The main messages from the forum were based on how energy efficiency is key to solving many social and economic problems and what measures can be taken to use efficiency to its full potential.

• There are some big gains to be made in Latvia, especially in the housing sector, however there is a huge problem of trust in efficiency measures, often due to negative publicity. More local awareness schemes and better incentives and opportunities for consumers and the private sector could help improve this. Trust can be generated also through using well-known household brands and use of quality marks to launch new products.
• Cooperative schemes and association schemes are seen as positive, although there is also a need to attract private investors too in order for the schemes to be successful, this is done through state guarantees.
• Apartment owners are wary of carrying out renovation and decisions often have to be taken by the whole building which slows things down. Therefore issues of the surrounding framework need to be addresses such as ownership structures, building codes, property law and planning requirements.
• Sharing ideas and experiences at European level as well as establishing incentives can push forward energy efficiency measures and this together then with social measures.
• More efficiency measures that are taken, the more and better technology will be deployed and bring down prices and save energy.
• Addressing energy efficiency can clearly help fuel poverty.
• In Latvia the 2012 EU energy efficiency directive needs to be implemented.

The forum gathered a mixture of Latvian experts, from NGOs, businesses and politicians alongside experts from the region and from European level. The discussions were based on looking at the current situation of energy efficiency in Europe and why energy can help social and economic problems, measures and tools for improving efficiency and future steps to be taken. The full programme can be found at the end of this document.

The opening of the event was given by Ervins Labanovskis, Head of the Board of the Freedom and Solidarity Foundation (FSF) he pointed out that energy efficiency can be the key to solving many of today’s problems. It can improve the social situation of the poor because it reduces the costs for heat, it can strengthen the country’s economic security because it reduces dependency on external energy suppliers and it can reduce threats to democracy caused by instability in the markets of energy resources and the rise in prices.

The moderator of the event Reinis Aboltins, energy policy researcher at PROVIDUS added to Ervins Labanovskis opening speech, indicating that energy efficiency is closely related to democracy. A situation where a country has a huge social inequality and high payments for energy resources can cause difficulties for many to pay for heat, electricity and other energy sources. This poses a serious danger because energy resources are the basic necessity of today.

Discussions at the forum were held in three sections; The first section looked at the current energy efficiency situations in Latvia and the EU. It reviewed current legislative issues with a particular emphasis on aspects related to the EU’s common policy. Thus an important role in the discussion was devoted to the EU’s Energy Efficiency Directive that was adopted in 2012 and is still awaiting to be implemented in Latvia. Also the discussion of the first section addressed the issue of how energy efficiency can contribute to solving social and economic problems.

Charlotte Billingham, FEPS, presented the issue of energy poverty and how it is a problem spread across Europe. It can be seen as a modern social disaster in our societies. Eastern Europe and Baltic states are affected the most[1]. However data is difficult to find on this but possibly up to 20% of people in Europe, are affected at some point by fuel poverty. Many households struggle to pay their energy bills. In Great Britain, households that spend more than 10% of their income on energy resources are considered to be energy-poor. Energy poverty causes other social problems – people are left with less money for food, health care, culture and education. That way, if the problem is not being solved, social risks increase.

In order to eliminate this problem, short-term solutions will not work. It is necessary to support long-term solutions in all European countries. Some of the suggestions included:

• Guarantee a minimum supply and avoid being cut off, or delay it.
• Social tariffs, suggestions include, an annual minimum of 500 kilowatt hours per person
• An ‘energy consumer’s charter could set down legislation very clearly

Andris Akermanis, energy expert of the Latvian Association of Local and Regional Governments, illustrated in the discussion that the main aim and task of local governments is to achieve that overall well-being of resident increases. Energy efficiency is one of the ways how to achieve it. Nevertheless, it is important to understand how to do it correctly. A situation where, as a result of energy efficiency measures, households expenses increase, should not happen. He also pointed out that the EU Energy Efficiency Directive came into force already a year ago, however in Latvia it still has not been introduced. The results of the directive have to be reached by 2020. Akermanis pointed out that many local governments have succeeded in convincing residents that building renovations are beneficial both for them and the country. Processes move forward quickly there and buildings are being renovated. But in order for this to happen in all local governments, more financial resources are needed, because the State and the EU support programs can cover only 1/10 of the necessary resources.

Gints Turlajs, Economist, on the other hand noted that according to his thoughts, one of the main problems that delay renovation of apartment-buildings in Latvia is decision making processes among apartment owners. Legislation changes are necessary in this sphere in order to simplify and facilitate this process. Besides, there should be defined clarity who is responsible for implementation of energy efficiency measures – apartment owners, building owners or their tenants. Research in Lithuania concluded the need for a third party to provide upfront finance that can then show return from utility bills. This idea works well as inhabitants don’t have to invest enormous personal finance in the renovation. They continue to pay what they pay now but their quality of life will improve.

 Egils Baldzens, Deputy Chairman of the Free Trade Union Confederation of Latvia, highlighted that expenses for energy resources for many households in Latvia are 40% or even 50% of their income. Mainly due to low salaries. Moreover, during the crisis, the State significantly increased taxes for energy resources, including electricity. After overcoming the crisis, taxes have remained as high. VAT on electricity was 5%, now its 21% which is a significant difference for consumers. State company „Latvenergo” pays almost all of its profit to the State’s budget thus becoming sort of a budget ‘supporter’ of the State. As a result, we are paying more for electricity than Estonia or Scandinavia although we are in the same market.

