Rising energy prices in recent years have prompted many businesses to take a closer look at their electricity, heating and other energy costs and seek ways to reduce them. However, as ALTUM business energy efficiency expert Arnis Dzalbs (pictured) points out, it is important to distinguish between two things – the price of energy and how efficiently a company uses it. He emphasises that energy efficiency is not simply about lower bills. It is also closely linked to production efficiency, a company’s competitiveness and its ability to grow over the long term.
A company operating with outdated equipment or buildings inevitably risks becoming less competitive over time. By contrast, companies that regularly invest in development can not only reduce their energy consumption but also improve their production processes. Energy efficiency should no longer be viewed as an external burden imposed on businesses or something they have to comply with simply because someone requires it. Dzalbs emphasises that today efficient production, competitiveness and energy efficiency essentially go hand in hand.
“An energy bill is only one component of a company’s overall costs. The costs arising when outdated equipment breaks down unexpectedly, requires lengthy maintenance or prevents a company from fulfilling an order can prove far more significant. Perhaps the biggest problem is an unsuitable building where people do not want to spend time or work. Therefore, when assessing the need for investment, companies should look not only at how many kilowatt-hours a particular piece of equipment consumes, but also at its capacity, downtime, repairs and how effectively the company is able to utilise its production potential,” explains the ALTUM expert.
Photo: Viesturs Radovics/DELFI
A Common Problem – No Time to Take a Step Back and Look at the Bigger Picture
How can a business owner determine where the greatest energy consumption occurs and what could be improved? The ALTUM representative has observed that businesses analyse their energy consumption systematically relatively rarely. This is not because they consider it unimportant, but simply because day-to-day operations bring other priorities. They have to manage production, address human resources issues, maintain cash flow and fulfil customer orders.
Clearly, a company manager cannot also be expected to be an energy efficiency expert. This is where an independent outside perspective – an energy audit – can prove valuable.
“Companies that have carried out an energy audit of their production processes, buildings or infrastructure discover both small improvements that can be implemented immediately and pay for themselves very quickly, as well as larger investments that need to be considered over the medium or longer term.”
Arnis Dzalbs, ALTUM Business Energy Efficiency Expert
For example, during an energy audit at one company, it was discovered that a compressed-air compressor was unnecessarily continuing to operate at night and on weekends. This is just one example demonstrating that an energy audit can serve as a very practical starting point – helping identify not only major investments but also everyday practices and minor technical issues that can generate significant costs over time.
Act Proactively Rather Than Waiting for Something to Break
Everything appears to be working – the equipment has not broken down, the building can still be used and the heating boiler is still operating. So why change anything? Many businesses also postpone investment while waiting for “better times”. A company tightens its belt this year, postpones investment and changes nothing, hoping that the situation will improve next year. However, as Dzalbs points out, the perfect moment may never arrive.
As an example, he mentions a company that replaced its old equipment five years ago, subsequently modernised its building and is now planning to improve its heating system. In none of these cases had the previous solution completely stopped working. The company simply moved systematically towards more efficient operations.
“Over the long term, this approach creates a significant advantage. If one company postpones investment for years while another invests step by step, the difference in competitiveness becomes increasingly pronounced over time. And this is not only about electricity or heating costs, but also about production capacity, downtime, unplanned repairs and the working environment for employees. At a time when labour shortages are a serious challenge for businesses, the working environment is also becoming increasingly important.”
Arnis Dzalbs, ALTUM Business Energy Efficiency Expert
Photo: Viesturs Radovics/DELFI
EUR 40 Million for Business Greening in Latvia’s Regions
“Perhaps now is the right time to explore what support opportunities are available for improving energy efficiency?” Dzalbs suggests.
The opportunity is particularly relevant at present, as EUR 40 million in funding from the European Regional Development Fund is available to businesses in Latvia’s regions for business greening under the ALTUM Business Greening Support with a Capital Rebate programme. The programme provides support for improving the operations and production processes of existing businesses, including improving the energy efficiency of buildings, modernising production equipment and improving production processes. Importantly, the support is not intended for the construction of new buildings or entirely new production facilities. The aim is to help businesses improve what they already have.
