Analysis of Latvian Households’ Potential Participation in the Energy Market as Prosumers

Abstract

The European Union sets targets for the extensive use of renewable energy. Meanwhile, the energy production network is changing and transferring from the classic “producer to consumer” scheme to new operation models, where a small consumer with local renewable energy systems becomes a producer–prosumer, an active energy consumer who is also an energy producer. This study evaluated a potential of Latvian households’ participation in the energy market as prosumers. The analysis was based on an informal prospective extrapolation data evaluation method, based on real historical data from the Central Statistical Bureau of Latvia, annual reports of distribution and transmission system operators, assessments, and the conclusions of relevant experts. In addition, the real performance of a photovoltaic (PV) system was evaluated to get information on the whole year’s energy balance, and to compare it with seasonal electricity price fluctuation. The Latvian electricity transmission system is able to accept about 800 MW of additional new renewable energy source (RES) capacity, so there is a great potential for prosumers. The biggest obstacle for a household’s involvement in the energy market is the lack of support mechanisms and relatively high cost of RES technologies. The results show that with the current dynamics of new microgenerator connections, Latvia will achieve the set goals regarding the involvement of prosumers in the achievement of RES goals only in the next century. In order to attract the public to energy production, the concept of energy community needs to be defined in Latvian legislation, a balanced peer trading mechanism needs to be developed for various RES self-consumption groups willing to sell surplus electricity, and tax policy conditions need to be reviewed for electricity transactions outside the NET (payment system), in order to fully ensure the rights of prosumers.