Solar power plants under threat due to tariff increases

Solar power plants under threat due to tariff increases

Green energy is under threat due to increased tariffs for maintaining the capacity of power grid operators Augstsprieguma tīkls and Sadales tīkls. Under the threat of closure will be projects to generate energy using solar panels.

The Latvian electricity network operators Augstsprieguma tīkls and Sadales tīkls have submitted applications to the Public Utilities Regulator for tariff increases. Augstsprieguma tīkls in October. Sadales tīkls in November. They are currently under consideration.

“The energy distribution network operator is one of the largest electricity consumers in Latvia. And in order for power plants, transformers, transmission lines to work, electricity is needed, they all consume electricity. We buy all this energy on the Nord Pool exchange,” explained Gatis Junghans, board member of Augstsprieguma tīkls.

However, in addition to the payment for electricity itself, the power plants that generate it, whether hydro, gas, biomass or solar, pay the network operators Augstsprieguma tīkls and Sadales tīkls a separate fee for maintaining capacity. Large stations pay directly to Augstsprieguma tīkls, while smaller stations pay through Sadales tīkls.

According to the project, the tariff, according to the head of the Latvian Renewable Energy Federation Janis Irbe, can increase by 7-10 times.

“For 100 kW of installed capacity, the fee is 250 euros, and if the fee rises 10 times, then this is already 2,500,” Janis Irbe calculated.

And if a biomass power plant operates 8,000 hours a year, then this fee will be evenly distributed across all costs. Power plants on solar panels, according to Janis Irbe, work no more than 1,500 hours a year.

“Most of all, this will affect solar stations, their profitability. I think that there will be projects, especially small ones, that will refuse such projects altogether. There is no economic sense for the project as such,” said Janis Irbe.

Sadales tīkls confirms a significant increase in the tariff specifically for the power maintenance service. True, they emphasize that this does not apply to the microgeneration of private houses with low-capacity solar panels.

“At the moment, a very significant increase in the tariff is planned. The reason is simple: Augstsprieguma tīkls does not apply the producer tariff to Sadales tīkls, therefore, the consumer tariff is applied for all capacities,” said Sandis Jansons, CEO of Sadales tīkls AS.

There is a dispute on this issue between Augstsprieguma tīkls and Sadales tikls now, and they are not ready to discuss it in the public space. They say that they will argue within the walls of the regulator of public services.

“Based on the current laws, operators have no way out of this situation. If you look for this way out, then it should be a political decision,” summed up the executive director of the association of electric power engineers and energy builders Gunars Valdmanis.

If the current tariffs are maintained, then experts admit that, as a result, this will again affect the share of “green energy” in Latvia.