Moldova’s renewables sector is less developed than those in regional markets and neighbouring countries. Moldova committed to a binding target of 17% of energy from renewable sources in gross final energy consumption by 2020, set by the EnC-MC decision in 2012, and 20% of the voluntary target set in the National Energy Strategy 2030. Moldova has already reached its overall share of energy from renewable sources 2020 target, taking into consideration the finding of the 1st Survey on Energy Consumption in Households, conducted in 2016. More than one-quarter of the energy consumed in the Republic of Moldova is "green" energy, this being practically totally oriented towards heating (biomass).

The unattractiveness of renewable energy is the result of the supporting mechanism introduced by the previous Law on Renewable Energy (Law No. 160 of 2007) and the previous Methodology for the Determination, Approval and Application of Tariffs for Electricity Generated from Renewable Sources and Biofuels (ANRE Decision No. 321 of 2009).

Even though primary legislation stated that policy principles were, among other things, adjustments of the national legal framework to European and international standards, promotion of renewable energy through support schemes, guarantees of renewable energy commercialisation through non-discriminatory connection to the grids, etc., the secondary legislation diminished the attractiveness of the sector. The main culprit was the provision allowing the regulator to set the tariff for green electricity according to the situation and level of feed-in tariffs (FiTs) approved in the region, in spite of other favourable basic principles promoted by the same act, such as case-to-case and cost+ approaches, the WACC factor, annual adjustment of the tariff, etc.

The situation changes with the new Law on Promotion of the Use of Energy from Renewable Sources (Law No. 10 of February 2016) and new Methodology for the determination of fixed tariffs and electricity prices produced by eligible producers from renewable energy sources (ANRE Decision No. 375 of 28.09.2018), that entered into force in March 2018 (http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=363886). The Law establishes many supporting mechanisms for different beneficiaries and projects:

Supporting mechanisms introduced by the government are market-driven and comply with the state aid legislation. They promote tenders and competition for large investors, and allow classical FiTs for small projects run by local investors and communities.

According to the EEA, at the end of 2019 about 56 MW of intermittent capacity was installed, with 16 MW produced by one hydro installation located on the Prut River at the Romanian border.

Consistent with the third Republic of Moldova Progress Report under Renewable Energy Directive 2009/28/EC, national authorities assessed a 2 262 ‑kt carbon dioxide-equivalent (CO₂-eq) reduction in GHG emissions in 2017 from increased use of renewable energy. 

Only one hydro installation is operational in Moldova, the Stinca-Costesti hydropower plant (HPP) on the Prut River, with an installed capacity of 16 MW. There is another HPP on the Dniester River dispatched by the Moldovan TSO Moldoelectrica, but its generation of 48 MW does not feed into the local market and therefore is not reflected in national energy statistics. In recent years, several local and international investors have expressed willingness to invest in small HPPs on inland rivers, but the total new capacity to be built does not exceed 1 MW, so the country’s hydro potential is still considered low.

As of the end of 2019, several small (2 kW to 500 kW) solar projects have been built or are under construction in Moldova, with a cumulative capacity of 4.0 MW. Most generating units are of the type actively promoted by the government, and are mounted on the roofs of industrial, private and public buildings. Supported by the INOGATE programme, an interactive Solar Map was also created to be made publicly available for the investor community.

Given Moldova’s geographical position and falling technology costs, solar thermal installations are becoming much more economically feasible, especially for public institutions with high water heating needs such as kindergartens and hospitals. What is more, projects of this type are supported by the donor community, which promotes the harnessing of solar thermal potential.

In order to assess the country’s overall rooftop solar PV potential, a group of countries including Moldova is being analysed within the HiQSTEP initiative launched under the Eastern Partnership. 

As of the end of 2019, several industrial wind installations with a total capacity of 35.6 MW have been built in Moldova, but the most considerable investments in this area are still to come. Although the TSO and DSOs have issued technical conditions for intermittent technologies of more than 1 gigawatt (GW) to connect to the public grid, not more than 100 MW of wind installations will be allowed until 2020 because of technical and balancing constraints, and most of them will go through the tendering procedure.

In 2016, the EEA and the Technical University of Moldova finalised their study on Moldova’s wind energy potential in line with international standards (https://moldova.awstruepower.com/). Also, a recent International Renewable Energy Agency (IRENA) report announces a potential 11.8 GW of wind power for Moldova, but the actual electrical infrastructure cannot accommodate anywhere near this level of intermittency (http://www.irena.org/DocumentDownloads/Publications/IRENA_Cost-competitive_power_potential_SEE_2017.pdf).

