Bionergy in Latvia: sector value and impacts
2016
Melece, L., Latvia Univ. of Agriculture, Priekuli, Priekuli parish, Priekuli Municipality (Latvia). Inst. of Agricultural Resources and Economics | Krievina, A., Latvia Univ. of Agriculture, Priekuli, Priekuli parish, Priekuli Municipality (Latvia). Inst. of Agricultural Resources and Economics
In order to meet the mandatory targets towards renewable energy sources (RES), Latvia, like many EU countries, facilitates energy production from renewable sources. Apart from the contribution to RES targets, the development of bioenergy in Latvia has presented business opportunities from one side and public burden from another side. The paper examines the value of bioenergy production sector in Latvia and some of its main impacts – the public service obligation (PSO) arising from the public support to the bioelectricity sector, as well as savings stemming from the use of fuelwood. Suitable qualitative and quantitative research methods have been applied to the studies. The authors have attempted to evaluate the approximate value of the bioenergy production sector in Latvia in 2014 based on the main production flows in biofuel, bioelectricity and bioheat sectors. According to the evaluation, the total bioenergy production sector value in Latvia was almost 690 million EUR in 2014. The majority of this value is generated by the heat sector (heat produced from fuelwood; consumption of fuelwood by industry, construction, and households; export of fuelwood), followed by the biofuel sector (produced biofuels; export of rape seeds) and the bioelectricity sector (mandatory purchase of electricity from biogas and biomass). Latvian bioenergy sector is export-oriented to a large extent; there is especially high value of the export of fuelwood, mostly wood pellets. The obtained results reveal that PSO boosts the price of electricity in the manufacturing sector of Latvia by about 8 %, while making only 0.2 % in the analyzed costs structure. At the same time, electricity prices of large industrial consumers in Latvia are higher than the EU average by about 6-9 %, which affects the cost competitiveness of Latvian manufacturing enterprises. The theoretic value saved due to the use of fuelwood (mainly firewood) instead of natural gas, arising from the lower price of fuelwoods versus natural gas, was evaluated at somewhat 407 million EUR in Latvia in 2014.
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