Has Moldova Really “Cured” from Russian Energy Dependence?

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Despite the official bravura, it is still too early to talk about the real victory of Moldova over energy dependence on Russia
According to the Ministry of Energy, the Government is actively drafting a plan for the next heating season, as well as Moldova’s integration into the European energy market. Currently, the Ministry is studying three scenarios in the energy sector for the winter of 2023-2024. At the same time, the country is already much better prepared than last year. First of all, due to a good experience in purchasing electricity and natural gas in the EU, synchronization with European power grids, as well as access to the gas purchase auction through the common EU platform. Importantly, Victor Parlicov announced his intention to change the regulatory framework to create a real energy market and reduce dependence on Russia. Such statements by the minister come into some conflict with the recent words of Prime Minister Dorin Recean at a security conference in Bucharest that Moldova has already got rid of the Russian energy “serfdom”. As Rechan argued, if at the beginning of the war in Ukraine 100% of the energy consumed came from Russia, then today the republic is no longer dependent on supplies from there; moreover, Moldova is integrated into the European energy network both technically and commercially. Indeed, last winter, for the first time in our recent history, we managed to dispense with (direct) purchases of Russian gas. It would seem that this is the historical break with Moscow, which has used for decades energy levers for political pressure. But is it not a mixed bag? The beginning of this year evidenced several significant events in energy ties between Moldova and Russia, indicating that it is still far from setting the record straight. Now the gas “litigation” is mainly concentrated around the audit of the Moldovagaz JSC. The results of the verification by the Accounts Chamber are more likely to lead to an aggravation of relations with Gazprom, rather than bring them close to compromise. Aside from that, the government hired two foreign companies for an independent international audit, but there is not even the slightest hint so far that the results of this work will see the light of day. We can assume that the authorities, whatever the results of the audit, do not intend to pay their debts to Gazprom. At first glance, such a decision could result in lengthy investment proceedings in national and international courts. However, the international situation is still on the side of Chisinau, and in the current circumstances, the Russian monopolist could unlikely collect debts from Moldovagaz via international institutions. It cannot be ruled out that this enterprise is being prepared in this way for smooth bankruptcy in order to nationalize assets and restore state control over the national gas infrastructure and facilities. This is necessary not only to put an end to the issue of getting rid of Russian gas dependence, but also to get the opportunity to deliver blue fuel from alternative sources and share part of state assets with Romanian or Western investors. Fortunately, the Moldovan consumer enjoys no lack of interest: the other day, the Romanian Minister of Energy said that Bucharest wants to supply Moldova with electricity and natural gas “entirely and completely”. As you know, Russian gas is currently supplied only to the left bank of the Dniester for the production of electricity. However, it is clear that such a supply chain can be interrupted at any time, either by the decision of Chisinau, or Kyiv or Moscow. Especially considering that the Ukrainian infrastructure lies in the unstable area and is under constant risk. Therefore, the main task of our Ministry of Energy remains to ensure the required amount of gas in force majeure scenarios. According to experts, this year Europe will receive less Russian gas than in 2022, which will force European companies to increase imports of liquefied natural gas again. According to some calculations, the deficit of blue fuel in the European market in 2023 will be about 30 billion cubic meters. Meanwhile, European countries will have to compete for LNG with Asia, with its constant increase in demand for energy. Given these and other reasons, the next winter may be harder than the previous period and cause energy crises in some of the European most vulnerable regions. The ongoing import of electricity from the left bank is of particular importance in the matter of “cure” from Russian energy dependence. As last autumn showed, if we are already able to purchase blue fuel from alternative sources, it is almost impossible to do without cheap electricity from the Kuchurgan Power Plant consuming Russian energy carriers, until development of the appropriate technical conditions and infrastructure. The authorities’ activities in the energy sector are also mainly explained by the autumn local elections. Therefore, during the summer, the government, together with the parliamentary majority, will do everything possible trying to reduce the tariff burden on the population and business, if not by lowering the purchase price, then certainly by external grants and loans. This is evidenced by recent government agreements that Moldova will receive a grant from the United States to strengthen energy security and reimburse the cost of purchasing electricity. The new aid provides for an additional USD 220 million as a gratuitous contribution under the agreement to strengthen Moldova’s energy security. In addition, separate budgetary support is envisaged, which will provide reimbursement for the purchase of electricity from suppliers in Ukraine and ENTSO-E countries from September 2022 to March 2023. It turns out that in the second half of the year the main challenge for our authorities will be finding a way out of a situation where the EU will simultaneously try to reduce the profits of Russian energy monopolies and at the same time prevent a shortage of energy resources in Europe due to high demand for global markets. The energy security of Moldova, unfortunately, is not among the priority tasks of Brussels, so today there is no particular confidence that our country will be 100% provided with energy sources of non-Russian origin. Thus, all the bravura and encouraging statements of the authorities about the victory over energy dependence on Moscow, alas, do not have any solid foundation for the time being. The situation is still very unpredictable, which the Kremlin will certainly take advantage of, especially in the run-up to the upcoming election cycles.