There is still a widespread misconception that energy efficiency investments are primarily intended for large companies with turnovers of millions of euros and extensive production facilities. However, this is not the case. Latvia’s small and medium-sized enterprise (SME) sector includes a wide range of businesses, including established manufacturing companies with equipment, buildings and significant energy consumption. Moreover, even within the structure of a large company, an individual production facility in a particular Latvian city or municipality may be relatively small, employing local workers and operating its own equipment. There is therefore no reason to assume that the support is intended only for “large” companies.
ALTUM’s Business Greening Support is essentially a loan with a special condition known as a capital rebate. Following implementation of the investment and successful completion of the project, 30% of the loan amount is written off – in other words, the business receives a 30% capital rebate. The loan can be obtained either from a bank or from ALTUM.
In practice, this means that a company does not need to wait until its old equipment breaks down completely or its heating boiler can no longer perform its function. If the investment is necessary anyway, the available support can provide an incentive to implement it sooner and on a broader scale.
“The investment itself does not necessarily have to be enormous or amount to hundreds of thousands of euros. In this case, both the energy audit mentioned earlier and a consultation with ALTUM can serve as excellent support tools. Instead of trying to research all the available information independently, a business owner can review their investment plans together with a specialist and determine which of them could be implemented using the support available under the greening programme.”
Arnis Dzalbs, ALTUM Business Energy Efficiency Expert
A separate support measure worth EUR 7.8 million is also available to SMEs in the municipalities of Limbaži, Saulkrasti, Ogre and Tukums. Applications for businesses in these areas opened on 24 August and will remain open until 13 November, after which the programme will be opened to a broader range of applicants.
“Businesses that already have investment plans for the coming months or years should therefore review them now. It is also important to emphasise that companies do not have to compete with one another in the hope that their project will be ‘good enough’. This is not a competition. Applications are assessed in the order in which they are received,” Dzalbs adds.
Photo: Viesturs Radovics/DELFI
Heat Pumps, Solar Panels and Even an Electric Tractor – A Different Solution for Every Business
ALTUM’s experience demonstrates just how differently companies can approach energy efficiency. For example, under the Business Greening Support programme, a company in the Madona area purchased an electric tractor with a three-cubic-metre bucket. This demonstrates that the transition from fossil-fuel-based solutions to electric technology is not merely a theoretical idea – it is already taking place among Latvian businesses.
Meanwhile, a company in Daugavpils demonstrated that a modern, energy-efficient building is one of the prerequisites for improving the well-being of employees and customers. At the company’s retail premises, the old heating solution was replaced with heat pumps and solar panels were installed. The new system makes it possible to automate heating, quickly heat the premises and water, adjust temperatures for weekends and reduce the need for separate infrastructure for fuel storage.
At a printing company in Kurzeme, meanwhile, three greening projects have already been implemented – equipment has been modernised and solar panels for self-consumption have been installed on the roof. The company initially implemented one project, discovered that the process was not as complicated as it had initially seemed, and continued investing in energy efficiency.
“These examples show that there is no single universal solution for every business. For one company, the greatest benefit may come from new production equipment; for another, from modernising its building; and for another, from upgrading its heating system or generating energy for self-consumption.”
Arnis Dzalbs, ALTUM Business Energy Efficiency Expert
Where to Start?
ALTUM encourages businesses to familiarise themselves with the programme’s terms and conditions on its website, where the key information and required documents are available in one place. Businesses can also contact ALTUM consultants, call the information line on +371 67774010 on weekdays from 8:30 to 17:00, or arrange an in-person or remote consultation.
ALTUM specialists are also prepared to visit businesses in the regions and review their investment plans for the next six months, one year or two years together with them. This can be particularly valuable for smaller businesses, where one person is often responsible for both production and finances.
“In such a situation, it is easy to become absorbed in day-to-day work and overlook an opportunity that is right in front of you. If the investment is necessary anyway, perhaps the question is not ‘Do we need it?’ but rather ‘Can we do it now by making use of the support available?’” Dzalbs adds.
Businesses can receive ALTUM financing for energy efficiency projects with a capital rebate of up to 30% of project financing (EUR 300,000 to EUR 3,000,000, depending on the region and size of the company). Support is available for investments that help reduce energy consumption, modernise production or introduce renewable energy solutions. The capital rebate means that, following successful implementation of the project, part of the loan is written off, reducing the investment cost for the company. More information is available at altum.lv.
Photo: Viesturs Radovics/DELFI
