Moldova energy profile

The Republic of Moldova (Moldova), home to 3.6 million people with Chisinau as its capital, is situated in Eastern Europe neighbouring the north-eastern Balkans. The country covers 33 844 square kilometres (km²) and is bordered by Ukraine on the north, east and south, while the Prut River on the west defines the boundary with Romania (http://moldova.md/). The breakaway region of Transnistria, a strip of land between the Dniester River and the eastern Moldovan border with Ukraine, is recognised by three non-United Nations (UN) states only and is considered by the UN to be part of Moldova as of early 2020.

Moldova’s economy has grown moderately over the 2007‑19 period. Real gross domestic product (GDP), measured in US dollars (USD) on the basis of purchasing power parity (PPP) at 2011 prices, increased by 100% from 2002 to 2018 according to the World Bank. This growth is attributed to increased exports to EU markets and higher prices for agricultural products, although a ban on Moldovan wine imports to the Russian Federation (Russia) in 2006 and a heavy drought in 2007 severely affected the economy. Since lifting of the ban, growth has returned to the agriculture sector, which is the backbone of the economy. Moldova is, however, highly reliant on international donors and remittances from its many citizens working overseas.

Moldova’s improved economic performance reduced national poverty from 30% in 2006 to 9.6% in 2015, and extreme poverty from nearly 5% to 0.2% over the same period (https://mei.gov.md/ro/content/analiza-indicatorilor-saraciei).

Because the country lacks energy resources, it is almost wholly dependent on fossil fuel and electricity imports: only 20%1 of its energy demand was met by domestic sources in 2018. Natural gas, which serves most of its energy needs, was entirely imported from Russia via Ukraine up to the end of 2014. In August 2014 the Iasi-Ungheni gas interconnector between Romania and Moldova was commissioned, and became operational in 2015. Once at full capacity in 2020, the pipeline is expected to supply almost all the gas Moldova consumes, but not that of the Transnistria region.

The government also plans to diversify the energy mix with more renewable energy. As expansion requires significant investment in the medium and long term, progress will depend on the country’s ability to attract funds. The development of uncontrollable renewables, such as wind and solar, will be limited by the balancing capabilities of the Moldovan power system.

Moldova has been a member of the Energy Community since 2010 and signed an Association Agreement with the European Union on 27 June 2014. It therefore had until December 2017 to make its legislation conform to the EU acquis communautaire, which
is the core EU energy legislation related to electricity, oil, gas, the environment, competition, renewables, efficiency and statistics. Moldova also plans to fully synchronise its electricity network with the European Network of Transmission System Operators for Electricity (ENTSO-E) to connect to the European electricity market.

Regional energy co-operation with Caspian and Black Sea countries and the European Union follows the framework of the Baku Initiative, which aims to facilitate the progressive integration of the region’s energy markets into the EU market, as well as the transportation of substantial quantities of Caspian oil and gas towards Europe. Moldova also participates in the Eastern Partnership, a joint initiative involving the European Union, its member states and the post-Soviet states of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine; it provides a venue for discussions on trade, economic strategy and travel agreements, as well as an energy security platform. In addition, the European Neighbourhood Policy promotes bilateral co-operation between the European Union and Moldova in line with the Partnership and Co-operation Agreement, which includes energy co-operation. 

Moldova2 consumes around 4 million tonnes of oil equivalent (Mtoe) of energy per year (4.1 Mtoe in 2018), comparable to energy consumption in Luxembourg.

• Moldova’s energy self-sufficiency is very low, among the lowest in the world.
• Around 20% of its energy demand is covered by domestic production, consisting almost fully of solid biomass; total domestic energy production was 0.82 Mtoe in 2018, of which 0.79 Mtoe solid biofuels.

• Moldova needs to import most energy commodities to meet the domestic demand.
• All natural gas consumption (2.1 Mtoe, or 2.9 billion cubic metres (bcm) in 2018) is met through imports, mainly from Russia. A gas interconnector to Romania is under construction to reduce dependence on Russian gas.
• Imports cover 99% of Moldova’s oil consumption (1.0 Mtoe in 2018, of which almost 80% diesel and motor gasoline).
• All coal consumed must be imported as well (0.09 Mtoe in 2018).

• Natural gas accounts for more than half of Moldova’s total primary energy supply (53% in 2018), oil roughly a quarter (23% in 2018) and solid biomass one-fifth (19% in 2018).
• Most natural gas is used for electricity and heat generation,3 whereas oil is the most important energy source for final consumers.
• Residential sector is the largest energy consuming sector (around 1.4 Mtoe in 2018), solid biofuels covering over 50% of the sectoral consumption.
• Transport sector is the second-largest energy consumer (around 0.7 Mtoe) and the main driver in oil consumption growth.

• Renewables represent 20% of Moldova’s energy mix, consisting almost fully of solid biofuels (19% in 2018).
• 6% of electricity generation comes from renewable sources (hydro, wind, solar PV).

The Ministry of Economy and Infrastructure is in charge of developing and implementing strategies and policies related to energy, such as Moldova’s Energy Strategy 2030 (http://www.mei.gov.md).

The Ministry of Agriculture, Regional Development and Environment is responsible for developing environmental and natural resource management policies and strategies, as well as for implementing international environment treaties (http://www.madrm.gov.md).

The Energy Efficiency Agency (EEA) is the implementing agency under the national energy efficiency and renewable energy programmes. It promotes investment in energy saving and renewable energy projects, in accordance with existing government programmes (http://www.aee.md).

