In paper are analyzed development conditions of Latvian power system, as well as selected the optimal sustainable development methods and technologies. In the paper it is described: 1) the transmission network and generation system development model; 2) results of Latvian power system development analysis till 2050. Research shown, that taking into account development conditions of Latvian power system, in nearest future, especially after Ignalina NPP closing, we will have base power capacity deficit. Therefore, the topical problems are related to new power plant construction, transmission network reconstruction taking into account liberalized electricity market conditions. One of possible ways of solving this problem is building modern nuclear power plants.