In Latvia, RES-E generation is stimulated through a complex support system based on a feed-in tariff, which also includes elements of a quota system and tenders. Since 2010 the existing support scheme is on hold and closed for new installations due to concerns about lack of transparency in the way it was carried out since 2007 and due to very high costs that the support system causes for the Latvian economy and households. At the same time, several litigation cases are currently underway against the existing renewable energy scheme. Inter alia, Attorney General of Latvia has asked the Constitutional Court to declare the compulsory procurement component (OIC) or subsidised electricity regulation inappropriate for Latvia's Constitutional Law.

Since 2010 share of renewable energy in gross final energy consumption increased by 5%. However, the costs for the promotion of renewable energies in 2017 amounted to 266 million euros or approx. 1% of GDP. The state support mechanisms for energy production are being assessed and revised and on 14. August 2018 Ministry of Economics presented to the Cabinet of the Ministers a new plan, which foresees to abandon mandatory procurement component in Latvia by 2021, as well as to reduce support for renewable energy from the current 1% of GDP (GDP) to 0.3% of GDP. However, the newly elected government did not accept this plan and in the beginning of 2019 they issued a statement urging the Ministry of Economics to draw up regulations to rescind the mandatory procurement component in electricity tariffs as of 31 March 2019. After consultation process with the parties involved and the European Commission, as well as independent third-party assessment of the legal aspects of the cancellation of the mandatory procurement component, the Ministry of Economics presented to the Cabinet of the Ministers a draft law to abolish mandatory procurement 20 March 2019. However,it was refused by the Cabinet of Ministers and the Ministry of Economics was asked to develop further proposals for the abolition of the existing support system within two months. There is a ongoing process of uncertainty at the moment, which is paralysing the entire development of the industry. The Latvian Association of Heat Producers has stated that the heating energy tariff is expected to increase by 20% to 40% in case of abolition oft he existing support system. In addition, the information provided by the TSO 'Augstspriegumu tīkls' shows that the closure ofall subsidised power plants would increase the wholesale price of electricity in Latvia. At the same time, Latvia would probably not meet the target for renewable energy by 2020 and in the subsequent years. Last but not least, the Latvian Renewable Energy Federation (LAEF) has announced that with the abolition of mandatory procurement, all producers with installed capacities of at least 1 MW will be shut down and other producers will maintain their activities only on favourable terms.

It is extremely important to establish a long-term strategy and support scheme for renewable energy, to ensure the development of the sector. According to Latvian Wind Energy Association, the most appropriate solution for the Latvian market would be technology-neutral premium feed-in tariff.

Financers, be it private investors or banks, are held back to invest in the renewable energies as the current policy since 2011 is unpredictable and offers no long-term vision. The existing feed-in tariff is under revision and closed for newcomers since 2011 without certainty on the future project support. Amendments to the Regulation on Electricity Production and Price Determination Upon Production of Electricity in Cogeneration (Regulation No. 221) and the Regulation on the Production of Electricity Using Renewable Energy Resources and the Procedures for Price Determination (Regulation No. 262) have introduced stricter supervision of subsidised electricity producers, more stringent controls and a limited timeframe for the implementation of RES projects (within 10 years at most). The government speaks of the abolition of mandatory procurement, which further exacerbates the general situation.

At the moment, there are almost no investments in RES in Latvia. In order to improve this situation long-term trustable strategy and support scheme must be developed.

