Electricity prices - Latvia

Latvia’s Evolving Electricity Market: A 2023–2025 Snapshot

Latvia’s electricity sector has seen remarkable transformation in recent years, with renewable energy now at the heart of both domestic supply and policy direction.

Power Generation: A Renewable Stronghold

Latvia stands out in the EU for its high share of renewables in electricity generation. In 2023, over 77% of the country’s electricity came from renewable sources, led by hydropower, which alone accounted for around 62%. Wind and solar are growing rapidly—solar output in 2023 was nearly 5 times higher than in 2022, and wind generation increased by over 40% year-on-year.

This surge allowed Latvia to cover 88% of its domestic electricity consumption with local production, reducing reliance on imports and natural gas-based generation.

Policy Push: 100% Green Electricity by 2030

Latvia’s newly established Ministry of Climate and Energy has set a bold target: 100% renewable electricity by 2030. To achieve this, the government is:

• Accelerating onshore and offshore wind projects
• Rolling out grid access reforms
• Offering community compensation schemes for wind development
• Supporting rooftop solar via grants and a simplified net-metering system

Latvia is also partnering with Estonia on the ELWIND offshore wind project, which could add 1,000 MW of capacity in Latvian waters by the end of the decade.

Electricity Prices: Structure and Stabilization

Electricity prices in Latvia consist of:

• Energy cost (market-based, varies by supplier/contract)
• Transmission and distribution tariffs (regulated)
• VAT (21%)
• Previously, a renewables support fee (OIK) was included, but since 2023 it’s been removed from bills, with the state covering the cost.

To buffer consumers during the 2022–2023 energy crisis, the government also subsidized electricity prices, reduced grid fees, and protected vulnerable users with additional discounts.

Dynamic Tariffs: Flexibility Meets Technology

Latvia is among Europe’s leaders in dynamic electricity pricing, thanks to its nearly universal smart meter rollout. Consumers can choose hourly pricing contracts tied to Nord Pool market rates—enabling savings by using power during cheaper hours.

Top providers offering dynamic tariffs include:

• Elektrum – “Dinamiskais” plan, 100% green, real-time monitoring
• Tet – “Dinamiskais”, includes an app widget to track hourly prices
• Enefit – “Biržas cena”, no markup per kWh, popular with businesses
• AJ Power – “Birža”, renewable-backed with low fees
• Ignitis – Dynamic plans for homes and businesses

Dynamic plans have become especially popular as market prices have fallen in 2023 and 2024. Many users now actively shift consumption—like EV charging or laundry—to off-peak hours for better rates.

In Summary:
Latvia’s electricity market is becoming greener, smarter, and more flexible. With growing renewable capacity, transparent pricing, and strong policy support, the country is on track to become a regional leader in clean energy and consumer empowerment by 2030.

Peak and Off-Peak Hours

Latvia 2024 – Average Hourly Wholesale Electricity Price (Nord Pool)

What the chart shows at a glance

About the two peaks

Even though the morning peak is sharp, the evening peak is both higher and broader, making it the costliest period of the day on average through 2024.

Why this pattern is typical for Latvia & the Nord Pool Baltic area

1. Demand profile – The Baltic load curve is dominated by residential customers: breakfast‑time ramp and a longer after‑work peak.
2. Supply mix – Latvia leans on hydro, CHP (natural gas/biomass) and imports. Hydro is flexible but limited; CHP and imports get pressed into service during the peaks and have higher marginal costs.
3. Limited midday solar smoothing – Unlike southern Europe, Latvia’s installed PV capacity is still modest, so solar doesn’t flip the curve into a “duck‑shape”. It only carves a small dip around 13‑15 h.
4. Interconnector bottlenecks – When Finnish or Swedish prices are low, Latvia can’t always import enough through Estonia–Latvia lines in the evening, so local/baltic generators with higher bids set the clearing price.
5. Weather‑driven heating – In winter (when averages are highest), electric heat pumps and space heaters amplify the evening demand bulge.

Practical take‑aways for households & small businesses

• Cheapest hours: roughly 01‑06 h and, on many days, 13‑16 h. Schedule dishwashers, water‑heaters, EV charging or other flexible loads here.
• Avoid if you can: 09‑11 h and especially 19‑22 h, when electricity costs about twice the deep‑night rate.
• Automation pays: a simple timer or smart‑plug that shifts 3 kWh of EV/dryer load from 20 h to 03 h would have saved ≈ €75 over 2024 (3 kWh × 365 days × 0.07 €/kWh price gap).

Looking forward

If Latvia’s solar and wind build‑out continues and new LV‑SE interconnectors go live (e.g., the planned Nordic‑Baltic grid reinforcements), expect:

• Deeper midday dips as PV penetration rises.
• Shallower evening peaks once flexible resources—battery storage, demand response, Latvian pumped hydro—can arbitrage the high evening prices.

Until then, the twin‑peak profile will likely persist, so time‑of‑use awareness remains the simplest way to trim your electricity bill.