The heating season is just around the corner, and residents of Riga will again pay more for heat. Politicians, who face Saeima elections next year, have suddenly rushed to try to reduce heat tariffs in Riga, but this little populist blanket is more likely to tear than to reach its goal – all because short-term solutions have been made a priority for their own aims and interests, instead of addressing the root of the growing problem. However banal and almost universally applicable across sectors it may sound, at the heart of the problem lies disordered regulation and a lack of consistency.
“Thanks to the involvement of the Ministry of Economics, the increase in the heat energy tariff in Riga has shrunk by 70%,” the ministry announced with this bold statement at the end of August this year. The increase has shrunk, but the tariff has still gone up. What the tariff actually is, however, is quite a debatable question, because it can change every month. The Public Utilities Commission (SPRK) approves the maximum possible tariff for heat production – producers are not allowed to sell it at a higher price, but they are allowed to sell it cheaper, and not all market participants are required to have their tariff approved. Moreover, the tariff approved by SPRK is not the same as the heat energy price that end users see on their bills.
In recent weeks, quite a bit of attention has also been drawn to the fact that the heat energy tariff in Riga is the highest among the capitals of the Baltic states, while in Vilnius heat is supposed to be very cheap – there the regulator has set a tariff of 54.2 euros per MWh. To be fair, it must be noted that this applies only to one month – October. What the tariff will be after that is not yet known, but it is known that in the winter of 2024/2025 (the heating season) the tariff in Vilnius was higher than in Riga. In Vilnius, for example, the tariff for the entire season was above 80 euros per MWh, reaching as much as 82.4 euros in January, while in Riga it was 74.17 euros per MWh. All this is because Vilnius has a different heating system and mainly uses wood chips and waste for fuel, while Riga uses gas. Whether in the end the tariff in Riga will be higher than in Vilnius, we will see over time, but for now let us look at how we ended up with a system that hardly anyone understands, yet when expressing opinions about it, everyone is at least partially right.
Originally published at https://inc-baltics.com/siltumaloks/
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