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Detail – Energy Country Profile

Latvia introduces tax on renewable energy subsidies

The Latvian Cabinet of Ministers has approved the introduction of a new "Subsidized Energy Tax" that will be paid by companies receiving a financial support for power generation from renewable energy sources or from CHP.

This tax is aimed at compensating the growth of the mandatory procurement component (MPC) for households and Latvian companies, which should increase from LTL1.89c/kWh (€2.69c/kWh) in 2013 to LTL2.46c/kWh (€3.50c/kWh) in 2016, i.e. a 30% growth. The tax will have three different rates, set at 15% for gas-fired generation and at 10% for renewable power generation; the rate applied to central heating systems will be 5%. The tax, which remains to be approved by the Parliament, should be applied between April 2014 and late 2017. A social support mechanism will be offered to poor households (by means of apartment benefits), to limit the potential increase in tariffs following the full opening of the electricity market in 2014.

Source: 20 September 2013