New Member State Latvia Electricity Market Problems

The principal task of the electricity market formation in Latvia is the stepwise opening and modernization of its operation in conformity with the EU directive 2003/54/EC so that it could integrate in the Baltic and joint European electricity market. Additional difficulties in the formation of the electricity market in Latvia maybe connected with there organization processes of the electricity sector. Due to unsuccessful privatizations in the 1990-ties a referendum took place in Latvia against the privatization of the power system and a corresponding law was passed which affects the formation of the model of the electricity market. Scrupulous public attention is being paid to any reorganization of the power system in Latvia (according to the EU Directive2003/54/EC) not to break the privatization law, which would cause a rise in the electricity prices. Any of the new member states has specific features in the formation of the electricity market in order to fulfill the EU directives. There are also requirements for the development of the powersystem in the new member states so that they could function efficiently and compete in the electricity market