Energy Crisis Recedes: What’s Next?

Sergiu CEBAN

The crisis has destroyed the financial and energy symbiosis which was both one of the linking elements between the two banks of the Dniester, ensuring their interdependence, and also a significant factor in the country’s reintegration. That’s very inopportune ahead of the upcoming negotiations on the geopolitical future of our region

As we expected a week ago, the acute energy crisis has receded after all. At least, until February 10. But we can already say that tension and uncertainty are still in the air. Therefore, we cannot rule out sudden changes and new complications that could destroy the established fragile balance. The vulnerability of the current situation is clear to everyone. Obviously, with the usual way of gas imports to Moldova no longer in place, finding an alternative and reliable way of energy supply in a few weeks is, to put it mildly, a challenging task. Even for Brussels and Moscow. What we have so far. The right bank received a small grant, which allowed to partially relieve tension in Transnistria and to soften the tariffs for electricity purchased for the second month from Romania. The EU emergency aid, according to preliminary calculations, will keep tariffs at pre-crisis levels for the next two months, unless the climate factor intervenes. In case of low temperatures, consumption may increase, and then emergency volumes of electricity will be needed at two or even three times the cost. Thus, the absence of a long-term contract for electricity purchases and the maintenance of the current daily capacity reservation on the Romanian exchange clearly do not look like a stable state of affairs. Neutralization of Moscow’s “energy blackmail” is probably a necessary and even very pleasant thing for some, but the fact remains that in the short term Moldova will be under constant pressure from external factors and will depend on the generating capacities of the neighboring country. It is not difficult to guess how local and especially foreign businesses will react to such investment conditions. Of course, most experts observed the January events also through the lens of reintegration. Many saw in the breakdown of the long-standing energy-economic status quo not only a problem, but also a chance to turn the situation in their interests. But, as it turned out, it was not enough to just talk about it with solemn faces. It was necessary to prepare for this crisis in advance, to prepare contingency options, including prompt supply of “humanitarian gas” to the left bank from Chisinau, and not from Brussels. As a result, judging by the reactions of ordinary Transnistrian residents and the comments of the Tiraspol elites, the main political beneficiaries of the resumption of gas supply were the leaders of the region and the European Union. This is all you need to know about how the country’s reintegration is organized. The central authorities frankly squandered the most favorable moment presented by fate to reach out to their citizens on the left bank. Regrettably, we still do not know how to use soft power beyond the Dniester. As a result, we continue to live with unstable imports from Romania via a high-voltage line, which still passes through the MGRES and can be affected by Russian strikes on Ukraine at any moment. Towards the end of the heating season, when the internal generation at CHPs decreases, the issue of power shortages will once again loom large. Apparently, the government is again pinning its main hopes on the EU and its even bigger credit injections into the budget. In other words, having got rid of the Russian one, we become fully dependent on Brussels. From a political point of view, this may be favorable, but such a model clearly has nothing to do with the sovereignty and sustainability of the state energy sector. Transnistria, for all the emotional exhilaration of getting out of the month-long toughest situation will also have to face complex socio-economic challenges. Until February10, they will receive free gas purchased with a grant from the European Union, and then, as expected, supplies will be arranged on European exchanges at the expense of a loan from the Russian Federation. The allocated volumes will only allow to restore the work of small and medium-sized businesses. At the same time, the local budget is likely to remain for some time without the main sources of revenues - from Moldova Steel Works (idle) and from MGRES (without supplies to the right bank). The authorities hardly know anything about Russia’s lending to the left-bank administration. This makes them, in a sense, silent observers and significantly narrows the space for political maneuver. On the one hand, Tiraspol has already voiced that under the new circumstances the tariff policy will be forced to change. On the other hand, it cannot be ruled out that Moscow will follow the path of Brussels and in addition to supplying the region with working capital for the purchase of gas, will allocate money to ease utility payments. This will allow it to further strengthen its position in the region and end the narrative that having left it to fend for itself. The worst thing is that by not taking advantage of the favorable situation, Chisinau actually ceded its mission to save Transnistria to the Kremlin. As a result, the Russian Federation only strengthened its status, including for the local elites. Moreover, by agreeing to alternative gas supplies to the left bank through European (Hungarian) traders, our authorities essentially exempted Tiraspol from the problem that may arise next year if the contract between Gazprom and Moldovagaz is terminated. Of course, we should not belittle the EU role in ending, let us say, the most dangerous phase of the energy crisis. Obviously, Brussels is not interested in prolonging Moldova’s current precarious position in terms of energy supply. Therefore, perhaps, European officials will try to agree with Kyiv on a limited transit of blue fuel, especially taking into account that Hungary and Slovakia demand it. By the way, the European media is already writing about behind-the-scenes negotiations on resuming the bulk of pipeline supplies from Russia, while the Ukrainian authorities have agreed to think about transporting Azerbaijani gas. How the logistics of Russian energy resources will be formed or restored is not so important anymore. In any case, Chisinau and Tiraspol have entered a relatively new reality. And the important result is that Moscow managed to destroy the financial and energy symbiosis, which was both one of the connecting elements between the two banks of the Dniester, ensuring their interdependence, and also a strong factor of reintegration. And this does not work in Moldova’s favor before the forthcoming big negotiations on the geopolitical fate of our regional space.