National Policy Alignment for Energy Renovations: MCE’s Role in Policy Analysis and Implementation
1. National Policies for Energy Efficiency
A major driver for building renovation in Latvia is the country’s commitment to energy efficiency and climate goals. At EU level, member states have a binding obligation to jointly ensure an 11.7% reduction in energy consumption by 2030 compared with 2020 levels. In addition, revised EU legislation including the updated Energy Performance of Buildings Directive, requires member states to adopt national renovation strategies, develop minimum building performance standards, and implement supporting frameworks such as renovation passports.
The Latvia’s National Energy and Climate Plan 2021–2030 (NECP) has been developed in line with common EU policy frameworks to ensure that national energy and climate policies are aligned with shared EU objectives
The NECP is the main national policy document defining key objectives and actions in the field of energy and climate, including greenhouse gas emission reductions and increased of carbon sequestration, renewable energy expansion, energy efficiency improvements, enhanced energy security, energy market infrastructure development, and support for innovation, research and competitiveness.
The main targets of the NECP include 17% reduction in greenhouse gas emissions in non-ETS sectors by 2030 (compared to 2005), increase the share of renewables in total final energy consumption to 50% by 2030, increase energy renewables to 57% in electricity production, up to 70% in heat supply, up to 14% in transport. In the energy efficiency sector is targeted to limit the growth of primary energy consumption and to increase the pace of building renovation in residential and public buildings.
In Latvia, several state institutions and municipalities are responsible for the development and implementation of energy efficiency policy.
The Ministry of Climate and Energy develops energy and climate policy, prepares regulatory enactments, coordinates the implementation of the NECP and monitors the implementation of energy efficiency targets. The Ministry of Economics is responsible for the energy efficiency policy of construction and buildings, the promotion of energy efficiency measures in enterprises, the development of support programs, and its subordinate institutions carry out policy implementation activities, for example, Development Finance Institution ALTUM, which is a Latvia state-owned company. At the same time, municipalities are responsible for the implementation of energy efficiency projects in their territory, the modernization of public infrastructure, as well as the promotion of public information.
Energy efficiency improvements in buildings are a central element of the European Union’s Renovation Wave. The main goal of this initiative is to reduce energy consumption in buildings and lower associated carbon dioxide emissions. Typical renovation measures include insulation of facades, roofs and replacement of windows, improvements to building envelopes, and reduction of air leakage. While these measures are effective in reducing heat losses, their impact on indoor air exchange and indoor climate is often underestimated in practice.
Ventilation systems play a crucial role in maintaining a healthy indoor environment while supporting overall energy efficiency. They directly influence indoor air quality, thermal comfort and humidity levels and are closely linked to the building’s overall energy balance. Research and practical experience show that insufficient ventilation, especially after insulation and other energy efficiency measures – can significantly worsen indoor environmental quality, even when energy consumption is reduced.
At national level, these aspects are addressed through Latvian regulatory requirements. These include regulations relevant to the design and operation of ventilation systems, including in public buildings, and define the basic requirements for indoor climate quality and ventilation performance. However, there are no mandatory requirements to install a ventilation system after renovation, and as a result, such systems are often not implemented due to cost‑saving considerations.
2. Role of National Authorities and Society in Policy Analysis and Implementation
In Latvia, the development of national policies and regulations follows an established approval process that ensures broad stakeholder involvement. The drafting authority engages relevant national institutions, local governments, representatives of the public and private sectors, professional organizations, and society.
Every member of society has the right to participate in the preparation of legal acts. This is ensured through transparent public consultation processes, during which opinions and comments can be submitted and are considered in the development of legislation. The drafting authority provides open communication and access to information throughout the process. Legal acts are adopted by the government, approved by parliament, and promulgated by the president.
The same participatory approach applies to policy planning documents in the energy sector. As a result, a shared understanding and informal consensus is formed among stakeholders regarding policy objectives and implementation measures. This collective approach supports the effective achievement of climate and energy goals, including the reduction of greenhouse gas emissions and improvements in energy efficiency.
