He thinks that although the existing capacities may seem sufficient from a mechanical security standpoint, the amount of base capacities is still quite limited. “The Riga thermal power stations have a total of only four generating units, any of which could fail or require maintenance at any time. In such cases, it would be beneficial if Latvia or another Baltic country had alternative controllable capacities available”, he adds. In recent years, the term energy crisis has frequently appeared in public discussions. Can we now say that this crisis is over? I wouldn’t describe it as a crisis in the traditional sense because I think we were all simply facing a fear of the unknown. Energy users, politicians and the institutions responsible for the energy sector were all deeply concerned. Up to 2022, a significant share of the European Union’s (EU) energy resources came from Russia. When the war in Ukraine began, it became clear that restricting energy exports would create not only financial strains but also supply challenges. We had to quickly find alternatives and adapt to a new reality. Now, we can say that we have successfully navigated this challenging period, but it was not a typical energy crisis. At no point did we experience an actual resource shortage that threatened basic survival. Instead, the main challenge was the sharp rise in energy prices and its impact on economies and consumers. The abandonment of Russian gas led to significant transformations in the Baltic energy market. How did the Baltics cope with this situation? I believe we have successfully adapted to the new conditions. It has been about ten years since Latvia began purchasing gas via the Lithuanian liquefied natural gas (LNG) terminal. That made the transition away from Russian gas a bit easier, as gas consumers and traders were already familiar with alternative supply methods. In recent years, the circulation path of natural gas has become completely clear. Market participants know where LNG can be obtained and are familiar with the ordering and procurement procedures for this resource. Latvia's greatest advantage is the Inčukalns underground gas storage, where the gas can be stored all year round. This storage provides us with significant advantages compared to other countries that do not have such large storage facilities capable of meeting annual gas consumption needs. I can confidently say that we do not currently feel a shortage of natural gas, as the resource is available to us in the necessary quantity and quality. To be honest, I think natural gas suppliers would only be happy if we consumed more gas. What are your forecasts regarding natural gas consumption in the Baltics? Natural gas consumption in Latvia will certainly not decrease in the next five or ten years. To ensure a secure and reliable supply of electricity in the Baltic region, it is essential to utilize Riga's thermal power plants, which operate on natural gas. Under the current circumstances, we cannot function without them. As such, we cannot operate without natural gas. If we talk about Estonia, it should be noted that the gas consumption there is already very low, but if a new gas thermal power plant is built in Estonia, consumption could naturally increase. It is difficult to assess the situation in Lithuania. For example, the company “Achema”, which historically has been one of the largest natural gas consumers in the Baltics, has not been operating at full capacity for several years. If “Achema” returned to full capacity, it could consume a very large amount of gas and increase the total consumption. In any case, no matter how much solar and wind power we have, there will be moments when we will need to use gas for electricity production. When it comes to energy security, how do you assess the current situation in the Baltic region? Given the recurring damage to various electricity and gas lines in the Baltic Sea, can we truly consider ourselves safe? Ensuring a country’s energy supply is a highly complex, multi-layered, and challenging task. We all follow the information in the media and see that the politically responsible officials claim that everything is in perfect order. At the same time, energy market participants and experts are aware that this is only the tip of the iceberg. Energy sector security is influenced by multiple factors. Last year, due to technical failures, the Estonia-Finland connection was out of operation for more than six months, limiting access to low-cost electricity from Finland. Now, we are facing a similar situation once again, although this time it is not the result of a technical failure, but rather a deliberate and malicious act. A malfunction of this cable means a significant loss of power for the Baltic market amounting to 650 megawatts. Of course, the Baltic region has sufficient electricity generation capacity, allowing us to maintain operations and ensure that consumers receive the necessary amount of electricity. At the same time, I would say that the Baltic region needs to develop additional base capacities to strengthen its energy security. Although the existing capacities may seem sufficient, the amount is still quite limited from a mechanical security standpoint. The Riga thermal power plants have a total of only four generating units, any of which could fail or require maintenance at any time. In such cases, it would be beneficial if Latvia or another Baltic country had alternative capacities available. These capacities must be controllable, ensuring the ability to switch them on and off as needed. Exactly what solution do you think would be the best in this