Same as in 2014 and 2018, stakeholders reported that the overarching barrier affecting RES-E, and directly or indirectly impacting on all project development steps, is absence of a general strategy and legal system for developing renewable energy. The current support system is under revision since 2011 without certainty on the future project support and with possible retroactive effect for existing production plants, the newly elected government is working on abolition of the existing mandatory procurement. In the coming weeks, the Ministry of Economics should present the new plans to the government. Although the Latvian Energy Long-Term Strategy 'Competitive Energy for Society' indicatively mentions renewable energy target for 2030, namely 50% of renewable energy in gross final energy consumption and Energy Development Guidelines 2016-2020 foresee inter alia an increase in the share of RES in final energy consumption up to 40% in 2020 and up to 50% in 2030, and an increase of the RES-share in the transport sector up to 10% by 2020, and the National Renewable Energy Action Plan (NREAP) published in 2009 sets a general legally binding RES-target of 40% in final gross energy consumption by 2020, it is still completely unclear how renewable energies will be promoted in Latvia in the future. Amendments to the Regulation on Electricity Production and Price Determination Upon Production of Electricity in Cogeneration (Regulation No. 221) and the Regulation on the Production of Electricity Using Renewable Energy Resources and the Procedures for Price Determination (Regulation No. 262) have introduced stricter supervision of subsidised electricity producers, more stringent controls and a limited timeframe for the implementation of RES projects (within 10 years at most).

Renewable Energy Law should be introduced as soon as possible to ensure long-term clarity and reliability in RES sector.

The most important barrier affecting RES-H in Latvia is the high share of fossil energy. Up to 2017 one DSO and TSO AS Latvijas Gaze were granted exclusive rights for the transmission, distribution and storage of natural gas. Indeed since 2017 the Latvian gas market is fully liberalised. The Cabinet of Ministers approved amendments to the Energy Law (Enerģētikas likums) on September 2015 designed to separate activities of natural gas transmission system operator and storage system operator from the activities related to the distribution or sale of natural gas; eliminate the potential risks of the strategically important natural gas transmission and storage system availability, if they are used as a tool of political influence from third parties; define requirements and obligations for operators acting in the open natural gas market, where users are free to choose a natural gas trader and buy natural gas at a price fixed by mutual agreement between market participants. Furthermore, in September 2016 the Cabinet of the Ministers approved new regulations on "Requirements for injection of biomethane and liquefied natural gas into the natural gas transmission system” (“Prasības biometāna un gāzveida stāvoklī pārvērstas sašķidrinātās dabasgāzes ievadīšanai un transportēšanai dabasgāzes pārvades un sadales sistēmā“). These regulations provide the renewable energy industry with the opportunity to engage in gas supply and sale, using the existing Latvian natural gas pipeline infrastructure. However, it is associated with high costs for the RES producer, because currently there is no facility in Latvia that can produce biomethane. At the same time there are no new policies and regulations introduced to support RES since 2011, wenn the existing support systeme was closed for new companies. No new development could be detected for this barrier in 2019.

Renewable Energy Law should be introduced as soon as possible to ensure long-term clarity and reliability in RES sector.

The main barrier reported under this category is the absence of policy instruments and a long-term strategy for biofuels since 2011. Biofuels are the most important renewable energy source used in the transport sector in Latvia, however both the "Biofuel Production and Use in Latvia (2003-2010)" program and the national support programme "Aid for Biofuel Production" ended in 2010, but there are still no new support schemes in place. For almost seven years there has been no clear information on policy instruments for biofuels. This hampers investments in new biofuel-producing facilities. As for now, investments in the production of biofuels are no longer economically feasible. The Latvian market for biofuels is very uncertain right now. The state aid is still very important for the deployment of this market, since it is not mature yet. The situation regarding the aforementioned barrier has not substantially evolved since January 2019.

Renewable Energy Law should be introduced as soon as possible to ensure long-term clarity and reliability in RES sector.

The development of the sector is slow and besides of tax benefits and some regional advantages there is no long-term mechanism to promote and support the development of vehicles powered by electricity from renewable energy sources. In the last years, the Ministry of Environmental Protection and Regional Development released tenders for electric cars and chargers for electric cars. In 1.01.2018 there were 406 e-vehicles registered in Latvia. Since 11.04.2016 within project “Development of charging infrastructure for electric vehicles“, a network of charging stations is already partly installed on national level. This project willl be further implemented in several phases until 2021. Within first round 70 fast charging stations for electric cars on the main state roads or near settlements with a population over 5,000 have been installed.

Long term strategy for e-mobility and support scheme should be introduced.