Latvenergos prospective energy reform

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Latvenergos prospective energy reform
Karlis MIKELSONSChairman of the BoardLatvenergo
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Survival of the Fittest Making practical
connections on Darwins theory

• The best way for large organizations to work
  through the dilemmas posed by innovation is
  biological evolution
• Success and survive in the wild might be
  analogous to success and survive in the business
  world
• The company best adapted to its environment is
  most likely to survive, and most likely to
  flourish in the long-term

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Competence

• Network business natural monopoly
• Security of supply
• Regular development of the network structure
• Continuous investment program
• Optimization and replacement of generating
  capacities
• Daugavas HPP
• Rigas CHP-1
• Rigas CHP-2

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Competition

• A species will succeed only if it is fit for the
  environment in which it must survive. Companies
  also co-evolve with their environment the
  markets they compete in, the people they recruit,
  their partners and suppliers
• Lack of marketing experience
• Cooperation with partners and suppliers
• Public Service Obligations
• First mover advantages

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Opening of the electricity market in Latvia
Until now no single customer has changed its
supplier

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Prices of electrical energy in EU
COMMISSION OF THE EUROPEAN COMMUNITIESAnnual
Report on the Implementation of the Gas and
Electricity Internal Market
Source
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Scandinavian experience
Source
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Customer expectations

• Species that survive tend to have simple
  designs. Successful companies seem to follow
  simple rules and embody clear values that allow
  people the scope for entrepreneurship and
  innovation
• Security of supply
• Long term agreement
• Satisfaction - provided services
• Price
• Quality
• Information
• Environmental goals
• Consumer rights

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Vision

• Responsibility towards society
• Independence of regulatory decisions
• Where to draw a line between security and profit?

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Thank you!