RIGA, April 17 (Xinhua) -- The Latvian government on Tuesday set up a workgroup tasked with developing proposals on how to do away with an unfair subsidy system in the Baltic country's energy sector which may cost consumers hundreds of millions of euros over the next decade, local media reported.
Latvian Economics Minister Arvils Aseradens was appointed chairman of the workgroup, which is expected to come up with a solution to the problem by September 2018. The task force includes 24 representatives of the energy sector, entrepreneurs' organizations, universities and government institutions.
The current system where energy consumers are required to pay the so-called mandatory purchase component, a charge that is included in electricity bills to subsidize renewable energy producers, is a "fundamental, national and macroeconomic mistake which has to be corrected", Aseradens said.
The economics minister said that as a payment charged to households and corporate entities, the mandatory purchase component must be abolished and replaced with an alternative mechanism that would meet public interests and at the same time ensure a sustainable generation of green energy in the future.
The issue of the mandatory purchase component system was brought to public attention last year when journalists discovered that several combined heat-and-power plants in Latvia might have cheated to obtain their green energy licenses allowing them to sell power for increased prices.
It turned out that some of these plants had used portable generators and only generated power for a limited period of time to pass the necessary tests. Several dozen companies have already lost their green energy licenses, but some of them are determined to contest the annulment of their licenses in court.
The inclusion of the "green energy" component in electricity bills has also caused great discontent among energy consumers.