Abstract
Electricity is crucial to the development, progress, security and overall lifestyle in the global economy. A common European electricity market requires market integration and transmission grid expansion, including cross-border interconnectors. The electricity market opening in Latvia was divided into four stages; it began with legal persons in 2007 and ended with household users on 1 January 2015. The aim of the research is to assess the development of the Latvian electricity market since the beginning of the electricity market liberalisation.Research methods used: monographic, descriptive, analysis, synthesis, induction, deduction and regression analysis. The Diamond Model was employed to acquire information for market analysis.The electricity market’s development was affected by its liberalisation. With the interconnections still being developed, the Latvian electricity market is slowly fitting into the Scandinavian market and decreasing its supply dependence on third countries. Now the electricity market is developing naturally; yet, it requires stricter monitoring of its development and stimulation.
Highlights
Latvia began the opening of its electricity market on 1 July 2007 when, in accordance with Directive 2003/54/EC of the European Parliament and of Council of 26 June 2003 concerning common rules for the internal market in electricity, a legal provision on the electricity market came into force, stipulating that all electricity final consumers, which have a connection to the power grid, have the right to change their electricity supplier without any limits (Report on Control Results ..., 2013)
Journal of Social Sciences No 1(8) 5 the opening of the electricity market was completed in Latvia, namely, all household consumers – approximately 850 000 in number – accounting for about 25% of the total electricity consumption were engaged in the electricity market (Electricity Market Opening..., 2014)
Since the electricity market was opened in Latvia, positive trends have been observed in this market: power interconnections are developed, electricity may be bought in the exchange and competition increased; yet, the electricity price for the segment of households is declining very gradually, as such clients are passive
Summary
Latvia began the opening of its electricity market on 1 July 2007 when, in accordance with Directive 2003/54/EC of the European Parliament and of Council of 26 June 2003 concerning common rules for the internal market in electricity, a legal provision on the electricity market came into force, stipulating that all electricity final consumers, which have a connection to the power grid, have the right to change their electricity supplier without any limits (Report on Control Results ..., 2013). The authors analysed electricity trader offers for households when the market was opened (i.e. on 1 January 2015) and at present, grouping the households by their approximate electricity consumption (within a range from 100 to 1000 kWh/month) and comparing their annual electricity consumption costs. In the first trader offers, the greatest cost increase was reported for households with an average consumption of 100 kWh a month; yet, as their consumption increases, the cost difference decreases This may be explained by the fact that before the consumer groups paid the regulated basic tariff, which better fitted the market situation. It has to be noted that the significance level of “contingency events” equals 10.2, which means that there are events in the industry that cannot be controlled by the enterprises but their effects are very significant
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