Latvia

Key facts

Latvia produces 6 321 GWh every year and imports 16.5% of it’s electricity consumption

Latvia is 14% electrified. [1]

The Latvian electricity to gas price ratio is 2.1 for industry and 2.7 for households. [2]

The Latvian electricity mix is composed of
  • Hydropower
  • Natural Gas
  • Biofuels
  • Solar PV
  • Wind

Current state of electrification

Residential buildings in Latvia

Buildings

  • Buildings represent the majority of the electric consumption: 41% for commercial and public services and 26.3% for the residential [3]
  • There is no available data for the number of heat pumps installed in Latvia, but the European Heat Pump Association estimates 4 000 heat pumps were sold in 2024 [4]

Industry

  • Industry represents 27.9% of the electric consumption [5]
  • The sectors are consuming the most electricity are: [6]
    • Woodworking, wood products, and paper: 0.5 to 0.6 TWh | 33% to 37% of industrial electricity
    • Food, beverage, and tobacco: 0.3 to 0.4 TWh | 18% to 22% of industrial electricity
    • Machinery, equipment, and metal goods: 0.2 to 0.3 TWh | 12% to 16% of industrial electricity
Transport — from the design

Transport

  • Transport represents 1.7% of the electric consumption [7]
  • The data for the total number of vehicles in Latvia is from the Official Statistics portal of Latvia. [8]
  • The electric fleet is composed of: [9]
  • 11 348 electric cars (+843 year on year) — this represents 1.41% of the ~803 760 passenger cars on Latvian roads
  • 438 light commercial vehicles (+85 year on year) — this represents roughly 0.46% of the ~95 000 light commercial vehicles on Latvian roads
  • 157 buses (+5 year on year) — this represents roughly 3.74% of the ~4 200 buses and coaches on Latvian roads
  • 30 trucks (+0 year on year) — this represents roughly 0.09% of the ~35 000 heavy trucks on Latvian roads
  • 1105 light electric vehicles (+0 year on year) — this represents roughly 5.53% of the ~20 000 motorcycles, mopeds, and light vehicles under 4 wheels on Latvian roads

Grid and flexibility

Transmission & Distribution

Latvia’s transmission grid, operated by Augstsprieguma tīkls, is structurally secure, having completed its synchronisation with Continental Europe alongside deploying utility-scale BESS in Rēzekne and Tume for balancing and boasts strong distribution reliability. [10] [11]
However, it faces localised connection bottlenecks driven by an unprecedented surge in renewable energy projects. With over 6 GW of solar and wind connection requests in the pipeline against a peak national demand of roughly 1 to 1.2 GW, hosting capacity at key substations is constrained.
To prevent severe curtailment while onboarding clean generation, grid operators are utilising flexible connection agreements, deploying storage, and investing in grid-enhancing technologies to expand overall hosting capacity toward 3.8 GW by 2030 [12]

Storage

Latvia’s BESS capacity is expanding rapidly, anchored by state transmission system operator AST’s 80 MW / 160 MWh utility-scale battery installations in Rēzekne and Tume to provide fast frequency regulation following the Baltic grid’s synchronisation with Continental Europe. [13]
The commercial pipeline is accelerating to address localized solar and wind congestion, led by hybrid facilities like European Energy’s 46 MW Saldus BESS and private merchant projects like Futureal’s 45 MW Riga portfolio.
Supported by EU REPowerEU funds and national net-billing programs, Latvia is aiming for over 300 MW to 500 MW of total battery storage by 2030 to unlock grid hosting capacity for up to 3.8 GW of clean generation. [14] [15] [16]

Smart meters

Latvia has installed more than 1.1 million smart electricity meters, achieving a national coverage rate of approximately 99% across all customer connection points [17]

Support schemes

Heat Pumps & Residential Buildings
Modernisation Fund Grant Programme & Social Climate Plan (Ministry of Climate & Energy / Altum) [18]

50%–80% direct CAPEX grants (up to €15,000–€20,000) for heat pumps, solar collectors, and building envelope renovations.

