The flagship of the electric trade industry in Latvia has launched a new initiative, explaining the future prospects in the energy sector. This time, in a conversation with the chairman of the board, Oleg Kolomijcev, we find out how public policy can affect the advancement of the electricity market, as well as how global processes are shaping it.
How has public policy affected the electricity industry and its development in recent years? Have there been any decisions that have delayed or, in contrast, facilitated growth?
A prime exmaple of state support was the program for solar panels three years ago. It initially generated significant public interest, but after the government shifted from net accounting to net settlement, that interest waned. positively, this change spurred interest in power storage solutions, like batteries, as electricity generation peaks in summer while consumption is higher in fall, winter, and early spring. The state also launched a support program for these storage solutions.
How did high inflation rates influence the development of the industry in recent years?
Prices for electrical work rose significantly, outpacing average inflation in the country. This was largely due to Covid-19 and the war in Ukraine, which disrupted global supply chains, creating shortages and price increases. The industry was more affected by these factors than by overall inflation,which was also driven by rising labour costs and fuel prices.
However, despite the price increases, the construction market continues to evolve and hasn’t declined. Projects co-financed by European Union funds are having a positive influence, and we’re also seeing growth in the construction of apartments and private houses.
Is there a high demand for some materials in foreign regions, resulting in material deficits here?
Currently, there’s high global demand for battery storage solutions. Waiting times for more sophisticated systems can be up to a year. High-voltage network infrastructure is also in high demand; supplies have always been long, but now they’re even longer, which is an significant factor when planning large construction projects.
Metal price increases and demand in larger markets also have an impact. For example, Poland, our closest cable producer, is experiencing high demand in its own market, which affects our supply times.
how can our country support its industry through policies and decisions?
We discussed the development directions for the country extensively at our first Baltic Energy Strategy Business Forum,where energy leaders from the Baltic States met to outline the prospects for our region. all industry players emphasized the need for a national energy strategy to provide clarity for 5, 10, and 20-year plans. The latvian energy Strategy 2050 document, developed by the Ministry of Climate and Energy (KEM), was adopted by the Cabinet in early summer.
Why is this strategy so important?
Because it establishes clear national priorities, allowing businesses to plan development and identify new opportunities. Such as, the Estonian government is committed to developing nuclear projects in cooperation with international partners and manufacturers, and has concluded a Memorandum.