Constantin BOROSAN, lecturer in the Department of Energy, the Faculty of Power and Electrical Engineering, PhD student of the Doctoral School “Power and Electrical Engineering”, second year, presented the results of an extensive study on “Energy Security of the Republic of Moldova in the context of the functioning of the competitive market”, elaborated under the aegis of prof. Valentin ARION, within the Scholarship Program in the field of Public Policies of the “Soros-Moldova” Foundation.
The study aims to positively influence the decision-making process in the energy market in the Republic of Moldova and includes the following compartments: Energy policies and strategies; Regulation of the energy sector; Electricity acquisition; The energy market; Energy Security Consolidation Solutions etc.
The author draws attention to the consequences of the purchase of electricity from the Moldovan Thermoelectric Power Plant (CTM): huge debts for the natural gas accumulated by JSC “Moldovagaz” compared to SAP “Gazprom” – about 7 billion dollars, which influence the purchase of electricity by the energy companies in the East. How? CTM produces electricity from natural gas, for which it pays to the company “Tiraspoltransgaz” a tariff lower than the import price paid by “Moldovagaz”. However, “Tiraspoltransgaz” does not transfer to the “Moldovagaz” accounts the cost of natural gas delivered to consumers in the West, which led to the accumulation of a debt equivalent to over 60% of the Moldovan GDP.
Although the current contract for the delivery of natural gas signed between “Moldovagaz” and “Gazprom” provides for the possibility of transferring the debts on the account of “Tiraspoltransgaz” or the conclusion of a separate contract between “Tiraspoltransgaz” and “Gazprom”, so far no such provisions have been referred to. Hence the author’s suggestion that the subject of debt regulation accumulated by “Tiraspoltransgaz” be included on the agenda for the negotiation of the new contractual conditions for the delivery of natural gas from January 1st, 2020.
In this context, the author emphasizes that the “cessation of the transit of natural gas through Ukraine and the importation in reverse regime through the trans-Balkan gas pipeline gives the Moldovan side a strong negotiating position regarding the regulation of the debts accumulated by “Tiraspoltransgaz” in exchange for gas supplies to consumers from the East. The import of natural gas only through the trans-Balkan gas pipeline under reverse regime also endangers the reliability of the electricity supply, because the hourly capacity of the gas pipeline does not cover all the necessary consumption on both banks of the Dniester. If the electricity purchase scheme from CTM will remain the same, then “Moldovagaz”, where the Government owns 35,33 shares, will continue to accumulate debts for natural gas.”
The study includes a number of recommendations, including:
- In the short term, the problem can be solved by purchasing electricity from the Ukrainian energy market. At the same time, the negotiation of the new natural gas supply contract with “Gazprom” must provide for the separation of “Tiraspoltransgaz” debts.
- In the long term, it is necessary to finalize the projects of developing the energy infrastructure of interconnection with the energy systems and gas transportation of Romania, the organization of the competitive market in the Republic of Moldova and the association with the Ukrainian market, as well as the implementation of the projects of energy efficiency and the use of renewable energy sources.
In conclusion, the author places a special emphasis on the complete liberalization of the electricity market in the Republic of Moldova and the coupling with the Ukrainian energy market, which offers access to a greater number of bidding participants and a greater price competition on the wholesale market. The implementation of the support schemes dedicated to the electricity producers from renewable sources and the progress in the implementation of the energy efficiency projects contribute to the consolidation of the energy security of the Republic of Moldova.
The event is part of the Public Policy Fellowship project, implemented in partnership with Hertie School of Governance (Berlin, Germany), which provides for 4 young researchers to be trained and benefit from expert support for the elaboration of public policy documents on topics of national interest.