Electricity prices - Latvia

Latvian Electricity Market

Generation Sources

Latvia’s power system is overwhelmingly renewable. Hydroelectric plants on the Daugava and other rivers are the single largest source. In 2023 hydropower produced about 3,794 GWh, roughly 62% of Latvia’s electricity. In wet years this share can rise even higher. Other renewables contribute the rest: wind farms generated about 271 GWh in 2023 (≈4%) and solar PV about 239 GWh (≈3–4%). Taken together, renewables (hydro + wind + solar + biomass) supplied roughly 77.6% of all generation that year.

The remaining generation comes from combined heat-and-power (CHP) plants and small non-renewables. CHPs (mostly gas-fired plants, some using wood or biogas) produced about 2,083 GWh in 2023. Of this CHP output, roughly 477 GWh was from biomass (wood/biogas) and 182 GWh from biogas, with the rest (~1,424 GWh) from natural gas. These gas plants run mainly in winter to meet heat and peak electricity demand. Imports typically fill the balance between consumption and domestic output (in 2023 local generation covered ~88% of use).

Wind power is growing but still modest. Latvia’s wind farms generated about 271 GWh in 2023. Solar PV was ~239 GWh. Together with hydro and biomass, this lifted the renewable share to ~77.6%.

End-Customer Price Components

A household or business electricity bill in Latvia consists of three main parts: the energy charge, network (transmission/distribution) fees, and taxes. The energy charge reflects wholesale prices (Nord Pool spot rates) plus any supplier margin; it typically makes up roughly 50–70% of the final bill. Transmission and distribution tariffs (set by the regulator SPRK) account for about 20–30%. These network fees include a fixed capacity charge (depending on connection size and voltage) and a variable per-kWh delivery fee. For example, as of 2024 the main DSO (Sadales tīkls) “basic” tariff for a 16 A single-phase connection includes a monthly fee of about €3.92 plus €0.04794/kWh (incl. VAT). Network charges were recently adjusted: SPRK reports that distribution tariffs on average fell ~1% as of Jan 2024, while transmission fees were set separately by the TSO.

Taxes and levies add the rest. Latvia applies the standard VAT of 21% on electricity (and on network fees). There is also an excise-like electricity tax (≈€1.01 per MWh) on most delivered power, intended as a carbon disincentive. However, as of Jan 2023 this tax is exempt for household consumption. (Non-residential and net-metered generation users generally still pay it.) Any environmental surcharges (e.g. feed-in tariffs) have been phased out in recent years. In sum, a typical household bill might be ≈55–65% energy price, ≈20% network fees and ≈15–20% VAT/other taxes, with small variation by usage and tariff structure.

Dynamic (Time-Variable) Tariffs

“Dynamic” or time-variable tariffs charge consumers on a variable rate that follows market prices (rather than a flat fixed rate). In practice, Latvian dynamic tariffs simply pass through the Nord Pool day-ahead spot price (Latvia is in the Baltic bidding zone of Nord Pool). Most suppliers compute the customer’s monthly bill by aggregating the previous month’s hourly Nord Pool prices weighted by that customer’s consumption profile. (Customers with smart meters pay each hour’s actual price, so their billed average price reflects their own load shape. Those without smart meters are billed on a typical usage profile supplied by Sadales tīkls.) In either case, the outcome is that the effective price per kWh each month closely tracks the Nord Pool spot trend – typically slightly above the pure average spot price. (For prosumers under net-metering, only the net consumption is charged, using the operator’s hourly net usage data and load profile.)

Latvia has had smart metering widely deployed, so end users can indeed respond to hourly prices. Under EU law (Electricity Directive 2019/944), all suppliers must offer at least one dynamic pricing option by 2025. Nord Pool notes that “Starting in 2025, European legislation mandates that major electricity suppliers must provide dynamic electricity tariffs”. In the Nordics this is already common practice; Nord Pool reports that Nordic consumers now mainly buy power at floating spot prices. In Latvia, while dynamic tariffs are not mandatory beyond the EU rules, SPRK requires that all retail offers be transparent and subject to consumer protection rules (suppliers may not change a contract more frequently than allowed and must give notice of price changes). In practice suppliers often allow tariff switching by the 15th of each month for an effective date at the start of the next month.

Major Suppliers with Dynamic Tariffs

Several of Latvia’s leading electricity retailers offer dynamic (Nord Pool‑indexed) household tariffs. These include:

• Enefit SIA (Enerģija) – An Estonian-owned utility. Offers “Dinamiskais Standarta” (regular) and “Dinamiskais Zaļais” (100% renewable) products. Both have a low fixed monthly fee (currently €1.65 per month, excl. VAT), and pass the Nord Pool spot price on each kWh. The Zaļais variant comes with guarantees of origin for renewable energy.
• Latvenergo AS (Elektrum) – The incumbent group (state-owned), selling via its Elektrum retail brand. Its “Elektrum Dinamiskais” tariff charges energy at Nord Pool prices and applies a modest fixed fee that depends on consumption tier. For example, the fee is €2.07 (excl. VAT) for usage up to 49 kWh/month, €1.49 for 50–149 kWh, and €0.83 for 150–399 kWh. (Above certain volumes the fixed fee may be even lower.)
• Tet SIA (Enerģija) – A large telecom‐backed supplier. The “Tet Dinamiskais” contract simply bills at the hourly Nord Pool rate. Its published example shows electricity priced at exactly 0.09187 €/kWh (Nord Pool spot). (Tet also offers fixed-rate plans separately.)
• Alexela SIA – An oil and energy group from Estonia. Offers a “Biržas cenas piedāvājums” (“Exchange price offer”) which charges the Nord Pool spot price per kWh (no markup). Alexela’s site also lists various fixed-price products, but its spot offer targets those wanting full pass-through.
• Virši Renergy SIA – A domestic supplier (spun off from fuel retailer Virši) which offers “Virši Dinamiskā elektrība.” This plan has a fixed monthly fee of €1.64 (excl. VAT) and then charges a dynamic energy price tied to Nord Pool.
• MVBK SIA (elementary) – A smaller trader. It offers “elementary Dinamiskais tarifs”, which passes through the Nord Pool spot price per kWh (in the price comparison it shows ~0.09187 €/kWh).

Each of these suppliers integrates the Nord Pool hourly price into billing (often as a monthly weighted average). As a result, customers on these plans see their energy costs rise and fall with the Baltic spot market. Most suppliers also emphasize flexibility: for example, customers can usually switch to a dynamic plan from a fixed one on short notice (as per the 15th-of-month rule).

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.