3. Role of the Ministry of Climate and Energy in Supporting Energy Efficiency Targets
The Ministry of Climate and Energy (MCE) plays a key role in analyzing and identifying additional actions needed to implement national energy policies. One of the main implementation tools is the development of financial support programmes targeting both the public and private sectors.
In the field of building renovation, the MCE has identified significant gaps related to ventilation systems. In particular, there is a need to renovate or install modern ventilation systems in public buildings such as schools, kindergartens and office buildings. These solutions must comply with regulatory standards while ensuring a balanced and cost-effective approach that integrates energy efficiency, health requirements, and reasonable renovation and maintenance costs.
To address these challenges, the MCE joined the FORTESIE project to deepen the analysis and develop recommendations for practical solutions. Within the project, guidelines for sustainable ventilation systems in public buildings are being developed, including possible financing approaches and models.
The aim of these guidelines is to provide practical, evidence-based recommendations for the design, installation, operation, maintenance and monitoring of ventilation systems in Latvian public buildings, while integrating energy efficiency and indoor environmental quality requirements. The guidelines emphasize the importance of ventilation systems in order to provide appropriate (according to legal requirements) indoor climate of buildings and are based on analysis and offer comprehensive and transferable solutions and recommendations for improvements to the ventilation systems of public buildings, especially schools, kindergartens and office buildings. These outcomes can provide support in the development of new energy efficiency support programmes, including measures specifically targeting ventilation system renovation and installation. The guidelines also provide fact-based information for building owners, encourage investment in improvements, and contribute to building public trust and awareness.
An important part of energy efficiency policy implementation is the renovation of public buildings and the monitoring of achieved results. This includes applying baseline values for energy consumption in public buildings, setting annual energy reduction targets, and digitalizing data collection and monitoring systems. Public buildings can thereby serve as examples of best practice.
The main challenges in the Latvian building renovation market include outdated infrastructure, rising renovation costs, the need for changes in laws and regulations, limited technical capacity in the public sector to prepare projects and technical documentation, access to national and EU funding, and generally low public awareness.
Support measures therefore combine different financial instruments, including national budget programmes and EU funds. In some cases, investments are expected to generate savings that allow repayment over time, while in other cases sufficient financial returns are not expected. For such projects, national or EU funding may be particularly important at the project development stage.
Latvia offers various support programs aimed at improving the energy efficiency of buildings, particularly for renovating apartment buildings and public facilities. For example, Emission Allowance Auctioning Instrument (EAAI) and Modernisation Fund governed by the MCE supports measures that contribute to climate change mitigation and adaptation, for example through improving the energy efficiency of buildings in both the public and private sectors, the development and deployment of renewable energy technologies and implementing integrated solutions to reduce GHG emissions.
In addition, European Union Funds are implemented through institutions such as the Development Finance Institution ALTUM, which provides access to financial resources via support instruments – loans, guarantees, investments in venture capital funds – in areas prioritised by the state. The funding for the implementation of state support programmes comprises both EU funds and national public funding as well as funding raised by ALTUM with international institutions and capital markets.
The Energy Grant is being implemented in cooperation with the European Investment Bank and funded by the European Commission’s InvestEU Advisory Hub, with a total allocation of EUR 4.25 million. This grant is intended to support the preparation of technical documentation for energy efficiency renovations in multi-apartment buildings. Apartment owners can apply for the grant that will cover 90% of the total cost of preparing the technical documentation, while the remaining 10% must be co-financed by the apartment owners.
Other models and instruments are also being explored, alongside traditional co-financing schemes – including ESCO approaches, crowdfunding and other innovative financing mechanisms.
One of the main conclusions reflected in the guidelines is that after the energy efficiency renovation projects in public buildings, it is essential not only to meet energy efficiency requirements and achieve energy savings, but also to ensure sufficient indoor air quality. This balance can be achieved through compliance with ventilation performance parameters, high-quality installation and post-implementation monitoring and maintenance. The effectiveness of the use of financial support can be assessed using qualitative efficiency parameters such energy savings, indoor air quality and the health and comfort condition of end-users.