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. A use of specific energy resources depends on energy supply policy and total consumption of energy resources depends on development of every type of energy resources in regions. Now there is unjustified high proportion of fossil fuel in state energy balance which is possible to reduce by a beginning of active use of local fuel in regions. Local energy resource development in Latvia should be based on principles of clustering, integration and gradualness. The first principle is based on situation when every region chooses development of its own energy sector, integrating development of regional energy master plan into territorial plan of area or city. By use of integration principle it is possible to forecast total development of state energy sector, taking down regional limits of energy supply. Now it is successfully established by development of natural gas pipeline. The same grid could be established for use of energy wood, straw and other biomass in energy sector of Latvia. Based on research on the potential, technical possibilities of use, economical and socioeconomic expenses of renewable energy resources, is possible to choose activities that should be realised in short, medium or long term. An interest of municipalities in the use of wood is examined in the aspect of establishment of new work places, inflow of investment in new production units and of infrastructure development. 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.