The Parliament is unicameral with 101 members, elected by direct universal suffrage. The Chairman (Speaker) of the Parliament, the Standing Bureau, and the standing and special committees are the central institutional elements in the legislative process (http://www.parlament.md/).

Legislation can be initiated either as draft legislation or as a legislative proposal. In both cases, it is first considered by the parliamentary standing committee to which the draft or proposal has been allocated by the Chairman. At this stage, civil society organisations may make submissions, and other standing committees, legal staff of the Parliament and the government (when it is not a government initiative) may all submit advisory notes.

The approval of legislative text results in adoption of the legislation by Parliament. Ordinary laws may be enacted by the Parliament after a first reading (although this commonly happens after a second reading), whereas organic laws may only be enacted after a minimum of two readings. Laws are then signed by the Chairman of the Parliament and sent to the President for promulgation. After promulgation, the legislation must be published in the Monitorul Oficial (the Official Gazette); only after publication does the legislation take legal effect.

Judicial authority in Moldova is exercised through the courts system, regulated by the Constitution and specific laws (http://justice.gov.md).

Moldova possesses a three-tier judicial system that is independent of the executive and legislative branches. This court system comprises the Supreme Court of Justice, the Court of Appeals and courts of first instance (trial courts). Even the activity of the Constitutional Court is judicially based, independent of any other public authority, and obeys only the Constitution. Moldova has adopted a comprehensive strategy and implementation plan for reforming its judicial system.

The International Commercial Arbitration Court of the Chamber of Commerce and Industry of the Republic of Moldova was established in 1994 for commercial arbitration administration, with scope to settle disputes concerning foreign trade.

The National Agency for Energy Regulation (ANRE) is the single authority tasked with regulating Moldova’s energy sector, and is therefore equipped with country-wide regulatory competences in the gas, electricity, heat and oil sectors. By law, ANRE is an institution legally distinct and functionally independent from any other public entity. Its main responsibilities are licensing, tariff setting and regulation (http://www.anre.md/).

Moldova’s energy policy focuses on improving integration in regional markets, strengthening energy security, improving compliance with EU directives, increasing electricity generation capacity and promoting energy efficiency and renewable energy. The significant changes the country’s energy sector is undergoing, including institutional, market-related and physical development, are part of integration into the European energy market, as Moldova is required to harmonise its energy policy and legislation under the Energy Community Treaty. Other binding international treaties include the Energy Charter and those of the World Trade Organization.

The main energy security-related projects are the Iasi-Ungheni-Chisinau gas interconnection pipeline with Romania, and Moldova’s integration into the EU electricity market through interconnections with the Romanian electricity network. Connection of the new Iasi-Ungheni pipeline to Chisinau is likely to be achieved in 2020, and in 2013 a contract was signed with the European Union for funding of EUR 7.1 million to support the synchronous connection of the Ukrainian and Moldovan power networks with the ENTSO-E Continental Europe network by analysing potential technical, organisational and legal obstacles.

In February 2013, Moldova introduced its updated National Energy Strategy (NES) 2030, setting energy sector objectives for 2020 with an outlook to 2030. The updated NES targets are closely aligned with Energy Community Treaty requirements, even exceeding them in some cases: for instance, the Treaty’s binding target for renewables in total final consumption (TFC) is 17%, whereas the NES sets a 20% goal. The main NES targets for 2020 are:

• 20% renewable energy sources in TFC
• 10% biofuels in transport
• 10% renewables in electricity generation
• 10% energy intensity reduction
• reduce electricity transmission and distribution network losses to 11%; reduce natural gas losses by 39%; and reduce heat losses by 5 percentage points from 2009 level
• 25% reduction in greenhouse gas (GHG) emissions from the 1990 level
• 20% reduction in energy consumption in buildings from the 2009 level
• 10% rehabilitation of public building stock.

Complementing the NES are the National Energy Efficiency Action Plans (NEEAPs) 2013-15, 2016-18, 2019-21 and the National Renewable Energy Action Plan (NREAP) 2013-20. The NEEAPs and the NREAP were designed consistent with Moldova’s commitments under the Energy Community Treaty.

The National Bureau of Statistics (NBS) is the institution responsible for collecting and processing energy statistics in Moldova, and three statisticians are dedicated part-time to this task. The main source of data is the energy survey (form 1-BE), and complementary data are drawn from various administrative sources, for example from ANRE on wind energy and solar photovoltaic (PV) electricity generation.

The main energy statistics publication is the Energy Balance of the Republic of Moldova, available in Portable Document Format (PDF) in Romanian, English and Russian on the website of the NBS. It provides the full picture of Moldova’s energy situation in physical and energy units, and underlying energy data are easily accessible in Excel format in the energy statistics section of the website. The NBS also publishes data on electricity and gas prices, as well as monthly electricity and oil data.

Moldova shares energy data through five annual International Energy Agency (IEA)/Eurostat/UN Economic Commission for Europe (UNECE) joint questionnaires. In addition, since 2016 it has participated in the Joint Organisations Data Initiative (JODI) and has also been sending monthly oil and gas data to the International Energy Forum via the UN Statistics Division (UNSD).

The main users of energy data published by the NBS are the Ministry of Economy and Infrastructure, including for the Energy Strategy 2030, the Ministry of Agriculture, Regional Development and Environment (for energy modelling and long-term energy demand forecasts), the Energy Efficiency Agency (for monitoring the share of renewables in the energy mix and progress in energy efficiency), and ANRE.

A survey on end-use consumption in households was carried out in 2016 to acquire more comprehensive knowledge of residential biomass consumption. Future projects include revising the biomass time series based on survey results, and developing charts and explanatory materials to help consumers understand the energy data.