From Russia to Europe: When to Expect Moldova’s Energy Transition

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The Government of Dorin Recean follows the policy of strengthening Moldova’s independence from Russian energy resources. However, poorly predicted risks can negative all attempts at any moment and push the country back to the Soviet regional energy configuration.
In early April, Dorin Recean met with the Deputy Director of the Energy Community Secretariat, Dirk Buschle, to discuss the diversification of electricity and gas sources for Moldova, the transition to green energy, attracting investments in this sector and the full integration of the Moldovan energy market into the European area. The head of government spoke about measures to successfully achieve the energy transition and an ambitious plan to achieve zero emissions by 2030. Dorin Rechan has really improved his competence in the energy sector in recent years. Most likely, he was involved in concluding another, already six-month electricity purchase contract with Tiraspol. Its price has decreased slightly, which finally made it possible to reduce the tariff for the end consumer. It is interesting that the agreement term is until October 1, the start date of the gas industry year. This may indicate that from this date Moscow already has plans to adjust its requirements or even suspend the contract. Despite the main threat of breaking the contractual relationship with Gazprom is the debt liabilities of the right bank, our authorities hold off completing the audit. The two international audit companies from Norway and the UK have not received payment for their work so far. Therefore, it is clear that probably no one would rush auditors to draft the audit results. So our government is still considering the option of completely cutting off gas supplies from the Russian Federation, which will inevitably lead to a serious energy, social and economic crisis on the left bank of the Dniester. At the same time, according to officials, Moldova is (so far) interested in maintaining the agreement between the Moldovagaz and the Russian monopoly precisely in order to ensure energy stability. It must be admitted that we still do not have a guaranteed alternative to Russian gas, and the current scheme for generating electricity and supplying the left bank with free energy removes a significant burden from the country’s budget. In fact, Moldovan complete energy independence from Russia is scheduled for two years, primarily after commissioning the Vulcanesti-Chisinau pipeline. In addition, before the end of the year, we aim to become full members of ENTSO-E (European Network of Transmission System Operators) and implement the EU Third Energy Package in terms of unbundling operators in the electricity and natural gas markets. New legal circumstances can both expand the national options and complicate negotiations with Moscow. It may happen that, even having political will, both parties would fail in concluding another contract as a matter of law. Despite the adjustments (construction of a parallel 600 MW power plant is no longer technically and economically feasible), the Vulcanesti Pipeline Project seems to be very promising, which, due to political and geographical features (crossing partly Ukraine and Gagauzia), most likely, will become a source of several diversifying capacities. The main task for the next few years is to develop a comprehensive relationship with Romania in order to become an integral part of ENTSO-E, independent in terms of energy supplies, also from Ukraine. For this, it is also planned to build an overhead power line Suceava (Romania) - Balti (Moldova), as well as to expand the Suceava power plant by constructing a new 400 kV generating capacity in Balti. Experts and the media see particular intrigue in the plans of the Ministry of Energy to partially declassify volumes, prices and sources of natural gas purchases in past winter. Many interesting details of energy sector, when former Deputy Prime Minister Andrei Spinu was in charge of it, are expected to be published. He has been visibly nervous lately and seems to be warning with loud accusations fellow party members and other forces pursuing particular aims with regard to the former official. By the way, Moldovagaz also initiated a corporate investigation, since the Russians seem to have gained access to information about the purchases of blue fuel this winter, and the way they are going to dispose of this information remains unknown. We cannot rule out that this will become a reason for a kind of response, for example, litigation. However, it is already known that in December 2022 we made trial imports of natural gas from Greece via the Greece-Bulgaria Interconnector from the Trans-Adriatic Pipeline, which in turn is the European part of the Southern Gas Corridor from Azerbaijan. Despite that Ukraine has resumed electricity exports to Moldova and the EU due to overcapacity, the other day Energocom again purchased small volumes of gas in Greece and electricity in Bulgaria in a pilot mode. Apparently, Moldova is testing the logistical possibilities of delivering energy resources outside the domestic and neighboring markets in order to get access to distant alternative sources. An analysis of the national energy sector leads to the conclusion that the Ministry of Energy has begun to actively diversify energy supplies to Moldova and work out transit for Ukraine through our territory. The ongoing crisis in relations with Gazprom prompted the authorities last year to take a decisive step towards breaking the longstanding energy balance in Moldova. In fact, the republic used past winter volumes of gas purchased in advance. Another question is the purchase method and origin of this gas. But, one way or another, the new government will continue the policy of strengthening energy independence, with this experience behind. On the other hand, the global energy markets is still greatly unstable. Therefore, all efforts to move away from traditional energy supplies can become futile at any moment due to many poorly predictable circumstances that can push Moldova back into the Procrustean bed of the Soviet regional energy configuration. At the same time, the current ruling regime can hardly count on any prospects for European integration without fundamental changes in the energy sector, which in our case is closely intertwined with domestic and foreign policy.