DEVELOPMENT OF THE LATVIAN ENERGY SECTOR COMPETITIVENESS SYSTEM DYNAMIC MODEL

One of the problems of the Latvian economy is related to the energy sector. In this sector the increasing competition is related to regional market expansion, building new transmission connection; fuels and electricity market price conjuncture significant change; energy efficiency requirements increasing, renewable energy requirements increasing and new market regulatory mechanisms. The system dynamics model can solve sector competitiveness problems. With the help of the developed model, it has been estimated that increase in total electricity consumption (around 10%) can be expected in Latvia during the next 10 years. Decline in electricity loss and electricity imports is predicted. Increase of the capacity of production means and the amount of the produced energy is being forecasted.