Are Latvia's electricity prices really the highest in Europe?

Take note – story published 1 year and 6 months ago

During the recent election campaign period, the representatives of various parties claimed that Latvia has or has had the most expensive electricity in Europe. The former mayor of Ādaži, now member of the Saeima and potential minister of the new government, Māris Sprindžuks (United List) has also made the same claim, reports Re:Baltica for Latvian Radio.

But does the claim stack up, or is it just another case of assuming you're worse off than everyone else, or saying so for dramatic effect? Re:Baltica attempted to fact-check the claim.

On November 1, in the Riga TV24 program "On the line", Sprindžuks said: "The biggest obstacle at the moment is that the prices of energy resources in Latvia are the highest in Europe. No industry can survive without electricity. Therefore, it is the primary task of the country to organize its energy system and its capacity , so that our producers are more competitive. This is a very pressing issue, because we have been the most expensive in Europe with our energy resource prices for more than a year now."

The data of the statistical office of the European Union "Eurostat" suggests the claim is inaccurate. Eurostat collects information on the cost of electricity together with taxes and network costs for legal entities – including production companies. The latest data are available for the first half of this year. They show that prices have risen significantly in almost all countries, but the rise in Latvia is not among the highest. In Latvian companies, the price of electricity, together with taxes and distribution costs, was lower than in the European Union on average and lower than in Lithuania and Estonia.

It was the same in the second half of last year. On the other hand, even before the price increase, electricity was cheaper for Estonian producers. However, even then Latvia was not among the European leaders in terms of electricity prices.

Gunārs Valdmanis, executive director of the Latvian Electric Power and Energy Construction Association (LEEA), explains that the final price for different producers is affected by the connection capacity and load: "We have a relatively high subscription fee and, compared to neighboring countries, a lower fee for each transmitted unit. Therefore, we differ greatly in how different customers pay per megawatt-hour depending on how intensively they use it. Heavy consumers pay a lower price, while inefficient ones with low consumption with a powerful connection pay more."

Sprindžuks told the fact-checkers that his sources of information about the highest price in Europe were the companies of Ādaži region and also the data of the "Nord Pool" energy exchange.

In recent weeks, on the regional Nord Pool exchange, Latvia has had the second highest price after Lithuania. However, for most of the year, electricity was not the most expensive for us there either. It should also be taken into account that approximately half of legal entities purchase electricity not at the exchange's fluctuating prices, but by signing a contract for a certain term at a fixed price.

According to Eurostat data, the increase in electricity prices for Latvian households in the first half of this year was higher than for legal entities. For households, the price rose by almost 60% compared to the same period last year, which was the second largest increase in the European Union after the Czech Republic, as previously reported by LSM.

However, to say that Latvia's energy prices in general or electricity prces in particular have been the highest in Europe for an extended length of time is clearly not supported by the facts.  

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