Speech by Nils Freivalds

Baltic Sea Parliamentary Conference. Sustainable Development in theBaltic Sea Region: Social Welfare, Maritime Policy, Energy Security.Nils Freivalds, Deputy Director of the Energy Department, Ministry ofEconomics, LatviaExcellencies, ministers, distinguished guests, ladies and gentleman.It is a great honor for me to address you at the Baltic SeaParliamentary Conference here in Berlin.My particular task and the statement is to inform you about theBaltic Sea Region Energy Cooperation, Latvia currently is holding thepresidency of. However I would like to briefly outline several importantissues the Baltic Sea Region and, particularly, the three Baltic Countries –Estonia, Lithuania and Latvia are encountering.In the year 2009 the Baltic States could face a problem of energyshortage because of closing down the Ingalina Nuclear Power Plant inLithuania and as you know Baltic States electricity system is separatedfrom EU, but very well integrated with Russia. There are two strategies toaddress the problem: a long term and a short term. The long term solutionis construction of a new nuclear power plant, which is expected to startoperation in 2015 or beyond.The short term solution is to address the shortage of energy supplyduring 2010-2015. As regards Latvia, the work group chaired by theMinister of Economics has elaborated proposals of provision of energybase loads in Latvia during the next 10 years. The proposal is to build anew power plant in Latvia run by coal co-fired with biomass.For all three Baltic States one of objectives of the energy policy is toensure the security of energy supply. In this regard it is important tointegrate the Baltic energy market in the EU network thus reducingdependency of energy and raw material supplies only from one supplier.It is very pleasant to mention that the Estlink project linking a powercable between Tallinn and Helsinki is under operation, and is the firstsuch project that interconnects the electric grid between the Northern andEastern shores of the Baltic Sea. We are sure that similar projects have tobe encouraged, for example a proposed GotLink project, connectingSweden and Latvia and SwedLit project, connecting electric grid betweenSweden and Lithuania.In the area of natural gas supply, there is one big energy supplier inthe region – Russia – and many consuming European countries. We areall aware of the North European Gas Pipeline (“NordStream”) projectplacing a new pipeline along the basin of the Baltic Sea. However, given1the consideration of system security and supply and price stability, such aproject would stand a lot to gain from increasing the connections to morecountries en route, regardless of the actual path of the pipeline. In case ofLatvia, the increased security in the diversification of the supply routewould benefit from the geological formations found in our country. Thesegeological formations have been identified with total storage capacity ofup to 50 to 70 billion m3. Thus, any new gas pipeline system betweenRussia and Europe would benefit by having a connection to the Balticcountries, where the naturally occurring underground storage capacitiesin Latvia could help to safeguard a steady supply of gas to Europe.As I mentioned before, the Baltic States and especially Latvia willface a challenge until 2015 how to meet requirements of needed baseloads for energy. In this context it is of great importance to fosterintroduction of renewable energy and further promote energy efficiency.Therefore, we must be open to innovative solutions in energyefficiency, which could substantially improve quality of our life. TheMinistry of Economics of Latvia has always supported energy efficiencyactivities both at the producer and consumer side. The Latviangovernment has allocated the EU structural funds to address energyefficiency issues for district heating and energy efficiency for public andresidential buildings. While acknowledging positive impact of theStructural Funds during previous and the current programming period, Ishould say that funds provided to support energy efficiency projects arenot yet enough, and we should try our best to attract more resources forthis highly demanding area.Returning to the subject of my statement on the Baltic Sea Region EnergyCooperation I would, firstly, like to elaborate on what really the BalticSea Region Energy Co-operation is –it is an intergovernmental forum for sharing information, capacitybuilding and co-operation on specific projects. Its objectives are topromote a sustainable development and an effective and secure energysystem to the benefit of all participants and actors in the region. BASRECmembers include Denmark, Estonia, Finland, Germany, Iceland, Latvia,Lithuania, Norway, Poland, Russia and Sweden, as well as the EuropeanCommission.Concluding my Statement I would like to briefly indicate on the LatvianPresidency priorities or tasks with in the Baltic Sea Region EnergyCooperation:1. Multi country workshop on best practices in transposing (EnergyEfficiency) Directive 2006/32/EC.2. BASREC conference on Infrastructure projects in the BSR (NordStream gas pipeline, New Ignalina NPP project).23. Seminar on Renewable Energy Sources in the Baltic Sea Region andEU regulation (Presentations on RES regulation in member countries ofthe Baltic Sea Region)4. Seminar on Latest developments on RES regulation, legislation at EUand national levels. This particular seminar is related to bindingobjectives of renewable resources targets to be set by the EuropeanCommission for individual member states.As an important cooperation we see a long term relation betweenBASREC and Baltic Gas (the union of gas companies around the BalticSea) and BALTREL (the union of power companies around the BalticSea). Therefore I would like to ask your support to promote BASREC asan important tool and forum where to discuss and promote energy issues.In conclusion of my address, I would like to express my sincereappreciation for invitation to this outstanding and valuable Conferenceand, Ladies and gentlemen, thank you for your attention!3