Veiko Spolitis, Member of Parliament, expressed his opinion that more active ESCO (Energy Service Companies) participation in Latvian energy efficiency market could be the best solution for attracting additional funding for building renovations and would make the whole renovation process larger-scale.

During the forum’s second section more concrete activities and instruments for improving energy efficiency were discussed.

Erica Hope, European Climate Foundation, presented the progress, political status and outlook for European policy on energy efficiency and what the measures and tools available. Some examples of successful policies and support mechanisms were also demonstrated.

The recent EU Council resolution passed in October 2014 that energy consumption of non-renewable resources must be reduced by 27% in the EU member states by 2030. This caused disappointment for many who work with these questions. Many experts have pointed out that the EU’s potential is much higher, up to 40%. Although the aim could have been more ambitious, a minimum portion will definitely be.

The main EU energy efficiency document that sets out how and what targets need to be achieved is the EU Energy Efficiency Directive 2012/27/EU, adopted in 2012. The Directive sets the obligation to European Service Companies (ESCOs) to reduce the overall energy consumption of consumers, as well as to improve energy efficiency in buildings owned by the State and local governments. Countries have to report annually on their progress and implementation of the Directive. The EU has also other tools and guidelines for promoting energy efficiency. Such as directives on CO2 emissions standards for cars and vans or the ecodesign and energy-labelling directive  which amongst other things prohibits TVs, fridges, vacuum cleaners and other products to be sold in the EU market that consume a disproportionately excessive amount of energy.

Hope gave the examples of KfW in Germany, ‘Better Energy Warmer Homes’ in Ireland, Estonia’s Kredex programme as successful examples and compared it with the Jessica programme in Lithuania which didn’t work as well. Minimising administrative costs and become self-sustaining through the use of a revolving fund like in the case of Kredex are examples of concrete measures presented to help ensure schemes are successful.

 The EU’s challenge at the moment is to create an energy efficiency scheme that would provide larger-scale buildings’ renovation. It is a difficult challenge because it requires solving a variety of administrative obstacles and to unite all the parties involved in the process.

Mara Laizane pointed out in the discussion that the apartment building owners in Latvia do not see the entire house as their property. Consequently, they do not feel responsible for this property and do not want to take responsibility for building renovation. However the situation changes and improves significantly in cases where renovation has been done. Also, due to negative media reports, people do not feel confident that materials used for the renovation are good enough quality and that builders are professional enough, thus they are afraid to invest major financial investments in energy efficiency. It is extremely important for the local governments to provide support and set an example. This encourages owners of apartments to become more active.

In turn, Kaspars Zvaigznitis marked that building renovations should be a priority across Europe, taking Latvia as an example, 70% of the population live in non-renovated apartment buildings. Additionally it is important that building renovations are done fully, including façade, engineering works, basements, and other essential elements.

As commented by Ansis Dobelis, the Head of the NGO “PROGRESIVIE”, building insulation and renovation in Latvia is hindered by a variety of administrative barriers and mistrust between residents, including distrust in companies that offer their services for improvement of the energy efficiency in buildings. Trust could be encouraged by a clear State policy that through systematic communication and information campaigns would let people know about the benefits of energy efficiency measures and ways AND how these measures can be implemented. As for elimination of administrative obstacles, including the facilitation of decision-making process for implementation of apartment buildings’ energy efficiency measures, it requires political will and legislative changes.

In the third section of the forum, politicians, representatives from public administration, and experts discussed the next steps for energy efficiency promotion.

During the discussion various ideas and solutions were expressed. However, a number of directions and challenges on which Latvia in the short-term future should work on, also were marked. One of the main tasks includes implementation of the EU Energy Efficiency Directive 2012/27/EU in Latvia. At present, two laws are currently in process that are necessary both to implement the Directive and to achieve other objectives – amendments to the Law on the Energy Performance of Buildings and development of Energy Efficiency Law.

As pointed out in the discussion by its participants, it is essential that building renovations in Latvia achieve a sort of an avalanche effect; therefore it is necessary that the best building renovation examples could be multiplied. This requires drafting of standard projects, support institutions of the State, a wide-range explanatory and trust-building communication both from the State and local governments, and facilitated decision-making for starting renovations in apartment buildings.

In conclusion, it was noted that it requires a long-term policy and strategy from the State in this area. This would give confidence also to private financial institutions that this is an industry where it is safe to invest resources. Whereas, larger apartment buildings’ renovation in Latvia would attract investments from manufacturers of building materials, which would create new jobs and reduce the costs for energy efficiency activities in Latvia.

The Conference was streamed online to one of the biggest Latvian news portal Tvnet.lv and was viewed by 489 people. Video of the conference can be found at the foundation’s BSF home page http://bsf-latvija.lv/notikumi/video-energoefektivitate-atslega-uz-socialo-un-ekonomisko-drosibu/

Based on this and previous conferences on energy efficiency, BSF created proposals for the  Latvian Parliament to change legislation and policies in order to ensure better energy efficiency measures.

http://bsf-latvija.lv/wp-content/uploads/2014/12/Priekslikumi_lemumu_pienemejiem.pdf

Also an e- book was created collecting practices and examples of energy policy on this issue in Finland, Estonia, and Latvia (available also in English) http://bsf-latvija.lv/wp-content/uploads/2014/12/EnergyEfficiency.pdf

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[1] Data from Fuelpoverty.eu