Latvenergo AS is establishing a subsidiary “Latvenergo Kaubandus” OÜ (Latvenergo tirdzniecība SIA. (Latvenergo trade)) in order to start making use of the open market business opportunities opening up as a result of the formation of the Baltic regional electricity market, which is promoted by the implementation of the European Union market liberalisation directives. Specialists forecast that in about two years a systematic change of suppliers will begin in the Baltics, and preparatory work for this process should be started in due time.
The new enterprise plans to lunch operations in late summer, after the licence for operations in the neighbouring country has been received. Diversification of the electricity supplies as well as conquering new markets for the electricity produced at Latvenergo is the main goal of forming the subsidiary.
Initially the company “Latvenergo Kaubandus” will focus on purchasing electricity from Estonia’s small producers but later on, when the neighbouring state has opened its electricity market more widely, the company will also be selling electricity to consumers.
The formation of “Latvenergo Kaubandus” will allow Latvenergo to develop a more favourable electricity purchase procedure from Estonia’s small producers, thereby promoting competition among market players. The neighbouring country has established a new support procedure for the producers that use as fuel renewable energy resources, such as wind, hydroelectricity, biogas, peat and waste. The new support procedure will urge the supported Estonian producers to sell the generated electricity on the market. In the coming years, the amount of electricity generated by these producers is expected to amount even to one TWh (terawatt hour) per year.
“Latvenergo Kaubandus” will strive for offering to Estonia’s producers electricity purchase options that are more competitive than the offers of the local electricity generators. Successful activities on the neighbouring country’s electricity market will also offer better chances of effectively utilising the resources of the Daugava hydroelectric power plants during the so-called rush hours and spring flood periods.
As of 1 July of this year, Latvia will open the electricity market to all consumers and following the European Commission's directive, the legal separation of transmission and distribution systems has to be finalized and third parties must be guaranteed free access to the electricity transportation infrastructure. Latvenergo is already ready for this process - it has set up a legally independent transmission system operator Augstsprieguma tīkls AS whereas a legally independent distribution system operator Sadales tīkls AS will launch operations on 1 July, 2007.
Andris Siksnis, Latvenergo AS
Head of the External Communications Division
Department of Communications and Marketing
Ph.: 7728811; 29286350
