Can the Continued Europe’s Energy Dependence on Russia Be the Key to Moldova’s Energy Stability?

Sergiu CEBAN

Moldova is facing a situation of complete energy uncertainty amid possible cessation of gas transit through Ukraine

In just a month’s time, the first cold snap may arrive in Moldova, while the issue of energy sustainability during the winter period is still in limbo. Everything hinges on whether the interested parties will agree on the continued gas transit through Ukraine, and this is what the situation in the Moldovan energy sector largely depends on. The main problem of the modern pan-European energy sector is not so much the lack of the required volumes or delivery routes, but its sensitivity to geopolitical requirements. On the one hand, they should be constantly taken into account, and on the other hand, they should be adjusted in such a way as not to provoke a crisis and a sharp hike in energy prices with severe consequences for the economy. There are also other, politically charged factors. All this combined creates energy unpredictability across the continent. Nevertheless, the result of constant calls and real steps to reduce dependence on Russian energy resources is that Russia has been confidently ranked as Europe’s second largest gas supplier in recent months. Between April and June, the EU received about 12.7 billion cubic meters of gas from Russia, which exceeded imports from the US (12.3 billion). This is a noticeable change in the balance compared to the first quarter of 2024, when Russian supplies showed only a slight decline, while U.S. volumes dropped much more significantly. This state of affairs could not but revitalize internal European debate about the correlation between the EU’s ongoing energy nexus with Russia and its geopolitical strategy towards the latter. For many, the current volume of Russian energy imports is almost a red rag. For example, Norbert Rottgen, a German politician from the Christian Democratic Union and head of the foreign policy committee in the German Bundestag, called for a complete ban on Russian gas imports. However, loud political statements can hardly surprise anyone anymore. Yet, life imposes its own rules. The EU still needs Russian gas, especially the one flowing through the Ukrainian pipeline. Austria, Hungary and Slovakia are most dependent on it. The Kursk offensive came as a surprise to Europe’s energy markets, as it is the only major point of gas exports through Ukraine. Any imprudent action could have raised the price to record levels, but this did not happen. Gas transit through the Suja gas measuring unit continues, hence both Kyiv and Moscow are not interested in suspending the flow. Nevertheless, there is considerable concern about the prospects for Russian gas transit, especially after recent statements by the Romanian energy minister that Bucharest can no longer supply Moldova and Ukraine with electricity. Romania believes that “the idea of the European energy market is solidarity and mutual benefit, so the EU should bear some of the costs.” That is, unless Brussels sees serious arguments to allocate additional funds to maintain energy sustainability at least in Moldova, we will, in fact, be left to rely solely on ourselves once again. This brings us back to the idea that the MoldGRES electricity de facto has no alternatives, which entails risks in the event of cessation of Russian gas supplies to the left bank of the Dniester. In fact, experts have long argued that Moldova’s dependence on energy products from the Russian Federation has not gone anywhere, it was only carefully disguised, while purchases were still made only through European traders and with a corresponding markup. While it is still possible to ask Western partners for money to cover the markup, the real problem comes when electricity is physically unavailable due to shortages in neighboring Ukraine and Romania. Bucharest, by the way, covers part of its needs through imports, and in case of reselling it to us, the price will be simply unaffordable. Given the current situation, I would like to believe that we still have responsible officials who are considering various options rather than thinking about how to make money out of overpriced purchases from selfless European intermediaries. Apparently, there is an expectation that if Ukraine does not extend the contract for transit through its territory, it will be possible to use alternative routes through Turkey, even though they will have to pay a little more for it. At the same time, for some reason they keep silent about the fact that these costs may be included in the price of electricity generated by MGRES for the right bank. However, according to some reports, Moscow is in no hurry at all to book capacity for the supply of blue fuel to Transnistria via Turkish Stream and the Trans-Balkan pipeline in the reverse mode. That is, the Russians are mulling over various options that our authorities can only anxiously guess about. Well, if someone thinks that the Kremlin will hasten before the presidential elections to neutralize all the risks that may leave Moldova without electricity from 1 January 2025, it will be a very naive judgement. Nevertheless, there are certain chances that the issue of pumping gas through Ukraine will be resolved positively. Not so long ago, Vladimir Putin visited Azerbaijan, where the gas issue was one of the key topics. In fact, it took Europe several years to realize that there are simply no alternative sources to Russian ones to fully meet energy needs. But the sanctions already imposed are unlikely to be lifted in the near future. Therefore, the most realistic course of action is to simply bypass them and turn a blind eye. It is not coincidence that the European Union signals its interest in gas supplies from Azerbaijan. South Stream, as we know, has a limited capacity, and everyone realizes that there is no way to do without the Ukrainian pipe. Volodymyr Zelensky reported back in July about negotiations on gas supplies from Azerbaijan. Later, Ilham Aliyev confirmed that Ukraine and the EU had asked him to export Azerbaijani energy resources. Therefore, Baku’s involvement in Russian-European gas relations is nothing but a way to overcome sanctions. It seems that the Kremlin realizes that the Europeans will not go anywhere from the Russian “gas drugs”, as there are no other options. Besides, if a multilateral agreement is eventually reached, including to save face for European officials, then in addition to stabilizing prices and markets, it will also mean the failure of the EU sanctions policy. After all, it pursued far-reaching political goals and was not designed to be covered up with a “fig leaf” a few years later. For our politicians, this development is on the one hand a reason to relax, focusing on the parliamentary election race amid stable MGRES supplies at relatively tolerable prices. On the other hand, the extension of free gas supplies to Transnistria and the Kremlin’s smooth return to European energy hardly corresponds well with the plans of the authorities, including in the area of reintegration, which they have set for the next five years.