70% intensity for multi-apartment owners/energy communities; 80% for municipal/state buildings. Low-income and energy-vulnerable households receive prioritized higher grant caps.

Electric Vehicles (EVs)
Emissions Trading Instrument (EKII) & Social Climate Fund [19]

Direct purchase subsidies of €4,500 for new private BEVs (€2,250 for used BEVs) + €1,000 old vehicle scrappage bonus. Low-income/vulnerable transport users receive up to €15,000 for BEVs.

Tax benefits include 0% vehicle registration tax, 0% annual road tax, reduced corporate car tax rates, and free parking in Riga municipal zones.

Rooftop Solar & Home BESS
Altum Green Home Support Scheme [20]

CAPEX grants and soft loans covering up to 50% of equipment costs for solar PV and integrated home battery systems (~€1,000–€2,500 for storage).

Requires systems operating under the Net Billing framework (replacing the former net-metering scheme). Must be installed by certified green installers.

Utility & Grid Storage
REPowerEU & CEF Infrastructure Scheme (AST State-Aid) [21]

75%–100% EU grant coverage for state transmission TSO investments into large-scale BESS for system balancing and frequency regulation.

Backed 80 MW / 160 MWh of state TSO utility storage in Rēzekne and Tume to secure post-Russian-grid synchronization resilience.

Industrial Electrification
Altum Business Energy Efficiency & RRF Clean Tech [22]

Combined financial instruments: Commercial soft loans with a capital discount up to 30%–49% of loan principal upon achieving at least 30% energy/carbon savings.

Covers thermal process electrification, equipment fuel-switching, smart energy management systems, and onsite industrial RE generation.

Targets

Buildings

  • The updated NECP sets a national target of 57% renewable energy in total final energy consumption by 2030. Building decarbonization focuses on replacing individual fossil/gas heating with heat pumps (targeting thousands of residential retrofits via Altum grants) and expanding district heating electrifications, as outlined by the Latvian Ministry of Climate and Energy NECP Framework. [23]

Transport

  • Latvia targets a 15% reduction in transport GHG intensity by 2030, pushing the share of electricity in road transport from under 1% to 5.9% by 2030, alongside a 5.5% mandate for advanced biofuels and public transport electrification (e.g., Riga metropolitan rail and bus transit overhaul), as detailed in the Latvia Updated NECP [24]

Industry

  • Latvia has no explicit percentage target for industrial electrification. Instead, industrial decarbonisation is guided by broader EU RED III requirements (e.g., RFNBO/green hydrogen quotas for industrial use) and Altum financial instruments, which mandate a minimum 30% carbon/energy intensity reduction for thermal process electrification and fuel-switching projects, as covered in the European Commission Assessment of Latvia’s NECP. [25]

Gaps and Challenges

While Latvia boasts a highly renewable power generation profile, rapid additions of solar and wind generation are creating acute localised substation constraints. TSO Augstsprieguma tīkls (AST) has reached near-zero firm hosting capacity at key connection nodes. To manage these queue bottlenecks without triggering severe curtailment, grid operators are leveraging flexible/non-firm connection agreements, deploying 80 MW of state utility storage in Rēzekne and Tume, and rolling out grid-enhancing technologies to expand network hosting capacity.

While biomass and fuelwood supply a large share of industrial thermal energy, transitioning high-temperature drying, kilns, and process heat to direct electric equipment requires substantial up-front CAPEX. Progress is hindered by the total absence of national sub-sector electrification targets, volatile wholesale power prices, and an underdeveloped corporate Power Purchase Agreement (PPA) market.

Transport remains Latvia’s least electrified sector. While passenger EV adoption is accelerating with BEV and PHEV sales, reaching 19.3% of new registrations in 2025, the total fleet turnover remains slow due to low average household purchasing power and an aging vehicle stock. Heavy freight electrification remains virtually non-existent (0.3% e-truck market share) due to high vehicle procurement premiums and depot charging grid bottlenecks, though rail transit is advancing through the deployment of 32 new electric multiple units and battery-electric passenger trains.

