduce dependence on fuel imports. While in recent years the EU has devoted increasing attention to the development of so-called second-generation biofuels and raising their share, in the coming years we will not be able to meet EU goals with those alone, and we will have to use first-generation biofuels as well. This is especially true for Latvia, because our car fleet is extremely old, and it will not be possible to shift rapidly to electric cars. Looking at second-generation or “advanced” biofuel production, one must admit that it requires a larger technological base and is a more expensive process – one that Latvia will only be ready for in the more distant future (pyrolysis, gasification, CO₂ hydrogenation).

Fourth, after long efforts, the government has finally adopted Regulations on the production and transport of biomethane. Back in May, the European Commission calculated that biomethane production must increase tenfold – from 3 billion cubic meters in 2020 to more than 30 billion in 2030. Latvia has a good basis to move proportionally in equally large steps. We have the raw materials, we have a number of biogas companies. With the government playing an active leadership role, allocating EU funds for production development and improving biomethane quality, we will be able to gradually begin replacing imported gas, while at the same time meeting environmental, renewable energy, and emission reduction targets.

Fifth, our national wealth lies in our forests and timber industry. Biomass can and should be used for energy. Especially in this era of wartime crisis. The big debates are over how much and which biomass should be used – and in recent months, price has become another issue. In this field, the government has not yet managed to play its regulatory role to the fullest. There are many dissatisfied – municipal heating companies warn that they cannot purchase biomass because of its excessive price, forestry companies want to increase harvesting volumes, including for export, while environmental activists strongly oppose this. Companies from neighboring countries are also playing an active role in the sector, pursuing their business interests, and they are serious competitors to Latvian companies. The government must also firmly defend our position in EU institutions, so that we can rely on biomass potential in meeting our energy security tasks.

We have often heard that Latvia bows too much before European directives and thinks too little about its own interests and their clear presentation in Brussels. Even if that was never the case and such reproaches are misplaced – today is most certainly an era when we must first think about local renewable resources and energy security, and we must stand firmly for them.