Latvia Energy efficiency report
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1 Latvia Energy efficiency report Objectives: o 3.5 TWh of end-user energy savings by 2016 o 6.1 TWh of end-user energy savings by 2020 o 170 GWh of energy savings in industry by 2016 Overview - (%/year) Primary intensity (EU=100)¹ % + CO 2 intensity (EU=100) % - CO 2 emissions per capita (in tco /cap) % -- Power generation Efficiency of thermal power plants (in %) % ++ Rate of electricity T&D losses (in %) % ++ CO 2 emissions per kwh generated (in gco /kwh) % - Industry Energy intensity (EU=100) % - Share of industrial CHP in industrial consumption (in %) % + Unit consumption of steel (in toe/t) % Among best countries + Better than the EU average 1 - Below the EU average 1 --Among countries with the lowest performances Latest update: March The European Union, as the best performing region, is used as the benchmark.
2 1. Overview 1.1. Policies: 3.5 TWh of energy savings in 2016 Latvia adopted its first National Energy Efficiency Action Plan (NEEAP) in and the second version in June They set an energy savings target of 3.5 TWh (300 ktoe) in 2016, 78 percent of which must be achieved in the household sector, 12 percent in the services sector, 6 percent in the transport sector and 5 percent in industry. By 2020, end-use energy savings should reach 6.1 TWh. Latvia s Law on End-use Energy Efficiency was adopted in January to comply with EU requirements. Its objectives are to define the main principles of the NEEAP, implement energy efficiency monitoring and create the conditions for the development of a market for energy efficiency services, including ESCOs (Energy Service Companies). Most energy efficiency measures concern the household sector. Latvia s Energy Development Guidelines aim to reduce the average heat consumption in buildings by at least 11 percent over the period and to improve energy efficiency in heat production installations. In Latvia adopted a new Building Energy Performance Law, establishing the requirements for the certification of energy auditors and energy certificates for buildings. Information campaigns and energy audits are the two key measures introduced to improve energy efficiency in the household and services sectors. Latvia also aims to improve the energy efficiency of district heating, which is the main source of heating in the country. More specifically, it aims to raise the efficiency of heat production from 77 percent in to 90 percent by Heat distribution losses should decrease from 16 percent to 14 percent by Energy consumption trends: low energy consumption per capita Latvia s energy consumption per capita is 40 percent below the EU average (less than 2 toe in ). Total energy consumption (primary consumption) fell rapidly between and (-4.2 percent/year) but increased by 2.4 percent/year until. In, following the severe economic crisis that hit the country, energy consumption dropped by 5.9 percent. In, it picked up again, growing by 4.3 percent, but remained below its level. Figure 1: Energy consumption trends by sector 5 Other Industry Power generation 4 3 Mtoe Latvia Country reports 2
3 The energy consumption of the power sector remained relatively stable, at roughly 3 percent of primary consumption; this limited share is explained by the large share of hydropower generation. Industrial energy consumption also remained stable from until (18 percent of total energy consumption, on average). The shares of both these sectors are low compared with neighboring countries. The residential and services sectors account for more than 50 percent of primary consumption. Gas covered one third of total energy consumption in (22 percent in ), followed by biomass (29 percent, from 22 percent in ), oil (27 percent, from 41 percent) and coal (2.5 percent, from 5.7 percent). Hydropower and electricity imports cover the remainder. Electricity consumption per capita is half that of the EU average (about 2,800 kwh/cap in ). Electricity accounts for 13 percent of energy consumption, compared with 10 percent in. Indeed, electricity consumption grew by 5 percent/year between and, triggered by a soaring consumption in the household and services sector (+6.6 percent/year). Electricity consumption fell by around 8 percent in, and increased by just 1.8 percent in. Industry accounts for 26 percent of power consumption (72 percent of the electricity is consumed in the residential and services sectors). Figure 2: Electricity consumption trends by sector Industry Others TWh Energy efficiency trends: rapid improvement in energy intensities Latvia s energy intensity (energy consumption per unit of GDP) has been decreasing very rapidly (by 4.4 percent/year between and ). Most of that reduction was achieved in the residential and services sector, which is the largest energy consumer, although the improvement is also partly linked to the decrease in industrial energy intensity (energy consumption per unit of industrial value added), which dropped by 0.6 percent/year. Latvia Country reports 3
