The document summarizes recent developments in Latvia's electricity market. It discusses Latvia's goals of integrating its electricity market with the EU market and liberalizing its domestic market according to EU directives. It outlines plans to increase interconnections with neighboring countries. It then provides an overview of the leading electricity provider JSC Sadales tīkls, including its operations, customers, and targets to modernize Latvia's electricity network. Finally, it discusses the postponed opening of Latvia's electricity market to competition and trends in the industry.

1. 1
JSC Sadales tīkls
Electricity market update in Latvia
June, 2014

2. 2
Strategic goals of Latvian energy sector
Integration into EU energy market
Creation of common Baltic and Nordic
Energy market – Baltic energy market
interconnection
Liberalization of national energy market
from 2007 – in compliance with EU
directives

3. 3
OPERATING
PLANNED
850 MW
700 MW
Development of electricity network interconnections
Interconnections with Sweden,
Finland, Poland and Baltics
Market integration will enable
equal and transparent electricity
trading rules and effective
competition

4. 4
Sadales tīkls – leading electricity provider in Latvia
JSC Sadales tīkls is a part of state-owned power supply utility group Latvenergo
Reliable electric power supplier for households and business:
all seasons, any weather conditions

5. 5
Key company indicators
Total length of electricity distribution networks: 94 701 km
Employees: ~ 2 500
Turnover: 298 417 747 EUR
Ranked No. 3 in Companies Reputation Survey in Latvia (energy sector)
Ranked No. 59 in Companies Reputation Survey in Latvia (all business sectors)
Long-term business targets:
• implementation of a fully isolated electric network across Latvia;
• shift to smart technologies;
• significant improvements in management quality – the lowest level of
losses in distribution networks in the Baltic States.

6. Customers and open market structure
6
Consumption 6 500 GWh: 75% business / 25% households
900 000 customers: 10% business / 90% households
24 000 business
customers from
2007
870 000 households
will join in 01/2015
75%
25%
Electricity traders: 21
Electricity traders: 4

7. 7
Business
Consumption falls in production sector
28%
25%
29%
9%
2%
7%
Consumption in 2013 by sectors
Consumers
Production
Non-production
Trade
Agriculture
Others
Consumption trends 2012 vs 2013

8. 8
Total consumption in GWh remains at the same level
4 062 3 869 3 650 2 431 1 758
2 081 2 510 2 549 4 038 4 688
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
2009 2010 2011 2012 2013
Regulated tariff customers Market customers

9. Changes in structure of electricity suppliers
9
JSC Augstspriegumu tīkls is not the only supplier anymore
The number of local electric power plants and their output is growing
224
252
292
361
396 410
0
50
100
150
200
250
300
350
400
450
2010 2011 2012 2013 2013 01.06.2014
Local producers, number of stations
6 320 6 018 6 017 5 696
522 628 883 1 112
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
2010 2011 2012 2013
Local producers vs Augstsprieguma tīkls,
GWh
from Austrsprieguma tīkls from local producers

10. Market opening date postponed
10
21st of January 2014
All the legal basis necessary to open the market is approved:
• Amendments to the Electric Energy Market Law – the market is open as of
April 1, 2014
• Cabinet of Ministers regulations
3rd of March 2014
The market opening date is postponed => 1st of January 2015
The issue: electricity price compensation mechanism for low-income clients
Households

11. Latvia has the most customer friendly market model
11
Estonian model as a prototype
Recommendations of industry professionals for the market model:
• NORDREG – single bill, single contract and trader’s centralized model
• EURELECTRIC – trader as the central contact point
• EC & ACER – single bill
HouseholdsHouseholds
LATVIA ESTONIA
Trader provides:
• Single bill
• Single contract
• Single client service
Trader provides:
• 2 contracts:
• 1 with trader
• 1 with supplier
• 2 bills
• Trader may not provide
customer service

12. 12
Traders’ interest for households is high
Prior to market opening early in March: offers from 3 traders
Now: 4 traders
Traders mainly plan to compete with service, not prices
• 6 different tariff plans
• Possibility to buy electricity
for stock market prices
• Self-service portal = lower
prices
• Internet users as a main
target group
• Self-service on the portal
Packages: electricity +
Internet+ phone 4 tariff plans

13. 13
Infrastructure holder gets market communication function
Partner of traders
- ensures equal conditions for all
electric energy traders
- IT solution: a portal for traders
Adviser for costumers on new
market principles
− ad campaigns
− communication activities in
partnership with stakeholder
institutions and traders

14. 14
Industry trends in Latvia
• Energy efficiency and innovations
• Synergy between offers of IT and electric energy sectors
• Safety and energy independence of the state
• Growing need to educate consumers about opportunities
and offers of electric energy sector

15. 15
Thank you!
http://www.sadalestikls.lv
http://www.e-st.lv
E-mail: st@sadalestikls.lv
Tel.: +371 67726000
Address: Smerla iela 1, Riga, LV-1160, Latvia
/Sadalestikls
/ /sadalestikls
/company/as-sadales-t-kls