OREANDA-NEWS. May 18, 2011. For the next two years, one of the largest consumers of electricity by volume in Latvia, Latvijas Dzelzcels AS (Latvian Railway, LDz), will purchase electricity from Latvenergo AS, which has won the tender with the most economical bid. This result once again proves that, operating on the free market and participating in tenders on equal terms, Latvenergo AS is the most economically advantageous provider for clients who purchase electricity according to free market principles.

Latvijas Dzelzcels AS has signed an agreement with Latvenergo AS for the purchase of electricity for a two-year term. The average annual electricity consumption of LDz is stable at around 120 GWh, which currently makes this company the largest client by consumption volume in Latvia. Winning an electricity supply tender of this scale secures the leadership of Latvenergo AS in the Latvian electricity market.

Latvenergo AS, actively trading its services not only in Latvia but also in other Baltic States, has won a significant number of enterprises (market customers) as its clients. The total number of market customers in Latvia currently reaches a total of 1231 companies, in Lithuania – 578, while in Estonia Latvenergo AS sells electricity to 45 market participants.

Since the Baltic markets are integrated with each other and electricity in all countries is traded following the power exchange rates, all traders have similar costs as the electricity is bought and sold on the power exchange on equal terms. Even in this situation, by making use of the experience accumulated through the years, Latvenergo AS is able to offer the lowest price.

Latvenergo AS has been operating in the free market conditions in Latvia since 2008, which means it has solid experience and knowledge in market principles and functions. Since the time of market relations becoming effective in the power sector, requiring companies to make agreements with electricity traders for the purchase price, enterprises commonly hold tenders and price pools. Latvenergo AS takes advantage of this situation and is an active participant. It is this particular supplier selection mechanism – to choose the best deal by tender – that ensures fair competition, as the winner is determined in the price and service quality comparison process.

Latvenergo AS is the largest electricity producer and trader in Latvia, not only supplying electricity to regulated market customers – households and associated users – but also successfully cooperating with those market customers who purchase electricity at an agreed price. Overall, the Latvian power company has acquired 30% of the Baltic market and also actively expanding electricity trade abroad with a total customer base of close to one million.