Assessment

Buildings

On track

High renewable heating baseline (>61% via district heating biomass and air-source heat pumps) supported by generous Altum and Modernisation Fund grants (50%–80% CAPEX coverage up to €15,000–€20,000).

Transport

At risk

Electricity accounts for <2% of transport energy use. Passenger EV sales are growing, but heavy freight electrification is virtually stalled and highway DC fast-charging coverage requires further expansion along Baltic corridors.

Industry

At risk

Dominated by forestry and timber processing with strong biomass usage, but lacks dedicated sub-sector electrification targets, mandatory fuel-switching roadmaps, and structured PPA de-risking tools for high-CAPEX equipment.

Power system

On track

Over 54%–75% clean domestic power generation (led by Daugava hydro, biomass CHP, and rapid solar growth), minimizing fossil fuel import risks following Continental Europe grid synchronization.

Grids

At risk

Successful Baltic grid synchronization and 80 MW TSO BESS deployment, but 6 GW of renewable queue requests severely overload local substation hosting capacity until AST’s 3.8 GW grid expansion completes.

Policy framework

On track

Clear 2030 NECP targets (57% total RE share, 61% RE in heating/cooling), Altum capital discount loan instruments, and active utilization of EU REPowerEU and Social Climate Fund resources.

  1. 1IEA, “Country profile: Latvia”, accessible here.
  2. 2European Commission, “Electrification Action Plan”, accessible here.
  3. 3IEA, “Country profile: Latvia”, accessible here.
  4. 4EHPA, “2025 European heat pump market report”, accessible here.
  5. 5IEA, “Country profile: Latvia”, accessible here.
  6. 6Odyssee mure, “Energy profile Latvia”, accessible here.
  7. 7IEA, “Country profile: Latvia”, accessible here.
  8. 8Official statistics portal, "Passenger cars", accessible here.
  9. 9European Commission, “Alternative Fuels observatory”, accessible here.
  10. 10AST, “AST BESS”, accessible here.
  11. 11EST, “Balancing generation and consumption will be one of the big energy challenges of 2025”, accessible here.
  12. 12Artelys, “Integration of renewable energy in the Latvian grid”, accessible here.
  13. 13AST, “Batteries”, accessible here.
  14. 14European Energy, “European Energy divests combined solar and battery park in Latvia to Sampension”, accessible here.
  15. 15CIJ World, “Futureal Energy Partners Acquires Energy Storage Portfolio in Latvia”, accessible here.
  16. 16Artelys, “Integration of renewable energy in the Latvian grid”, accessible here.
  17. 17EST, “Latvia’s smart electricity meter roll out completed: metering of more than 1 million connection points happens remotely”, accessible here.
  18. 18Altum & Ministry of Climate and Energy (KEM), "Daudzdzīvokļu māju un privātmāju energoefektivitātes uzlabošana un pāreja uz RES", accessible here here
  19. 19Emissions Trading Instrument (EKII) & Ministry of Climate and Energy, "Atbalsts bezemisiju un mazemisiju transportlīdzekļu iegādei", accessible here here
  20. 20Altum (Development Finance Institution), "Privātmāju energoefektivitāte un mikroģenerācijas atbalsta programma", accessible here here
  21. 21AS "Augstsprieguma tīkls" (Latvian TSO - AST), "Battery Energy Storage System (BESS) Project in Rēzekne and Tume", accessible here here
  22. 22Altum (Development Finance Institution), "Energoefektivitātes aizdevums uzņēmumiem ar kapitāla atlaidi", accessible here here
  23. 23Ministry of Economics Republic of Latvia, “National Energy and Climate Plan for 2021-2030”, accessible here.
  24. 24Ministry of Economics Republic of Latvia, “National Energy and Climate Plan for 2021-2030”, accessible here.
  25. 25Ministry of Economics Republic of Latvia, “National Energy and Climate Plan for 2021-2030”, accessible here.