Latvian government plans to compensate residents for increased electricity costs

The state plans to compensate 50% of electricity system service costs for end users. This support will remain in force until the end of April, as provided by the government’s approved amendments to the Law on Pollution developed by the Ministry of Environment Protection and Regional Development.
The proposed amendments provide for 50% compensation of electricity cots for end users and maintain this support until 30 April 2022. Short-term compensation, which will help reduce the immediate consequences from electricity price growth for private persons and legal persons.
Minister Artūrs Toms Plešs explains it will serve as support for residents and businesses when electricity price rise causes considerable financial burden.
«At the same time, I would like to say we need systemic changes to avoid such situations in the future. We have to speed up adoption of the European Green Course and climate neutrality goals so that electricity costs can be stabilised in a long-term perspective,» adds the minister.
As an example he mentioned this year’s implemented support programme for municipalities. This support offers financing towards building energy efficiency. The politician invites municipalities to use the support offered by the ministry because more support is coming next year. It is also important to continue investing in renewable energy infrastructure to promote Latvia’s energy independence.
EUR 77 894 000 is the funding amount planned to help compensate energy costs.
According to proposed amendments, all system operators are to provide their clients with a compensation (VAT included) to cover system service costs during this period of time. This compensation is to be calculated further by electricity traders for their clients.
Simultaneous increase of demand for electricity and low electricity production volumes from renewable energy resources in the EU promoted general demand for energy resources, increasing electricity production from fossil fuels. This also means increased emission quotas and fossil fuel prices.
This way the price rise affected all forms of energy production, which was reflected in end electricity prices.
One of the short-term solutions proposed by the European Commission is general state support, which would help reduce energy costs for all direct energy users.
Amendments proposed by the ministry of regional development have to be passed by the Saeima be fore they can come into force.