Latvenergo Group presentationKristaps Ločmelis, Project Manager of Regulatory Affairs                  30 September 2011
Agenda:       1.      Latvenergo Group in brief       2.      Electric power market of Latvia       3.      Baltic market ...
Latvenergo Group in brief                    General                                                         Financial Fu...
Latvenergo Group structure                                        Latvenergo Group business is organised:                ...
Latvenergo Group business lines   Generation          Trade & Supply                 Support functions  Transmission      ...
Agenda:       1.      Latvenergo Group in brief       2.      Electric power market of Latvia       3.      Baltic market ...
Electricity supply structure in 2010 (GWh)               2640                                                    3446     ...
Latvenergo and its competitors electricity sold in Latvia, GWh8000                7529       7480       71397000          ...
Energy risk insurance (ERI)   In 2010, Latvenergo AS in cooperation with insurance    company BALTA AAS began to offer a ...
Latvenergo customer service statistics: 2010 monthlyaverage  30.09.2011        Latvenergo Group presentation   10
Customer satisfaction   In 2010, an average of 500    complaints were received and    processed      each    month.  The ...
Agenda:       1.      Latvenergo Group in brief       2.      Electric power market of Latvia       3.      Baltic market ...
Baltic electricity supply balance 2010Consumption:    26 TWhGeneration:     23 TWh                                        ...
Baltic electricity supply balance 2016Consumption: 30 TWh  Generation: 25 TWh                                    Import   ...
Price formation estimation in Baltic region                                                           Price is set by    ...
Market functioning scheme    30.09.2011       Latvenergo Group presentation   16
Opening of Baltic electricity market in figures                             Total        Total cons.   Criteria to became ...
Total consumption of the electricity of the Baltic States and amount ofelectricity sold by Latvenergo Group, TWh   30     ...
Electricity sold by the Latvenergo Group in the Baltics in 2010 30.09.2011             Latvenergo Group presentation      ...
Latvenergo position in Baltic free markets (jan.-aug. 2011)                                                         22%   ...
Dynamics of market customers of the Latvenergo Group in 2010  Customers purchasing electricity according to an agreement r...
Baltic market will be integrated in the Scandinavian market                    2014                                3000 MW...
Baltic electricity market design by 2015 Vision for future market design in the common Baltic   electricity market:     N...
Agenda:       1.      Latvenergo Group in brief       2.      Electric power market of Latvia       3.      Baltic market ...
Renewable energy sources in Latvenergo fuel mix, 2010               Use of primary energy sources for electricity generati...
Latvenergo AS hydroenergy on the river Daugava30.09.2011         Latvenergo Group presentation   26
The Daugava river    The Daugava is the largest river in Latvia, sourcing in Russia and flowing    through Belarus before ...
Hydropower plants on the river Daugava (1) 30.09.2011        Latvenergo Group presentation   28
Hydropower plants on the river Daugava (2)     Pļaviņas HPP                  number of hydro units           10          ...
Hydropower plants on the river Daugava (3)      Ķegums HPP  Ķegums HPP consists of two hydro-  power plants with the tota...
Hydropower plants on the river Daugava (4)    Ķegums HPP -1                 number of units                 4            ...
Hydropower plants on the river Daugava (5)    Ķegums HPP-2                 number of units                 3             ...
Hydropower plants on the river Daugava (6)                                            number of units      6              ...
Other Latvenergo RES plantsAinaži wind turbine –   installed capacity – 0.6 MWAiviekste hydropower plant –  installed ca...
CO2 emissions per unit of electricity produced at  Latvenergo AS power plantsThe overall emissions of CO2 by Latvenergo AS...
Regulatory framework to promote RES generation    All RES generators (except large HPP) have the rights to sell     elect...
RES feed-in tariffs in Latvia. No reflection to market price.                                                             ...
RES market integration not a problem today                                                                         2010   ...
RES market integration solution needed in the future              18%               11%                                   ...
Is there a RES market integration solution?    Feed-in premium                                      90    All producers ...
