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Latvian PM May Face No-Confidence Vote Over Renewable Energy Subsidy Reform

April 5, 2019


A group of Latvian lawmakers tabled a petition on Tuesday, calling on Prime Minister Krisjanis Karins to resign over a delayed reform of a renewable energy subsidy scheme.

The group of MPs, that include representatives of the opposition left-wing Harmony party and the centrist Greens and Farmers Union, the ruling KPV LV, as well as several non-partisan MPs, asked the parliament to vote on confidence in the prime minister at a parliament session scheduled for April 11.

One of the petitioners, non-partisan MP Aldis Gobzems, explained the no-confidence motion in a Facebook post, saying that “in a law-governed country, the parliament’s decisions are implemented and not ignored”.

In January 2019, the parliament passed a resolution ordering the Economics Ministry to urgently draw up a bill to abolish the system where energy consumers are charged the so-called mandatory procurement component, which is included in electricity bills to subsidize renewable energy producers.

According to the parliament’s decision, the subsidy scheme had to be phased out by March 31. However, the Economics Ministry has come to the conclusion that a hasty abolition of the subsidy scheme would entail a number of serious risks, including a steep increase in energy prices, 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.

The Karins-led government therefore decided not to scrap the renewable power subsidies on March 31 and ordered the Economics Ministry to work on alternative solutions. 

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