One of the most pressing problems in the Latvian economy is related to the energy sector. The most characteristic feature is coupled with the low efficiency of thermal energy consumption of households as a result of poor insulation of existing buildings in Latvia. Solving energy sector problems requires a comprehensive decision, both in energy production and consumption. Latvian energy sector model consists of resources, production and consumption blocks. Resource blocks consist of primary energy resource blocks: petroleum products, solid fuel, wood and gas blocks. Primary energy resources are used for production of heat or electricity, they are shown in the production blocks. Both the primary and produced energy are passed on to final consumers, who make consumer unit blocks. It consists of: transport, agriculture, households and other (industrial and services sectors) blocks. The model key role is to forecast energy consumption by separate groups, both consumers and energy resources groups; to estimate energy sector impact on environment. The model has been developed to estimate the impact of buildings thermo insulation program on Latvian economy, the article reflects these results.