Latvia will likely delay a planned reform of its renewable energy subsidy scheme, as Prime Minister Krisjanis Karins has advised the parliament to wait with the reform because of legal concerns.
Speaking to reporters after Tuesday's cabinet meeting, the prime minister said he recommended against passing the legislation that would do away with the so-called mandatory procurement component, a special charge included in electricity bills to subsidize renewable energy producers.
The parliament had planned to ditch the much-criticized subsidy scheme by March 31, as the inclusion of the "green energy" component in electricity bills has caused great discontent among energy consumers.
The Economics Ministry warned on Tuesday that an abrupt discontinuation of the renewable energy subsidy scheme might lead to legal disputes, including investment protection lawsuits and complaints to the constitutional court. "The risks of legal action can be significantly reduced by providing compensatory mechanisms and prolonging the transition period," the ministry said.
Economics Minister Ralfs Nemiro has now been given two months to work out proposals on how to best phase out the mandatory procurement component system.
Karins said that notwithstanding the delay, the mandatory procurement component will eventually disappear from electricity bills. However, the prime minister did not set a new deadline for the reform.
Editor:Cherie