Q&A ?30.09.2011   Latvenergo Group presentation   41
Thank you !www.latvenergo.lvinfo@latvenergo.lvLatvenergo ASPulkveza Brieza iela 12, RigaLV-1230, LatviaTel. +371 67728222F...
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Prezentacija K.Locmelis 30.09.2011

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Prezentacija K.Locmelis 30.09.2011

  1. 1. Latvenergo Group presentationKristaps Ločmelis, Project Manager of Regulatory Affairs 30 September 2011
  2. 2. Agenda: 1. Latvenergo Group in brief 2. Electric power market of Latvia 3. Baltic market 4. Renewable energy sources 30.09.2011 Latvenergo Group presentation 2
  3. 3. Latvenergo Group in brief General Financial Fully owned by the Republic of Latvia (M EUR) 2007 2008 2009 2010 Integrated energy utility engaged in Revenues 514 677 712 818  Generation Net Profit 11 10 28 63  Transmission  Distribution Investments 317 281 149 197  Supply  Telecommunications 4517 employees  Moody’s credit rating Baa3 - stable Technological Customers Installed generation capacities:  Energy sold (2010)  Electric – 7620 GWh  Electric – 2 362 MW  Heat – 3000 GWh  Thermal – 2 275 MW  About 1 million customers connected Length of power lines  Baltic electricity market share ~ 29%  Transmission – 4 747 km  Distribution – 90 928 km 30.09.2011 Latvenergo Group presentation 3
  4. 4. Latvenergo Group structure  Latvenergo Group business is organised:  Non regulated business lines  Regulated business lines  According to EU regulations TSO and DSO are unbundled in new legal entities. TSO is reorganized into independent system operator and transmission system owner.  Transmission system owner Latvijas elektriskie tīkli AS (Latvian electrical network) established in 2011. Independent system operator will be sold to the state.  Geographic expansion by participating in regional trade  Social responsibility is addressed by the establishement of Pension Fund 30.09.2011 Latvenergo Group presentation 4
  5. 5. Latvenergo Group business lines Generation Trade & Supply Support functions Transmission Fully regulated assets Transmission Distribution 30.09.2011 Latvenergo Group presentation 5
  6. 6. Agenda: 1. Latvenergo Group in brief 2. Electric power market of Latvia 3. Baltic market 4. Renewable energy sources 30.09.2011 Latvenergo Group presentation 6
  7. 7. Electricity supply structure in 2010 (GWh) 2640 3446 29% 38% 8% 693 25% 2304 Daugava’s HPP (38%) Riga CHPP (25%) Other producers(8%) Import (29%) 30.09.2011 Latvenergo Group presentation 7
  8. 8. Latvenergo and its competitors electricity sold in Latvia, GWh8000 7529 7480 71397000 6974 66786000500040003000 Latvenergo2000 Other traders1000 351 340 0 3 94 0 2006 2007 2008 2009 2010 30.09.2011 Latvenergo Group presentation 8
  9. 9. Energy risk insurance (ERI) In 2010, Latvenergo AS in cooperation with insurance company BALTA AAS began to offer a new service never before seen on the Baltic market: ERI ERI provides insurance of all technological equipment, machine tools, stock, utilities, goods, raw materials, unfinished and finished products that are owned by a company ERI is covering electricity supply interruptions or lightning damage In 2010, Latvenergo AS gave customers a total of 510 ERI certificates. 24 customers received ERI compensations within half a year. 30.09.2011 Latvenergo Group presentation 9
  10. 10. Latvenergo customer service statistics: 2010 monthlyaverage 30.09.2011 Latvenergo Group presentation 10
  11. 11. Customer satisfaction In 2010, an average of 500 complaints were received and processed each month. The complaint ratio to total number of customers did not exceed 0.6% in 2010. Just 9% of all complaints were justified, with another 5% partially justified Responses to 52% of complaints were provided within a maximally short time period of 15 days. 30.09.2011 Latvenergo Group presentation 11
