Page 107 - SE Outlook Regions 2023

3.6.4 Energy & power

The war in Ukraine reset Moldova’s energy system. Figuratively and, in
several instances, literally – when the Russian missiles caused
blackouts in the country that depends 70-90% on the electricity supplied
by separatist Transnistria and its neighbours Ukraine and Romania.

End-user energy prices surged several times during the year as the
country had to resort to expensive providers of natural gas and
electricity. On the upside, the country developed a national energy
trader (Energocom) that is increasingly active and expects to bring
natural gas from Azerbaijan while purchasing electricity from the
regional market. Infrastructure projects (particularly a more stable,
direct interconnector with Romania and the consolidation of the national
transport grid) are key for this, though.

Moldova lacks not only generation capacities, but also reliable
interconnectors with Romania – which might facilitate access to other
European electricity markets. Electricity remains a problem to be
addressed in the future, while short-term solutions are sketched based
on the circumstances.

As of the end of 2022, Moldova was 60% reliant on Transnistria for
electricity (under a deal involving the transfer of the Russian gas to the
separatists) and 10% on Romania (where the electricity is expensive on
the spot market and scarce under bilateral contracts). But Moldova
remains sensitive to problems in Ukraine, which intermediates the
imports from Romania. Furthermore, Moldova’s electricity consumption
is very low now and should increase significantly in the long term along
with its economic activity and standard of living.

Natural gas supplies are Moldova’s key problem. Its full reliance on
Russian gas made Moldova vulnerable to political threats. The buffer
accumulated during 2022 allowed it to pass all the gas delivered by
Gazprom (less than half the amounts contracted) to Transnistria. But it’s
clear that Moldova as a whole (Transnistria included) can’t survive in
the medium term without at least 2bn cubic metres of gas per year and
the imports along the Turkey-Bulgaria-Romania route are of key
importance for giving up Russian gas. Romania can provide some
emergency support, but it is a net gas importer as well and will remain
so at least until 2027.

Alternative solutions such as the development of green electricity
generation capacities or participation in Romania’s nuclear programme
(boosted by several partnership projects with the US) are of key
importance as well for Moldova’s energy system.

The share of energy from renewable sources in the gross final
consumption of electricity in Moldova is about 4%. But investors
complain about adverse market design. The government is working on
a new long-term strategy for the energy system, to replace the outdated

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