Over the first six months of 2020, the State Construction Control Bureau (SCCB) has taken 10 decisions to revoke the right of electricity producers selling electricity within the framework of mandatory procurement. As a result of the decisions taken by the SCCB, the State has managed to save approximately EUR 1.22 million this year alone, but within the framework of the entire planned period of aid for electricity producers this amount is EUR 14.63 million.
In seven cases permits have been withdrawn due to violations committed by power plants, while owners of three more power plants have renounced the State aid themselves.
Jānis Vitenbergs, Minister for Economics, emphasises, “Priority measures of the Ministry of Economics (MoE) include revocation of the MPC, so that starting from 2021, the costs of the State aid for electricity are only covered by the State budget, thus removing the relevant burden from bills of residents and entrepreneurs. We are waiting for the Saeima to take a decision on the proposals submitted previously for the Electricity Market Law regarding revocation of the MPC. At the same time we should continue working actively on the system for monitoring and control of the existing MPC plants. Since January this year when the function of monitoring MPC plants was handed over to the SCCB, more stringent requirements have been legally imposed on beneficiaries. Currently the MoE is working on additional requirements to regulations in order to improve and enhance supervisory framework of the MPC plants. It is, however, obvious already that the requirements introduced and the active work of the SCCB have resulted in the situation where merchants acting in bad faith renounce the aid themselves which in turn saves the State budget.”
“Recently we have taken important steps to strengthen monitoring and ensure that the State aid is only received by companies operating in good faith. After having assessed annual reports of power plants the SCCB has identified the following trend: starting from June 2019 when companies became obliged to submit a principal scheme of electrical connection of a power plant, CHP plants have demonstrated a rapid increase in self-consumption of electricity. This encourages us to take a critical look at the previous operation of these companies within the context of future decisions of the Bureau,” admits Svetlana Mjakuškina, Director of the Bureau. She also indicates that the SCCB will continue carrying out in-depth inspections of the plants paying special attention to self-consumption and use of useful thermal energy, therefore companies are invited to get their things in order.
This year, the SCCB has carried out on-site inspections in 20 power plants establishing 24 different breaches, including deficiencies in accounting systems of five power plants, such as the failure to install measuring instruments. Nine power plants in turn fail to correspond to the requirements for the field of energy (for example, due to discrepancies in electrical connections). Seven more breaches are related to the failure to comply with labour safety rules, and in three plants discrepancies have been discovered with regard to the electrical capacity specified in a contract with a public trader.
During this period, the Bureau has also considered annual reports submitted by 143 power plants for 2019 and issued 15 warning, including 10 warnings regarding the failure to submit the report and 5 warnings regarding the failure to ensure energy consumption for the needs of a power plant or self-consumption.
The Bureau has also controlled whether 275 companies have incurred tax debts, as a result of which 27 companies have received a warning regarding the need to settle their debt obligations to the State. During the first half of the year, the SCCB has also ensured collection of the duty on monitoring use of the State aid granted to electricity producers in the amount of EUR 288 thousand.
Overall, the SCCB monitors 328 power plants, out of which 135 are hydroelectric plants, 51 are wind power plants, 42 plants produce energy from biomass, 50 – from biogas and 50 – from natural gas. This year the State aid will expire for eight power plants.
Starting from 1 January 2020, the SCCB has been responsible for the monitoring and control of electricity producers which have been granted the right to sell electricity produced by a power plant within the framework of mandatory procurement or the right to receive guaranteed payments for electrical capacity installed in a power plant.
Information prepared by:
Jūlija Eizenberga, Public Relations Specialist, State Control Construction Bureau
E-mail: Julija.Eizenberga@bvkb.gov.lv, telephone: 67013327, 29482328