Sadales tīkls closes the first half of 2023 with a loss of EUR 6.6 million

Sadales tīkls AS closed the first half of 2023 with a loss of EUR 6.6 million, due to lower volumes of electricity distributed, as well as an increase in operating costs due to an increase in electricity costs, general inflation and financial costs due to the increase in EURIBOR rates. Distributed electricity decreased by 101 GWh (3.2%) year-on-year. Consumption declined in all customer segments, leading to a decrease in revenues of EUR 4.3 million year-on-year.

The decline in electricity consumption continues to be driven by energy efficiency and conservation measures implemented by citizens and businesses, as well as by increased solar generation for self-consumption. The largest year-on-year drops were observed in trade (minus 8.2%), agriculture (minus 5.6%) and households (minus 5.2%).

The increase in the company’s costs will continue in the second half of 2023, with the entry into force of the new transmission tariff on 1 July, which will lead to a cost increase of more than EUR 8 million per half-year. Costs for process consumption (losses) and for the purchase of electricity to be returned to net metering users are also expected to increase in the autumn and winter months.

To compensate for the increase in costs by improving the tariff structure and cost allocation principles, the new electricity distribution service tariffs of Sadales tīkls AS were approved at the meeting of the Public Utilities Commission (PUC) on 22 May 2023. They entered into force on 1 July 2023. During the first half of the year, active cooperation took place with PUC, as well as with partners and stakeholders in the public sector in the preparation of the draft tariffs. In parallel, active explanatory work on the upcoming changes was carried out both during the tariff development period and after the approval of the tariffs, information materials for customers were developed, as well as meetings with entrepreneurs and electricity traders were organised.

During the first six months of 2023, the design and construction of customer solar power stations as well as the application and connection of microgenerators continued actively. The number of microgenerators connected to the distribution electricity network at the end of the period exceeded 15 000 and their total generation capacity reached 128 megawatts (MW). The pace of development of microgeneration has stabilised compared to 2022, but remains dynamic.

In the first half of 2023, the company continued its efforts to improve the quality of service by developing a weather-proof electricity network, increasing the share of insulated wires in the overhead electricity network and renewing 702 km of power lines. From 2023, bare wires are no longer used in the construction of the new 20 kV electricity network. EUR 26 million has been invested in the rebuilding and renewal of the electricity network, bringing the total investment to EUR 45 million. With the improvements implemented and fewer natural disasters, the average duration of a power outage per customer in the first six months of the year was 86 minutes – a 38% reduction compared to the same period last year.

A pilot project to survey overhead power lines with unmanned aerial vehicles, or drones, was launched in 2023. The aim of the project is to collect data that can then be analysed to record faults in the electricity network and used to develop a digital twin of the electricity network managed by the company. The drones used in the pilot project both take photographs of the power lines and scan them using airborne laser scanning technology, which also makes it possible to determine with a high degree of accuracy, the extent of vegetation in the protection zones and other geospatial details relevant to the survey of the electricity network.

In 2023, the company continues to educate the public on electrical safety issues and actively participates in discussions on the challenges of energy sector development.

The six-month unaudited interim report of Sadales tīkls AS is available here.