The energy sector development in Latvia depends on energy consumption and supply and availability of energy resources. A structure of energy end-user in Latvia is characterized by high energy consumption in households, public and service sector comparing with relatively low consumption in rural and industrial sector. This situation put on special tasks for energy sector development, especially choosing energy resources to ensure energy production and supply. The system analysis of development possibilities of energy wood production units in this paper is examined based on various aspects: increase of a demand of wood chips; increase of an amount of wood chips production; increase of wages and taxes; infrastructure development caused by increase of investment. System analysis shows that a regional dimension of the use of wood chips is just a one of the factors that should be integrated in the development of state energy sector.