This autumn, the cost of thermal energy in Riga will rise by approximately 22%, according to AS “Rīgas siltums.”
The company has calculated a draft for the new heat energy tariff and submitted it to the Public Utilities Commission (SPRK) for evaluation. The draft reflects changes in energy resource and purchased thermal energy costs, although it is not a full tariff overhaul.
The proposed heat energy tariff is 88.10 euros per megawatt-hour (MWh) excluding VAT. An additional 2.05 euros per MWh is to be added as a balancing component for unforeseen expenses/revenue.
Currently, the approved tariff is 77.77 euros per MWh, with clients effectively paying 74.17 euros per MWh including the component. Under the new draft, the tariff will be 88.10 euros per MWh, plus the 2.05 euros component, resulting in a total cost to consumers of 90.15 euros per MWh — mainly due to the increase in natural gas prices over the past year.
Thus, for the next heating season, a price increase of about 22% is expected. For a two-room apartment in a renovated or new multi-apartment building, monthly heating costs in the coldest winter months may rise from approximately 45 euros to 55 euros.
In unrenovated buildings with significant heat loss, the increase could range from 70 euros to 85–90 euros,
depending on building condition and outside temperatures.
While it’s difficult to predict the exact date, “Rīgas siltums” anticipates that the new tariff will take effect in September as the heating season begins.
The company explains that Riga’s heating system is divided into two currently unconnected sections — the left and right banks of the Daugava River. On the left bank and in Vecmīlgrāvis, “Rīgas siltums” produces thermal energy. For the right bank — which accounts for two-thirds of Riga’s total heat consumption — “Rīgas siltums” purchases heat from other producers, primarily AS “Latvenergo.” Therefore, production and purchasing costs are calculated separately in the tariff.
The most significant cost increase in the new tariff is due to purchased thermal energy, where pricing is based on “Latvenergo” rates. In summer 2024, when the current tariff was developed, “Latvenergo” heat cost was 55 euros per MWh. As of June 2025, the cost is 76.51 euros per MWh at TEC-1 and 79.75 euros per MWh at TEC-2.
Other producers also supply heat to the right bank, competing with “Latvenergo’s” price. To foster competition, “Rīgas siltums” created a thermal energy procurement market open to both independent producers and “Latvenergo.”
During summer, when consumption is low, the installed heat production capacity exceeds demand.
This ensures competition and lower prices — in June, average prices were 2.5 times lower than the “Latvenergo” tariff.
In winter, when heat consumption is about five times higher, competition is possible for only about one-third of required supply. The rest is covered by “Latvenergo.” The greatest savings occur when “Latvenergo” sells residual heat from electricity generation — prices can be up to 50% lower than their standard tariff.
About 56% of the heat produced by “Rīgas siltums” is from biomass (wood chips), whose exchange price has remained stable or even declined. The remaining heat is produced from natural gas, whose price has increased. However, the company secured several favorable gas procurement contracts, resulting in an approximately 13% increase compared to the previous year. Therefore, the cost increase in self-produced heat is minor — from 16.39 euros to 17.09 euros per MWh.
Starting January next year, “Rīgas siltums” will begin using a new 49 MW electrode boiler, which will allow natural gas substitution when electricity prices are low. This will positively impact the tariff and enhance Latvia’s energy security through frequency balancing.
The company emphasizes that it is not permitted to profit from changes in energy resource or purchased heat prices.
These are passed directly to customers. However, tariffs are approved for longer periods, and prices — especially gas — may fluctuate. These changes are reflected in the balancing component, which in the new draft is 2.05 euros per MWh, due to the rise in gas prices over the past year.
Previously, the situation was reversed: falling gas prices led to lower actual costs than forecast, resulting in a 29 million euro overpayment. This was returned to customers last heating season via a reduced component of 3.60 euros per MWh and by offsetting increased purchased heat prices.
The balancing component, like the tariff itself, is reviewed, approved, and supervised by SPRK.
As reported, in the first half of the financial year (the 1st of October, 2024 – the 31st of March, 2025), the consolidated turnover of the “Rīgas siltums” group was 189.28 million euros — 12% less than the same period the previous year — while profits increased by 31.7% to 33.38 million euros.
The parent company “Rīgas siltums” had a turnover of 189.25 million euros in the same period — a 21.8% drop — and a profit of 22.465 million euros, down 12%.
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