Latvia is Europe's third-largest producer of renewable energy as a share of total energy resources (Eurostat, 2019), thanks chiefly to harnessing its hydroelectric power. On top of that, LIAA says it has been calculated that the Baltic Sea on Latvia's coast has the potential to generate up to 1100 megawatts in renewable wind energy, which is currently unused.
"With about 50% of the country's border being the coast of the Baltic Sea, and over half of the land covered with forest, the country's natural resources lend themselves well to develop clean energy solutions. Solar power currently accounts for 0.2% of contributions to the energy grid, though the potential can be measured in gigawatts," LIAA says.
"Renewable energy is a topic that has been prioritized at a both European and national level. Latvia has pledged to reach 50% renewable energy of its final energy consumption by 2030, and the Investment and Development Agency of Latvia has named it a priority sector, which benefits from eased policies, bureaucracy, and fast tracked paperwork, and more."
Acknowledging the potential of the Baltic Sea, and in an effort to combine resources for a cost-effective project, Estonia and Latvia have begun work to develop the first European cross-border infrastructure project – a shared offshore wind farm.
The wind farm, to be located in the Gulf of Riga, is expected to harvest 1 GigaWatt-worth of clean wind energy for Baltic use, which would translate to 3 TWh (Terawatt-hours) of renewable energy. The project is in its first stage of development, with a feasibility study underway to ascertain the best location and overall costs of the project. The location is expected to be within the Gulf of Riga, no closer than 15km to shore, ensuring that the area's biodiversity is not affected.
This project draws attention to what LIAA calls a "massive opportunity when it comes to taking advantage of the natural resources available". This potential has not gone unnoticed, with U.S. agencies highlighting the investment opportunity, LIAA points out:
“The most promising sectors for renewable energy equipment in Latvia are energy efficiency solutions, biomass power, wind energy, and energy produced in combined heat and power plants. Many stretches of the Baltic coast have wind conditions suitable for wind parks, especially offshore. Over half of Latvia is covered by forest, so wood biomass presents excellent potential for further development.” - The International Trade Administration in the U.S. Department of Commerce, Latvia – Country Commercial Guide
Latvia has the necessary energy infrastructure in place in order to harness smart renewable energy on the coasts and in the forests of Kurzeme, as well as collaborate with its Nordic neighbours in electrical trade. This is thanks to the recent completion of the Kurzemes Loks portion of the NordBalt submarine power cable project, which links the Nordic and Baltic electrical markets, thus ensuring higher rates of energy security.
While the implementation of offshore wind farms in Latvia is in its infancy, it is already the location for the Baltic Offshore Training Centre (BOTC), which is the leading GWO (Global Wind Organization) training center in the Baltic and Nordic region. Established in 2013, the center specializes in practical safety training and is internationally certified in accordance with the GWO.
Green tech, Green Channel
The smart renewable energy sector has consolidated into the Green Tech Cluster - an association made up of 66 members spanning 187M EUR in turnover and over 1800 employees. There are also other organizations in related sectors, such as the Wind Energy Association with lobbying and networking functions. Some of their members are major players in the wind energy sector, such as Latvenergo and Enefit Green, two Baltic state-owned energy organizations.
The Smart Renewable Energy sector has been named a priority industry to support in Latvia, both due to its correlation with various green initiative promises, as well as due to the expected economic contributions the sector would bring to GDP. For those reasons, several systems and infrastructure have been put in place to ease the way for the entrance of renewable energy investments into the country.
The “Green Channel” is a governmental initiative to fast track the bureaucratic aspects of green investment and business dealings.
According to LIAA the “Green Channel” initiative has already facilitated 98 million EUR-worth of investment, which is part of the 500 million EUR of investment that Latvia has seen in just the first 9 months of 2021 – since the “Green Channel initiative was launched.
To qualify for Green Channel fast tracking, which shortens the time for administrative procedures by half for territorial planning, residence permits and foreign workforce attraction, companies must fulfil 3 out of 4 criteria to apply for the support:
- The investment amount in 3 years should be at least 5 million euros (in Riga – at least 10 million euros).
- The investment project should create 75 new workplaces (in Riga–100) or 50 new workplaces (in Riga-75) with Latvia’s monthly average salary of the previous calendar year (published on the website of the Central Statistical Bureau of Latvia) multiplied with a coefficient of 1.5 (in Riga - the coefficient is 2).
- The planned product and service export amount in three years after the launch of the investment project should be larger than 3 million euros (in Riga – the amount is 5 million euros).
- The planned investment in R&D and employee competence development should be over 250 thousand euros.
Investors can learn more about the requirements and application process for the “green channel” here.