  12. 12. Agenda: 1. Latvenergo Group in brief 2. Electric power market of Latvia 3. Baltic market 4. Renewable energy sources 30.09.2011 Latvenergo Group presentation 12
  13. 13. Baltic electricity supply balance 2010Consumption: 26 TWhGeneration: 23 TWh Import 12% Other stations Narva station In the Baltics 38% 16% Kruonis HAES 3% Vilnius CHPP 2% Riga Elektrenai CHPP Daugava HPP 7% 9% 13% 30.09.2011 Latvenergo Group presentation 13
  14. 14. Baltic electricity supply balance 2016Consumption: 30 TWh Generation: 25 TWh Import 18% Narva station 28% Other stations In Baltics 15% Daugava HPP 9% Kruonis HAES Riga 2% CHPP 8% Viļius CHPP 2% Elektrenai new. 400 MW Elektrenai 2% Riga CHPP 2/2 - 11% 5% 30.09.2011 Latvenergo Group presentation 14
  15. 15. Price formation estimation in Baltic region  Price is set by the most expensive producer or supplier who cover the consumption  Increasing subsidized RES volumes distorts the market 30.09.2011 Latvenergo Group presentation 15
  16. 16. Market functioning scheme 30.09.2011 Latvenergo Group presentation 16
  17. 17. Opening of Baltic electricity market in figures Total Total cons. Criteria to became Estimated clients a member of open open market (M) (TWh) market (%) Consumption 0.5 8.5 > 2 GWh/year ~ 30 All from 2013 > 50 employees or 0.9 7.0 turnover > 10 MEur ~ 48 > 100 kW (from Jan 1st, 2011) > 30 kW (from Jan 1st, 2012) 1.4 11.0 ~ 57 All from 2015 30.09.2011 Latvenergo Group presentation 17
  18. 18. Total consumption of the electricity of the Baltic States and amount ofelectricity sold by Latvenergo Group, TWh 30 26.6 27.2 25.4 26.2 25 20 15 10 Baltics 7.5 7.5 7.7 6.7 Latvenergo 5 0 2007 2008 2009 2010 30.09.2011 Latvenergo Group presentation 18
  19. 19. Electricity sold by the Latvenergo Group in the Baltics in 2010 30.09.2011 Latvenergo Group presentation 19
  20. 20. Latvenergo position in Baltic free markets (jan.-aug. 2011) 22% Free market ~30% Free market ~48% 87% 35% Free market ~57% 30.09.2011 Latvenergo Group presentation 20
  21. 21. Dynamics of market customers of the Latvenergo Group in 2010 Customers purchasing electricity according to an agreement rather than at a regulated price 30.09.2011 Latvenergo Group presentation 21
  22. 22. Baltic market will be integrated in the Scandinavian market 2014 3000 MW 2016 700 MW 2 30.09.2011 Latvenergo Group presentation 22
  23. 23. Baltic electricity market design by 2015 Vision for future market design in the common Baltic electricity market:  Nord Pool Spot Baltic with three bidding areas, but one market area  Implicit auction between Baltic countries and towards Nordic Countries on a single trading platform  Harmonized imbalance settlement and imbalance pricing  Common reserves and balancing power market  Baltic retail market  Market place for financial tradeTarget: Baltic market design is consistent with the key elements of the Nordic market design 30.09.2011 Latvenergo Group presentation 23
  24. 24. Agenda: 1. Latvenergo Group in brief 2. Electric power market of Latvia 3. Baltic market 4. Renewable energy sources 30.09.2011 Latvenergo Group presentation 24
  25. 25. Renewable energy sources in Latvenergo fuel mix, 2010 Use of primary energy sources for electricity generation at Latvenergo AS power plants Gas (41%) RES (59%) 30.09.2011 Latvenergo Group presentation 25
  26. 26. Latvenergo AS hydroenergy on the river Daugava30.09.2011 Latvenergo Group presentation 26
  27. 27. The Daugava river The Daugava is the largest river in Latvia, sourcing in Russia and flowing through Belarus before it enters Latvia. Within Latvia it has a length of 250 km between the eastern border and the capital city of Riga where the river enters the Gulf of Riga. The hydro-electric potential of the Daugava has been developed by constructing low dams at three sites; Pļavinas, Ķegums and Riga, all of which are owned by Latvenergo, managed by the Daugava hydropower plants staff. 30.09.2011 Latvenergo Group presentation 27
