Winergy wind farm developer threatens legal action against Latvia over plan to scrap MPC

Winergy board chairman Igor Rozanov has sent Saeima and all parliamentary groups a letter warning that left without government support and private capital, without a sustainable energy strategy and policy, the renewable energy industry is under threat in Latvia.

According to the letter, the initiatives of Latvian lawmakers and government aimed at phasing out mandatory procurement component (MPC) in electricity tariffs, which were proposed during election campaigns, and to end state support to renewable energy producers are unacceptable to foreign investors.

The author of the letter also says that the lack of a national energy strategy, the current destructive position and plans that are aimed against producers generating energy from renewable sources, suggest that in the future Latvia might have difficulties meeting the EU’s targets as the renewable energy industry is being weakened amid ongoing political battles and changing rules, which affect both production and the size of government support.

According to the chairman of the Winergy board, Latvia’s political environment has constantly been demonstrating a populistic, reckless and short-sighted approach with no regard for long-term consequences.

As an EU member state, Latvia is obliged to comply with the EU’s laws regulating energy policies and take into consideration the legislation that will be adopted in the future.

Winergy also warns that it is prepared to take all the necessary measures to defend its interests which are protected under international agreements and laws, if Latvia continues its fight against a “nonexistent enemy – the renewable energy industry”.

Winergy is ready to take Latvia to an international court of arbitration over investor protection violations and to demand compensations for the losses the investors might suffer if the government restricted support to the renewable energy producers. The amount of such claims would exceed EUR 1 bn, Winergy warned.

As reported, the declaration of the Krisjanis Karins-led government includes a commitment to phasing out the MPC system in a legally acceptable and financially feasible way. The government has also committed to assessing the lawfulness of the system’s creation.

At the beginning of January, Saeima passed a resolution calling on the Economics Ministry to provide the legislation necessary to abolish the MPC already by March 31, 2019.

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