On 19 December 2023, at a meeting of the Cabinet of Ministers, new regulations entitled “Regulations on Permits for the Introduction of New Electricity Production Equipment or the Increase of Electricity Production Capacity” (the Regulations) were adopted, which were issued on the basis of the second part of Article 22 of the Law on the Electricity Market, and replace the regulation that was previously prescribed in the Cabinet Regulations No. 559 of 2 September 2020 (which expired on 11 August 2022).

According to the Regulations, to introduce new electricity production equipment with a capacity of 500 kilowatts or more, or to increase or renew the capacity of existing equipment, it will be necessary to obtain a permit, which will be issued by the State Construction Control Bureau (the Bureau).

In order to receive a permit, the project developer will need to register in the Land Register the construction rights to the property on which the construction is planned (except if the construction of the power station is planned on land which is owned by the developer), and submit an application to the Bureau, appending a plan for the location of the electricity production equipment on the property and its technical indicators, as well as a document certifying payment of a security deposit amounting to EUR 200 for each megawat (MW) provided for in the permit. If, according to the law “On Environmental Impact Assessment”, an initial assessment or an environmental impact assessment must be performed before the construction, technical regulations or an acceptance decision issued by the State Environmental Service must be obtained before submitting the application. The Bureau can refuse to issue a permit if it finds that the ratio of the capacity of the solar electricity production equipment to the area of the property indicated in the application is technically unfeasible (it is estimated that an area of at least 0.5 ha is required for the implementation of 1 MW capacity), or that on the day of submitting the application the applicant has a debt of taxes (or fees) in Latvia to the State Revenue Service which exceeds 150 EUR in total, as well as in other cases provided for in the Regulations. The validity period of the permit is five years, which may be extended by a maximum of two years upon a justified request.

One permit for each  type of electricity production equipment shall be obtained per unit of land. If the project developer wants to introduce several types of electricity production equipment within the framework of one connection, or to add another type of electricity production equipment to the type of electricity production equipment specified in the initial permit, a hybrid permit shall be obtained. In this case, the project developer shall indicate in the application to the Bureau the capacity of the various types of electricity production equipment to be installed and their capacity ratio. In addition, the project developer is obliged to observe this ratio during the implementation of the project. It means that if one of the types of electricity production equipment is implemented with a lower capacity than is specified in the hybrid permit, the capacity of the other electricity production equipment to be installed shall also be reduced according to the ratio specified in the hybrid permit. The system operator shall also inform the Bureau about the introduction of different types of power production equipment with a common connection, and this information will serve as the basisfor replacing multiple separate permits with a single hybrid permit.

If the electricity production capacity has been introduced in a smaller amount than was prescribed in the permit or the hybrid permit, the project developer shall obtain a new permit for further capacity increase.

It should be noted that if the project developer requests a hybrid permit to add another type of electricity production equipment in addition to the type of electricity production equipment specified in the initial permit, and the initial permit was obtained before the entry into force of the Regulations, the capacity of the electricity production equipment to be added cannot exceed the capacity of the electricity production equipment specified in the initial permit. For example, if a permit was initially obtained for the installation of a solar power station with a capacity of 100 MW and the project developer wants to obtain a hybrid permit to add a wind power station to it, the capacity of the wind power station to be installed cannot exceed 100 MW.

Within ten months of receiving the permit, the project developer shall start the introduction of the electricity production equipment or increase the existing electricity production capacity and submit a corresponding certificate to the Bureau, appending the written agreement concluded with the system operator on the conditions for the implementation of the connection process or the connection agreement. The project developer is entitled to submit an application to the Bureau for the cancellation of the permit and refund of the security deposit before the expiration of the agreed term. However, if the introduction of the electricity production equipment or the increase of the electricity production capacity has not started within the agreed term and the project developer has not submitted an application for the cancellation of the permit, the Bureau is entitled to make a decision on the cancellation of the permit without refund of the security deposit.

The project developer is entitled to request the Bureau to transfer the permit received to another person, if the process of increasing the electricity production capacity or introducing a new piece of electricity production equipment  has started and the project developer and the system operator have concluded an agreement on the conditions for the implementation of the connection process or a connection agreement. The conditions of the permit issued shall not be changed as a result of the transfer.

The holder of a permit issued before the entry into force of the Regulations may request its cancellation with refund of the security deposit until 1 July 2024, if the permit holder has decided not to carry out the activities specified in the permit.

The Regulations will enter into force on 1 January 2024.