Mandatory procurement component may drop at least 11% – 47% in Latvia next year

The Public Utilities Commission (SPRK) has decided to approve the mandatory procurement component (MPC) for 1 January 2022 so that depending on electricity generation method it drops at least 11% – 47%, according to the announcement published in the Latvian Herald.
The decision regarding the MPC and power component states that from 1 January 2022, the reduction of MPC will depend on the decision of the Cabinet of Ministers in regards to the report from the Ministry of Economics on rapid reduction of MPC as an instrument for limiting the price growth in 2022.
MPC compensates the additional costs for public traders when they procure electricity from producers who produce electricity at CHP plants.
If the government does not pass the solution listed in the report that would reduce the average MPC in 2022 by 31 December, the MPC value for electricity produced using natural gas a fuel will be 0.00052 EUR/kWh. This is 46.9% less than now. The MPC for electricity produced using renewable energy resources will be 0.00742 EUR/kWh, which is 11% less than now.
If the government does pass the solution listed in the report by 30 December, the MPC for electricity produced using gas will reduce to 0.00020 EUR/kWh. This is nearly five times below the current index. The MPC for electricity produced using renewable resources will be reduced to 0.00176 EUR/kWh, which is 4.7 times less than now.