case? A couple of years ago, you mentioned the construction of a nuclear power plant as one of the options – is that still relevant? I know that in Estonia, based on private initiative, a public limited company called “Fermi Energia” has been established, which is attempting to develop a modular reactor nuclear power plant project in Estonia. The Estonians plan to involve multiple participants in this project, and public information suggests that “Latvenergo” has also shown interest in it. The total costs are estimated at nearly one billion euros, making it clear that significant investment is needed to develop this project. The construction of a small-scale nuclear power plant would be a good solution for the Baltic region, but unfortunately, progress on this matter has been very slow. I believe the fastest way to create new base generation capacities for the Baltics would be by building gas power plants. The Chairman of the Board of “Augstsprieguma tīkls” has said that in Estonia and Lithuania we already have stations that can be used if necessary. Isn't that enough? As a modern society, we should be using efficient equipment. The efficiency of Lithuania’s Soviet-era turbines is very poor. If we generate electricity using old equipment, approximately two-thirds of natural gas is simply wasted into the atmosphere. It is clear that we will need electricity in the future too so we must find a long-term solution. You already mentioned that the Riga thermal power plants play a significant role in ensuring Baltic energy security. Historically there have been many negative comments about the fact that these stations use gas for electricity generation. However, in the current situation, everyone is quite happy that we have them. Exactly! I would like to know where these people are who criticized the modernization of the Riga Thermal Power Plant-2 15 years ago and argued that gas stations should be shut down because they would not be needed in the future. In February, when the Baltic States synchronized with the European grids, it was the thermal power plants that ensured the stability of the grid. Without them, we would not have been able to manage, and we will not be able to do so in the future either. How do you assess the desynchronization process? The process itself was successful, but we still have a great deal of homework to do. One of the main tasks is the installation of synchronous compensators. In addition to that, we also need to finalize the installation of the Battery Energy Storage Systems in Tume and Rezekne. All these things will help maintain a stable grid operation and frequency. Lithuania has completed these tasks earlier than Latvia, but we are working to catch up. There is still much to be done in 2025. How will desynchronization affect electricity prices in the Baltic States? We should not expect investments worth millions to come at no cost. We will have to pay for this equipment, even though part of the costs will be covered by EU funding. Additionally, we will need to pay for the operation and processes that the equipment ensures, such as frequency stabilization services. Moreover, it is known that at the beginning of this year, Latvia and the Baltics started actively participating in the balancing market. All of this will not reduce electricity prices. Energy independence, within which we must ensure a full energy supply security package, certainly comes with a price. It's not for free. What is the situation regarding resource availability in the Baltic States? Resource availability is reflected in prices. At the beginning of the war in Ukraine, for example, the price of natural gas went up to 200 EUR per megawatt-hour (EUR/MWh). Currently, it stands at 50 EUR/MWh, and last spring, it was under 30 EUR/MWh. Therefore, it can be said that the situation is much better now than it was three years ago. I believe that this spring, we should not expect any surprises. Only time will tell what happens later. The market will certainly also be influenced by ongoing processes in the United States, where a significant portion of the LNG that reaches Europe is sourced. In any case, I hope that in the future we will rely solely on gas suppliers that are safe and do not use the funds obtained from gas to finance military operations. How do you evaluate the development of the renewable energy market in the Baltics? The overall situation in the Baltics is excellent. Of course, not all investment projects are progressing as quickly as investors had hoped, but overall the situation is good. When it comes to Latvia, it's true that we are slightly behind our neighbours in terms of installing new renewable energy capacities, but positive trends are emerging in Latvia as well. What are your predictions for the future of the Baltic energy market – could we become exporters of renewable energy? To make the most efficient use of renewable energy, Europe needs to develop so-called transcontinental networks – high-voltage grids with large capacities that would enable the transport of energy not just over a thousand kilometres but much further. In the Baltics, we can build numerous renewable energy stations, but we might face a situation where there will be nowhere to export this electricity. One connection to Poland is simply not enough. With regard to the resources, I think the Baltics will still mainly use the same resources in ten years – gas power plants as a base and renewable energy stations as an addition. In the future, I believe we will see more renewable energy stations competing for space to generate energy as efficiently and cost-effectively as possible.