Eliminates OIK consent for cogeneration plant in the Ādaži / Article / LSM.LV district

The Ministry of Economic Affairs (EM) has decided to cancel the permit for SIA Balteneko for the production of renewable energy (AER) cogeneration plant in the Ādaži district for the sale of electricity in the context of compulsory purchasing, informs the EM.

Compulsory Procurement Component (OIC)

Compulsory procurement is a state aid mechanism for electricity producers in cogeneration installations or renewable energy sources.

The state buys electricity in the context of compulsory purchasing, paying a guaranteed fee for installed power plants, balancing costs and administrative costs.

These costs are in turn borne by all end-users of electricity in relation to their electricity consumption as the payment of OIK.

The size of the OIC is influenced by the price of natural gas, the price of electricity at the plant and the electricity consumption. From 2018, the system of OIC has been changed – the payment of pre-electricity users is tied to consumed energy as a specific rate for every kilowatt hour consumed. From this year onwards, the OIC will pay both a fixed rate for every kilowatt hour consumed – and this fee is reduced – as a "power OIC for amplifiers", which is a fixed tariff for the connection capacity. The higher the connection capacity, the higher the fixed costs.

The authorization to sell electricity in compulsory purchase "Balteneko" was canceled because the trader did not enter into a contract with a public trader and did not enter into force within the aforementioned three months.

So far, the ministry has abolished the permits for 26 power plants as a whole, so that the increase in the total cost of the Compulsory Procurement Component (OIK) is prevented in the next 10 years by approximately 384.5 million euros, according to EM.

EM inspections of 40 nuclear power stations in cogeneration units were started in October 2017 after publicly disclosed information on the non-compliance of individual cogeneration installations.

Last December, three power plants – Elektro Rīdzene Ltd in the Cesis region, Energo Fortis in the Livani district and SIA "E Strenči" in the Strenci region – were canceled. However, licenses for power plants SIA Madonas Eko in the Madona district, SIA "Euro-Asia Investment Agency" in the Aluksne region, Evokem Ltd., were still being canceled this year. in the district Livani, SIA "M-parks" in the Amatas region, SIA "Eco Latvis" in the district of Tukums, Baltekogen "for three power plants in the provinces of Rauna, Kārsava and Ludza, Tektus Ltd. in the Amatas region, Digne Ltd in the Vecumnieki district, Atauga-G Ltd. in the Olaine region, Krustpils AER Ltd. in the Krustpils region, Pellets Energy Ltd in Talsi In the region, SIA E Seda, in the Strenci region, SIA "Rīgas enerģija" in Riga , "AM Energy solution" in the district of Vecumnieki, "Briedis būve" in the Saldus district, "Barkavas enerija", Ltd. for two power plants in the Madona region, SIA "Jumis GEO" Region Kārsava, "AM Energy Solution-Aloja" Ltd. and "Energy Solutions" Ltd in the Alojas region.

EM recalls that if the electricity producer does not sell electricity in compulsory tenders, he has the right to operate under free market conditions and agree with an electricity trader on the sale of electricity at an agreed price. Likewise, the producer in the cogeneration station can continue to produce and sell heat at a price agreement with the buyer and user of heat energy.

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