Energy Crisis Splits the Ruling Party

Cristian RUSSU

The high costs of severing energy ties with Russia are toughening internal party confrontation in the PAS. The ruling party is unwilling to take responsibility for the consequences of its decisions and has found who to blame

The beginning of the year was marked by a powerful information attack by the pro-government media and by NGOs close to the government against one of their own, Deputy Prime Minister Andrei Spinu. Among them was Valeriu Pasha and Sergiu Tofilat’s NGO WatchDog that released a propaganda video against A. Spinu on January 12. Accusations and criticism against the Deputy Prime Minister poured out abundantly. All pro-governmental channels and invited experts voiced exactly the same theses and accused Andrei Spinu of poor management in the Ministry of Infrastructure, incompetence, miscalculations and even abuse of office. The Deputy Prime Minister has even become the subject of satirical shows. The ongoing information campaign is a clear sign of a split within the PAS. What exactly is the charge against Spinu? Among the main claims is the failure of the country’s energy security policy. Starting with the signing of agreements with Gazprom in October 2021 to revise the price formula and the decision to audit the debts of Moldovagaz, which eventually led to an increase in the price of gas. This is followed by the statement that the Deputy Prime Minister pushed through the interests of the Russian company Power Machines during the repair of the Chisinau cogeneration plant, the subsequent breakdown and downtime of the cogeneration plant. There are also the non-transparent purchases of fuel oil and gas during the last year, as well as the questionable power contract with the Cuciurgan TPP for electricity supplies at the beginning of December. They cite figures of losses, lost profits, and point out that all this will place an exorbitant burden on the population. For example, compared with 2020, the cost of energy resources last year cost Moldova four times more: $2.4 billion against $600 million. We can, of course, recall that the level of air pollution due to the operation of our fuel oil-fired cogeneration plants is three times higher than the norm, and Spinu is also responsible for this. It is noteworthy that the lynching of the Deputy Prime Minister began only after it became clear that Moldova would survive the heating season safely and the worst scenarios with prospects of large-scale gas and electricity blackouts were not to come true. The news about the fall of spot prices at European exchanges below 600 dollars per thousand cubic meters at once made many people feel cheated. And now the culprit should be punished because the citizens will have to pay higher tariffs for a long time to pay back the credit worth 250-300 million euros that was given for the purchase of gas at an average price of 1000 dollars per thousand cubic meters. Are the accusations justified, and who is really responsible? If we consider revising the price formula for gas supplied by the Russian monopolist, it seems quite justified according to the state of prices as of October 2021. At that time, who imagined that after 4 months the price of gas on the EU spot markets would be breaking records every day because of the Russian invasion of Ukraine? The same goes for gas purchases to prepare a reserve in case supplies from Russia are cut off. The need to prepare for hard times to protect democracy in Moldova has been talked about since the spring by the entire political leadership of PAS. All European states have been actively making gas reserves since the summer in order to survive this winter, trying to overcome their energy dependence on Moscow. High prices, the lack of available gas supplies and, in the case of Moldova, the lack of gas storage facilities required serious efforts and extraordinary solutions. What kind of transparency that our civil society demands can there be in a de facto energy confrontation? The procurement of fuel oil for converting Chisinau cogeneration plants to alternative fuel was also problematic. Price hikes on the Romanian exchange, the lack of necessary infrastructure for storing large amounts of fuel oil, accidents on the railroad tracks, and many other factors. Then, there were allegations on the reconstruction of the Chisinau thermal power plant. It is worth remembering here that the contract to reconstruct the power block 2 and to repair the units of the power block 3 was signed with the Horus consortium (which includes the Russian Power Machines) following the results of a tender under the World Bank’s control. Initially, the president, the Ministry of Infrastructure and the power engineers themselves pointed to the objective and forced nature of this deal, but pressure from external partners made them reconsider their position. In April, the annulment of the contract was announced. Unit 2 was left without any overhaul, and summer revealed that unit 3 was barely functioning. Thermoelectrica decided to at least repair the turbine and generator. Ukrainian and Romanian companies were supposedly ready to repair these units, but eventually they had to cooperate with the same Horus. In November, the unit had a failure in the cooling system, which led to the damage of the recently repaired generator. The cherry on the cake was the overpriced purchase of electricity from Transdniestria ($73, which is 15% more than under the previous contract). On the one hand, our experts have no complaints about buying electricity in Romania, even if the price is too high: 415 euros instead of the previous 90. So, since late October Moldova fully switched to purchases from Romania. The necessary volumes were found, contracts for emergency supplies, as well as with individual suppliers were signed, and daily purchases were made on the exchange. However, the harsh reality is that by the end of November Romania itself faced power shortages, and the desire to politically pressurize the Cuciurgan TPP threatened a total blackout both in Moldova and in the neighboring regions of Ukraine. Was there any sense for Andrei Spinu and Oleg Serebrian to demand from the left bank representatives to keep the former price of 66 dollars, even if it meant damages to the country’s infrastructure, to avoid WatchDog’s criticism today? Personally I doubt. In all these aspects, the authorities, willingly or at the behest of their external partners, made political decisions that not only contradicted economic logic, but also involved serious risks to energy security. We can say that our country is still lucky. The authorities’ energy experiments had no fatal consequences, and the financial costs are the minimum price to pay. It is clear that there is no way to shift responsibility for these costs onto external partners, but pinning it all on one deputy prime minister is also a dubious idea. All PAS authorities are accountable for their political decisions. Looking for internal enemies instead of taking mature and responsible approaches shows that PAS is repeating the mistakes of previous political projects and that it will naturally split and degrade.