  28. 28. Hydropower plants on the river Daugava (1) 30.09.2011 Latvenergo Group presentation 28
  29. 29. Hydropower plants on the river Daugava (2)  Pļaviņas HPP number of hydro units 10 Installed capacity 883,5 MW turbine type Francis maximum head 40 m lenght of the dam 4032 m 30.09.2011 Latvenergo Group presentation 29
  30. 30. Hydropower plants on the river Daugava (3)  Ķegums HPP Ķegums HPP consists of two hydro- power plants with the total capacity of 264 MW, lenght of the dam - 1978 m 30.09.2011 Latvenergo Group presentation 30
  31. 31. Hydropower plants on the river Daugava (4) Ķegums HPP -1 number of units 4 installed capacity 72 MW turbine type Kaplan maximum head 14 m 30.09.2011 Latvenergo Group presentation 31
  32. 32. Hydropower plants on the river Daugava (5) Ķegums HPP-2 number of units 3 installed capacity 192 MW turbine type Kaplan (with fixed blades) maximum head 14 m 30.09.2011 Latvenergo Group presentation 32
  33. 33. Hydropower plants on the river Daugava (6) number of units 6 installed capacity 402 MW  Riga HPP turbine type Kaplan maximum head 18 m lenght of the dam 15400 m 30.09.2011 Latvenergo Group presentation 33
  34. 34. Other Latvenergo RES plantsAinaži wind turbine –  installed capacity – 0.6 MWAiviekste hydropower plant –  installed capacity – 0.8 MW 30.09.2011 Latvenergo Group presentation 34
  35. 35. CO2 emissions per unit of electricity produced at Latvenergo AS power plantsThe overall emissions of CO2 by Latvenergo AS per unit of electricity produced in 2010 were 0.104 tCO2/MWhel, whereas the specific CO2 emissions of the combined heat and power plants (Riga TEC-1 and Riga TEC-2) per unit of electricity produced was 0.255 t CO2/MWhel. 30.09.2011 Latvenergo Group presentation 35
  36. 36. Regulatory framework to promote RES generation All RES generators (except large HPP) have the rights to sell electricity to public trader under feed-in tariff (FiT) scheme FiTs are much higher than market price. The extra funds needed to finance the scheme are raised from customers as RES promoting component To limit the rising expenses there are quota system for generators – maximum amount of electricity to be sold at FiTs No new quota from 2011. Plans to change promotion system 30.09.2011 Latvenergo Group presentation 36
  37. 37. RES feed-in tariffs in Latvia. No reflection to market price. 427.0 450.0 400.0 350.0 300.0EUR/MWh 250.0 204.2 200.0 170.4 162.4 150.0 104.3 100.0 50.0 0.0 small HPP WPP BIOmass BIOgas PV feed-in tariff market price 30.09.2011 Latvenergo Group presentation 37
  38. 38. RES market integration not a problem today 2010 2% 96% 5% 1% 1% 0% 0% Daugava HPP small HPP WPP BIOgas BIOmass PV30.09.2011 Latvenergo Group presentation 38
  39. 39. RES market integration solution needed in the future 18% 11% 2020 12% 1% 1% 0% 58% Daugava HPP small HPP WPP BIOgas BIOmass PV30.09.2011 Latvenergo Group presentation 39
  40. 40. Is there a RES market integration solution? Feed-in premium 90 All producers are in 80 the market and 70 compete with each 60 other 50 EUR/MWh The extra revenues RES producers 40 needed are raised by 30 the fixed “premium” 20 paid by TSO 10 Only cost effective 0 RES PP are built RES revenues Works good in market price feed-in premium Estonia 30.09.2011 Latvenergo Group presentation 40
  41. 41. Q&A ?30.09.2011 Latvenergo Group presentation 41
  42. 42. Thank you !www.latvenergo.lvinfo@latvenergo.lvLatvenergo ASPulkveza Brieza iela 12, RigaLV-1230, LatviaTel. +371 67728222Fax: +371 67728880 30.09.2011 Latvenergo Group presentation 42

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