The first biomass trading platform in Latvia has successfully completed its first year of operation, implementing 42 online auctions, in which transactions were concluded for 4,908,281 euros and 182,980 MWh. In total, there are currently 90 registered market participants on the platform, and a number of the largest participants of the Latvian energy market, such as AS Rīgas Siltums, SIA Liepājas Energy and SIA Jūrmalas Siltums, are also participating in the platform.
“The goal was to promote the efficiency of the Latvian energy market by creating a single trading platform for biomass, where both sellers and buyers can openly determine the best market price at the time, rely on the quality of the raw materials offered and the terms of delivery. I think we have succeeded because we are on the platform have been able to gather almost all the main market participants – from biomass producers to fuel consumers. For example, the heating supply companies of Latvia’s big cities trade on the platform, which benefits significantly from the transparency of the market,” says the head of the platform, Gunārs Greiža.
“The use of biomass in energy production has become an important factor in promoting sustainable energy and the reduction of greenhouse gas emissions. The BioEx platform, as the first biomass trading exchange in Latvia, ensures that the biomass sold on it complies with the criteria set out in the Cabinet of Ministers’ regulations on the criteria for sustainability and saving greenhouse gas emissions. These amendments entered into force on July 19 this year, opening up new opportunities for biomass energy producers. BioEx is an example of how free market mechanisms promote Latvia’s approach to achieving climate goals,” says Kaspars Melnis, Minister of Climate and Energy.
Over the next year, BioEx plans to develop its operations by involving more and more new market participants on the platform, with a special focus on the private sector, as well as by introducing new categories of raw materials such as firewood and pellets in trading sessions. Also, BioEx will continue digitalization of operations to ensure more effective data exchange with state institutions and companies involved in the energy market.
“A unified trading platform has significantly simplified the purchase of wood chips for heat production, and the important thing is that we can gain full confidence that we are buying fuel for the needs of our municipality at the currently best possible price in Latvia. It is also important that the platform helps ensure a uniform raw material standard and trade data for reports ,” says Valdis Vītoliņš, member of the board of the Association of Latvian Heating Companies and chairman of the board of SIA “Jūrmalas siltums”.
Most of the heat producers for the 2023/2024 heating season have chosen the strategy of purchasing fuel with long-term contracts for the entire heating season. The price for these contracts has returned to the level of 25-30 EUR/MWh before Russia started the war with Ukraine, depending on the quality. On the other hand, currently the price of “SPOT” is significantly lower, ranging from 20-25 EUR/MWh, so there is an increasing tendency to conclude SPOT transactions in addition to long-term contracts. This is also indicated by the structure of transactions carried out on the BioEx platform, namely 46% of transactions are long-term, 38% – monthly, and 16% – weekly.
Despite the fact that the prices of roundwood fell already in the first half of 2023, the volume of logging was sufficient to create sufficient reserves of energy wood for the heating season of 2023/2024. However, in the second half of 2023, logging volumes have decreased, as private forest owners are waiting, realizing that the fall in roundwood prices will continue. This trend could potentially affect the supply of energy cosken in the first quarter of 2024, but taking into account the relatively low demand at the beginning of the 2023/2024 heating season, since the heating season has started on average three weeks later than usual and in the first decade of November the average air temperature in Latvia was + At 7.4°C, which is 3.7°C above the decade norm, the supply during this period will be provided by the remaining reserves.
2023-12-22 10:42:00
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