On Tuesday 2 July, the Cabinet of Ministers approved the support programme developed by the Ministry of Climate and Energy under the Recovery Fund Plan (REPowerEU). The funding available for Latvia for investments amounts to EUR 134.4 million. The investments will be made to increase the security and stability of energy supply, to build a biomethane injection point and to modernise the energy supply network of Latvia.
The investments will be used to purchase and install a 60 MW battery energy storage system, to implement an IT solution for cyber security, to convert overhead lines into cable lines, to build, reconstruct or increase the capacity of substations, to conduct studies, as well as to build a biomethane injection point, etc.
According to Kaspars Melnis, Minister for Climate and Energy, "The security of citizens, including energy security, is a national priority. Since Russia's brutal invasion of Ukraine, the economic and geopolitical situation in the European Union (EU) has changed significantly. Energy security, the availability of energy resources and the stability of energy prices are at the heart of energy policy. We have abandoned gas and electricity imports from Russia and are actively working to boost our own energy production, paying particular attention to the development of wind and solar projects and strengthening the infrastructure of our electricity supply network. We - a small country with infrastructure needs that outstrip the country's short-term financial capacity - need to make the most of the advantages provided by the EU investment."
The investments will be provided in the form of a grant to three potential investment recipients that provide infrastructure development in Latvia - JSC Sadales tīkls, JSC Augstsprieguma tīkls and JSC Conexus Baltic Grid. The investments are planned to be used until 30 June 2026.
Energy security and strengthening of infrastructure
The RePowerEU funding of 100%, i.e. EUR 58.69 million, will be used to deliver and install battery systems in Rēzekne. The battery system is an essential infrastructure element for the security and stability of energy supply in Latvia. The batteries will act as modern accumulators for storing large amounts of energy, which will be important for ensuring energy balance once Latvia's electricity supply grid is disconnected from the electricity supply system of Russia-Belarus when it joins the European grid.
In the context of rapid development of wind and solar energy projects, it is essential to strengthen the energy supply system in order to increase the capacity of the transmission and distribution system to connect additional capacity of renewable energy resources.
The investments will be used, for example, to build new and increase the capacity of existing 110 kilovolt substations, to convert 150 kilometres of overhead lines in the electricity distribution system into cable lines, etc.
Promoting biomethane production in Latvia
The first regional biomethane injection point is planned to be set up in Džūkste. The costs will be covered from the RePowerEU funding. The project is estimated at around EUR 1.5 million. The injection point is a pilot project, which will be followed by future injection points elsewhere in the transmission system.
In order to promote biomethane production in Latvia and ensure its free circulation, JSC Conexus Baltic Grid has developed a solution where a smart system will enable biomethane producers whose production site is located at a relatively large distance from the gas transmission system to transport biomethane from the production site to a centralised biomethane entry point and feed it into the Conexus system. This means that biomethane producers will be able to compress the biomethane they produce to 300 bar pressure and fill it into mobile gas containers which are then transported by trucks to a biomethane injection point connected to the gas transmission system.
The support programme has been approved by the European Commission. During the last year, active negotiations have been held between the Ministry of Energy and Climate and the European Commission on the allocation of funding to certain investment lines. The European Commission guidelines have to be followed in order to determine the investment areas for which the funding is used. When assessing the investment lines, the Ministry of Climate and Energy sought a balanced solution, prioritising funding for energy security and climate objectives.
The intended investments will have a direct impact on the renewed energy security objectives set in the Draft National Energy and Climate Plan for 2021-2030, the increase in the share of renewable energy in the energy portfolio, as well as the full synchronization of the electricity grid of Latvia with the electricity grid of continental Europe.