Overall assessment

Latvia will receive up to 300 million EUR from the Modernisation Fund. Investments will go to decarbonisation of non-ETS sectors. The priority will be given to zero-emission vehicles, energy efficiency and renewable energy promotion measures for commercial sector, modernisation of electric grids, renewable energy promotion in multi-apartment buildings as well as municipal and state buildings.

Detailed assessment

General: allocation, definition, transposition

Specific allocation for energy communities

For the period of 2023-2028 three priorities for investments under the Modernisation Fund have been selected. The third priority is the promotion of renewable energy production in multi-apartment buildings, municipality and state buildings, as well as energy communities: “Promotion of the use of renewable energy resources in multi-apartment buildings, state and municipal buildings, and energy communities, including support for the creation of infrastructure related to their operation.

Definition of energy communities in line with EU legislation

Draft regulation on energy communities has been prepared and public consultations have taken place, experts discussions are continuing. Thus, it is expected that the regulation will be in force in the coming months. The draft regulation overall provides a good basic framework: It is liberal in nature, providing rather wide range of possible participants in the energy community.

However, the draft regulation still has some unclear elements, which if left with no further clarification could serve as an obstacle for development of energy communities with higher number of participants or more diverse participants. One significant downside is the requirement for all members of energy community to have a contract with one electricity provider, which would be impossible for an energy community composed of higher number of citizens. The ministry strives to adopt a regulation rather sooner, as it is needed to launch several programmes under Cohesion policy, but it is clear that the regulation will need to be improved after the first basic version is adopted.

Proportionality of share of total fund allocated to energy communities

That level of detailed information is not available yet.

Availability of tailored financing tools

There are no different, tailored financing tools available that fit different situations (e.g., loans, guarantees, blended finance). Only grants are provided as a one time payment.

Link to a wider scope of activities and objectives

Link between energy communities, building renovation and energy efficiency

Not enough focus is given to the deep energy savings that energy communities can achieve. Building renovations are not identified as a top priority. Moreover, energy efficiency is not linked with energy communities.

Recognition of energy communities under multiple objectives

Energy communities are not recognised under multiple objectives (I.e., GHG reduction, energy savings, technological innovation, tackling energy poverty). Instead, they are linked only with the objective of 'renewable energy production'. However, the new draft
regulation on energy communities provides a link with energy
poverty through the requirement for municipalities to direct a part of
the electricity it produces, or the profits made within the energy
community to the support of vulnerable members of society.

Transparency and inclusiveness

Holistic strategy to provide financing across different levels of project development

Currently there is no holistic strategy to provide financing across different levels of project development (i.e., facilitating grid acess, one stop shops, awareness raising & capacity building, pilot financing, administrative, business model and legal advice). However, this might change as specific rules for investment programmes, which involve energy communities, will be developed.

Transparency of the design and communication of the schemes and measures

An opportunity to provide feedback has been provided, but it is too early to assess the broader transparency of the program.

Selection criteria and the prioritisation of various social components

It is not yet clear how inclusive the selection criteria will be for projects to be funded under the Modernisation Fund.

Decentralised tender process

The programs are managed in a centralised manner.

Existence of procedures to facilitate the participation of energy communities in open calls

The process has not developed that far yet.

Stability and predictability of the programme through time

The process has not developed that far yet.