Energy efficiency policy of Latvia

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Energy efficiency measures are recognised as a means to ensure sustainable energy supply, reduce greenhouse gas emissions, improve energy security, reduce energy import costs and boost the competitiveness of Europe. Energy efficiency legislation in the European Union (EU) has changed significantly over the last 15 years.

EU Directives

One of the main framework documents in the energy efficiency sector, developed by the European Parliament and the Council, is Directive 2018/844 on energy efficiency. The objective of the Directive is to align EU energy legislation with the 2030 energy efficiency and climate targets, as well as to contribute to the implementation of the Energy Union strategy with the purpose of:

reducing the dependence of the EU on energy imports;
reducing emissions;
boosting the creation of jobs and growth;
improving the protection of consumer rights;
reducing energy poverty.

In 2023, amendments to the Directive were made and the amended edition was adopted as (Directive (EU) 2023/1791). The EU energy efficiency targets to be achieved by 2030 – i.e., reductions in primary and final energy consumption at the level of the EU – are set at 11.7% in comparison with the forecast of 2020 regarding energy consumption in 2030. In absolute terms, EU energy consumption should not exceed 992.5 Mtoe in 2030 and 763 Mtoe in the area of primary and final energy.

	Primary energy target in 2030	Energy end-use target 2030
Directive 2018/844 on energy efficiency	1,273 Mtoe	956 Mtoe
Directive (EU) 2023/1791	992.5 Mtoe	63 Mtoe

The second key instrument is the Directive on the energy performance of buildings (Directive 2010/31/EU), which aims to improve the energy performance of buildings in the EU, taking into account different climatic and local conditions, by setting minimum requirements and a common framework for calculating energy efficiency. The member states of the EU must set optimal minimum energy efficiency requirements and review them every five years. Such requirements should be set for buildings, components thereof and energy used.

Policy planning documents

Energy efficiency and energy generation are included as an action line in national policy planning documents:

Latvia has also developed policy planning documents that set out specific strategies and guidelines in the energy sector.

Long-Term Energy Strategy of Latvia 2030 aims to achieve a competitive economy while striving for sustainable energy, ensuring its sustainability in economic, social and environmental terms and increasing the security of energy supply.

The Latvian National Energy and Climate Plan for 2021–2030 (NEKP 2030) has defined challenging goals for reducing GHG emissions, increasing the share of renewable energy resources and increasing energy efficiency; for example, a more ambitious goal than in the European Union has been adopted for increasing the share of renewable energy – to ensure a share of at least 50% in the final energy consumption of Latvia, taking the fact that we have already reached 40% into account.

NEKP 2030 includes more than 100 different policy measures, providing action in 12 directions, including improving energy efficiency and promoting the use of renewable energy technologies in industry. Detailed information on NEKP 2030 is available on the website of the Ministry of Economy.

In the time period from 2021 to 2030, the mandatory cumulative final energy consumption saving target of Latvia is 1.76 Mtoe or 20.472 GWh. Final energy consumption is the total amount of energy supplied to industry, transport and service sectors, agriculture and households.

The directive defines various policy measures as regulatory, financial, fiscal, voluntary or informational instruments in order to achieve the specified reduction in energy consumption. Member States choose which measures to formally establish and implement to create support systems, requirements or incentives to implement energy efficiency-enhancing measures and to provide or purchase energy services.

Laws

In 2016, Latvia adopted the Energy Efficiency Law. Its purpose is the “rational use and management of energy resources to promote sustainable economic development and limit climate change”. Since the Energy Efficiency Law took effect, several amendments have already been made to it. Also, in accordance with the Law on Energy Efficiency, several regulations of the Cabinet of Ministers (MK) have been issued, which determine the requirements and methodological rules for companies.

The Energy Efficiency Law defines several measures, obligations and support mechanisms for companies:

Energy efficiency obligation scheme for electricity retail traders.
Corporate energy audit or energy management or environmental management with a supplement for large electricity consumers and large companies.
Voluntary agreement on improving energy efficiency for merchants, organisations and municipalities.
The Energy Efficiency Fund, the funds of which are intended for the implementation of state support programmes for achieving the mandatory energy end-use goal and public information and education measures in the field of energy efficiency.

