Implementation of the energy efficiency directive and the impact on district heating regulation

Discussions in Latvia are ongoing regarding the optimum solution to implementing Directive 2012/27/EU on energy efficiency. This study analyses a scenario where a significant fraction of target energy efficiency is achieved by obliging energy utilities to implement user-end energy efficiency measures. Investment related costs are likely to be included in the energy prices and service tariffs therefore gains for the users are under question. The authors analyze ways to achieve a balance between user gains from energy end-use savings and increased energy prices and tariffs as a result of obligations imposed upon energy utilities including the energy supply sectors where supply tariffs are regulated. Authors also have assessed the disadvantages of the current Latvian district heating regulation and have marked the next steps for a transition from hard regulation towards the approximation of benchmarking and market principles.