4 Figure 3: Energy intensity trends 1.0% % %/year -1.0% -2.0% -3.0% -4.0% Total Power generation Industry -5.0% 2. Power generation 2.1. Policies: rehabilitation of power plants and promotion of CHP The NEEAP includes measures aimed at improving energy efficiency in power generation, such as the rehabilitation of Daugava and other hydropower facilities, and of the Riga TEC thermal power plant (introduction of CCGT). Latvia also aims to raise the share of cogeneration in power production. According to Latvia s Energy Development Guidelines -2016, electricity produced from highly-efficient CHP using biomass should account for 8 percent by In, tax exemptions were introduced for electricity production facilities using renewables and for CHP plants. Measures will be taken to improve energy efficiency in the transmission and distribution of electricity (reconstruction of substations and modernization of distribution networks to develop a smart network) Efficiency of the power sector: high efficiency The average efficiency of Latvia s power sector is high, at 46 percent in, owing to the large share of hydropower in electricity generation. The efficiency rate has increased by 7 percentage points since, as the efficiency of thermal power plants grew from 14 percent in to 29 percent in. This improvement is due to the growing share of gas-fired generation (first CCGT unit in, which now accounts for about 40 percent of the thermal production park). However, the efficiency rate of thermal power plants is 25 percent lower than the EU average. Latvia Country reports 4
5 Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity, by technology Steam Gas turbines Combined cycles % Total power generation Thermal power plants GW The rate of transmission and distribution losses is high (about 60 percent higher than the EU average), despite a noticeable fall since (by almost 60 percent). Figure 6: Electric T&D losses % Industry 3.1. Policies: 170 GWh of energy savings in industry by 2016 Latvia s National Energy Efficiency Action Plan sets a target of 170 GWh of energy savings in the industrial and agricultural sector by 2016 (about 15 ktoe). By 2020, total energy savings should reach 337 GWh. The NEEAP includes two main financial measures: financial support for investments in energy efficiency in buildings and for energy audits. Energy audits were introduced in the mid-1990s, and are aimed at improving technical processes and restructuring the operations of industrial enterprises. Latvia also leads information campaigns on the most effective technical solutions to increase the use of energy-efficient and innovative technologies. Voluntary agreements can be signed by industrial companies; the objective of these agreements is to achieve energy savings in industry of at least 10 percent. Latvia Country reports 5
6 3.2. Energy consumption trends: low industrial consumption After a decline between and, industrial energy consumption grew by 3.7 percent/year until ; it fell by 4.8 percent in and by 8.2 percent in. It recovered in and exceeded its pre-crisis level. Figure 7: Trends in industrial energy consumption Mtoe The share of gas in the energy consumption of industry increased rapidly between and, and then fell below its level (33 percent in ). The shares of biomass grew significantly, from 7 percent to 28 percent in. The share of electricity tended to increase until and has been declining since then (19 percent in ). Coal consumption is almost insignificant, although its share increased from 2 percent in to 6 percent in. Oil consumption decreased dramatically over time and now accounts for 12 percent (down from 36 percent in ). 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Figure 8: Energy consumption of industry, by source 0% Biomass Heat Electricity Gas Oil Coal/Lignite Figure 9: Energy consumption of industry, by branch 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Paper Non metallic minerals Chemical Steel Between and, the share of energy-intensive industries remained stable at around 40 percent. Since the economic crisis, their share in industrial energy consumption has fallen to about 35 percent due to weakened activity. Steel and non-metallic minerals are the largest consuming sectors (17 percent and 14 percent, respectively, in, compared with 24 percent and 11 percent, respectively, in ). The chemical sector accounts for 4 percent of industrial energy consumption while the share of the paper sector is marginal. Latvia Country reports 6
7 3.3. Energy intensity trends: efficiency gains in the steel sector The energy intensity of the Latvian industry decreased at the slow pace of 1.4 percent/year between and. That improvement was achieved through efficiency gains in the steel industry, which is the country s largest industrial consuming sector: the energy consumption per ton of steel produced (unit consumption) decreased by 5.6 percent/year over this period. Efficiency gains in the paper sector were also significant (7.9 percent/year decrease in the unit consumption of paper), but the share of this branch in industrial energy consumption is low and, accordingly, its impact on industrial energy intensity was minimal. A small decrease in the energy intensity of the chemical sector was reported between and (-1.4 percent/year). These improvements were offset by a rise in the unit consumption of cement (+0.6 percent/year), which is the second largest energy-consuming branch. Figure 10: Trends in the energy intensity of industrial branches 1% 0% -1% - -2% %/year -3% -4% -5% -6% -7% Total* Steel Chemical Cement Paper -8% *Including construction and mining, Odyssee Despite a high share of CHP capacity (all thermal power plants), CHP in industry is limited (6 percent in ). This can be explained by the reduced shares of the paper and chemical sectors, which are branches in which CHP usually plays an important role. Figure 11: Share of industrial CHP in industrial consumption 10% 8% 6% 4% 2% 0% Latvia Country reports 7
8 The energy intensity of the manufacturing industry (ie excluding construction and mining) decreased by 1.4 percent/year between and. About 1/3 of this decrease was achieved through energy efficiency improvements; the rest was the result of a shift in the structure of industry toward less energy-intensive branches. Figure 12: Trends in the energy intensity of manufacturing and structural effect 0.0% -0.2% - %/year -0.4% -0.6% -0.8% -1.0% -1.2% -1.4% -1.6% Real variation Change at constant structure Structural effect Latvia Country reports 8
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