In addition to energy efficiency policy measures, support programmes from EU structural funds and the Recovery Fund, designed to increase energy efficiency, can be added. We invite you to view the current information on the available support and the announced project submission selections on the websites of Altum, the Ministry of Economics and the Investment and Development Agency of Latvia.

Obligations for large electricity consumers and large companies

Sections 10 and 12 of the Energy Efficiency Law establish the obligation for large companies and large electricity consumers to conduct an energy audit or implement a certified energy management system according to the ISO 50001 standard, or an environmental management system with an addendum (only for large companies). A company is included on the list if it meets the following criteria for two consecutive years:

A large company is a merchant employing more than 249 employees or whose annual turnover exceeds 50 million euros and the annual balance as a whole – 43 million euros.
A large electricity consumer is an electricity user whose annual electricity consumption exceeds 500-megawatt hours for two consecutive calendar years.

Energy audit – activities that are performed to obtain information on the structure of energy consumption in buildings or groups of buildings, processes or equipment, as well as to determine and evaluate economically justified energy-saving opportunities, the results of which are summarised in a report.

Energy management system ISO 50001 – a set of related processes that create an action plan and determine energy efficiency goals, as well as procedures for achieving these goals.

Environmental management system ISO 14 0001 – methodically helps evaluate the impact of the organisation’s processes on the environment, to determine the important environmental aspects and to reduce the negative impact of the organisation’s activities on the environment.

Obligations for large electricity consumers and large companies

Responsibilities of large companies

Within a year after inclusion in the list of large companies, conduct an energy audit, which must cover at least 90% of the company's total final energy consumption. The regular energy audit should be performed every four years.
Implement all or at least three of the energy efficiency improvement measures indicated in the first or current energy audit report with the highest estimated energy savings or economic return.
If the company has implemented and certified an energy management system ISO 50001 or an environmental management system ISO 14001 in which a continuous energy consumption evaluation process is ensured, covering at least 90% of the company's total final energy consumption, then the large company does not need to perform a regular energy audit.
In accordance with the Cabinet Regulation No. 660 "Regulations Regarding the Energy Efficiency Monitoring" to report to the State Construction Control Bureau about the performed energy audit, the measures taken and the achieved energy savings.

Obligations of large electricity consumers

Within a year after being included in the list of large electricity consumers, implement and maintain a certified energy management system according to the ISO 50001 standard, covering at least 90% of the company's total final energy consumption, or conduct an energy audit.
Implement all or at least three of the energy efficiency improvement measures specified in the energy management system or the supplemented environmental management system with the highest estimated energy savings or economic return.
In accordance with the Cabinet Regulation No. 660, report to State Construction Control Bureau on the implemented energy management system, measures taken and energy savings achieved.
If the large electricity consumer transfers electricity to sub-users, the large electricity consumer can submit an electricity consumption balance approved by SCCB. It indicates the distribution of electricity consumption – the amount of purchased electricity, the amount of electricity transferred and the name of the companies. The balance is confirmed by the company's energy auditor or an independent expert in the field of building energy efficiency.
The list of energy auditors of companies is available on the website of the Latvian National Accreditation Bureau in the section “Accredited Institutions” and on the website of the Construction Information System in the section “Registries”.

The existence of a certified energy management system is a favourable criterion that is taken into account when evaluating project applications of large electricity consumers, if the project is planned to attract such types of support as payment from the state or local government budget, state or local government guarantees, subsidising loan interest rates, as well as other financial assistance from the state, local government, European Union budget and foreign financial aid funds.

If the large electricity consumer does not fulfil the aforementioned requirements, according to Cabinet Regulation No. 202 (11 April 2017) it has to pay an energy efficiency fee, the rate of which is 7% of the cost of electricity consumed in the previous year.

Regulatory enactments regulating the energy efficiency industry are:

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