Because geothermal technologies (heat pumps) are still unaffordable for the average citizen, only a small number of projects have been implemented around the country. The few installations built in the public sector were financed by donors or international projects. Meanwhile businesses and individuals can switch from fossil fuels to low-potential ground heating with the help of financing from international financial institutions (IFIs) and Moldova’s Development Partners.

In addition, a rise in natural gas and electricity tariffs is raising the economic feasibility of geothermal and aerothermal options. To promote these technologies, success stories of the past five years are being publicised through a national contest, sponsored by Moldova Eco-Energetică, to reward the most notable projects, ideas and technologies contributing to sustainable development (http://mee.md).

Because Moldova is agriculturally oriented and has received support from the international community in this domain, biomass is one of the most developed renewables sectors. In the form of agricultural residues and direct and indirect wood fuel, biomass is used almost completely for heating purposes. According to Moldova’s NBS, 752 ktoe of biomass were used in 2017 (mostly by residential sector), which represents app. 10% of biomass potential. This allowed the Government to report 28% of renewable energy in gross final energy consumption target. In this context, the overall renewable target (17% -legally binding RE-related targets for Moldova that were set by the EnC-MC decision in 2012 and 20% -voluntary target set in the National Energy Strategy 2030) has already been achieved, taking into consideration the finding of the 1st Survey on Energy Consumption in Households, conducted in 2016. According to the EEA, more than 100 MW of biomass heating capacity was built in the public and residential sector in 2011‑17 with EU support, and more than 300 boiler units were installed countrywide. At the same time, more than 3 000 small boilers (20 kW to 25 kW each) were installed in the residential sector, demonstrating rising public interest in this technology, stimulated in part by higher tariffs for fossil fuel-based energy. This increased market demand for solid biofuels amounts to EUR 7 million to EUR 10 million, met by 100 local producers.

None.

Of its commitments under the Energy Community Treaty, Moldova has already transposed the most important pieces of the European legal framework on energy efficiency: Directive 2012/27/EU on Energy Efficiency, Directive 2006/32/EC on Energy Services, the directives on Energy Labelling and Eco-design, and Directive 2010/31/EU on Energy Performance of Buildings. While the labelling and eco-design frameworks are almost fully in place (the government approved secondary legislation in 2016), the greatest challenge now is to implement the Law on Energy Efficiency and the Law on Energy Performance of Buildings.

A pressing challenge for the Ministry of Economy and Infrastructure, as the central public body responsible for the energy sector, is the implementation of the Law on Energy Efficiency. Besides strengthening national energy efficiency legislation, the Ministry of Economy and Infrastructure aims to consolidate the institutional entities responsible for energy efficiency policy implementation, as stipulated in the government’s Action Programme for 2019-2021.

A detailed roadmap to address the complexity of buildings’ energy performance is to be implemented with the support of Moldova’s Development Partners. Major barriers to implementing the law are the country’s insufficient local capacities in this field, its lack of international expertise and, as a former Soviet Union country, its reliance on old construction standards and regulations.

Even though the economy’s energy intensity is three times the EU average, there have been considerable achievements, such as a 29% reduction in the energy intensity indicator for 2016-2018, from 0.45 tonnes of oil-equivalent per thousand euros (toe/EUR 1 000) to 0.32 toe/EUR 1 000. This decline was spurred by financial support for the public and residential sector by several institutions: the EBRD’s Moldovan Sustainable Energy Financing Facility (MoSEFF; http://www.moseff.org) and Moldovan Residential Energy Efficiency Financing Facility (MoREFF; http://moreeff.info/en/), the EEF, the Energy and Biomass Project (http://biomasa.aee.md) and initiatives supported by E5P (http://moldova.e5p.eu), among others.

Moldova’s energy efficiency target under the National Energy Efficiency Action Plan for 2019‑21 is an 114‑ktoe reduction in final energy consumption or 203 ktoe in primary energy by 2021. Necessary financing will be provided by Moldova’s Development Partners, IFIs, local funds and budget allocations. As one of the country’s sustainable development financiers, the government relies on market-driven instruments such as energy performance contracts, concessional and preferential loans and private investments. Project proposals and financing initiatives in energy efficiency and renewables, drafted by the Donors Community and Development Partners in conjunction with national authorities, amount to almost EUR 400 million, to be applied by 2020‑22.

Regarding climate change mitigation and Moldova’s contribution to global GHG emissions reductions, rough estimates hold that 413 ktCO₂-eq will be avoided by 2020 as a result of energy efficiency project implementation.

Under the Law on Environmental Impact Assessment (2014), approximated to Environmental Impact Assessment (EIA) Directive 2011/92/EU, an EIA is mandatory for projects considered to have significant effects on the environment and listed in Annex 1 of the law. For projects listed in Annex 2, the national authority must decide whether an EIA is needed, based on criteria in Annex 3.

Also, the Law on Strategic Environmental Assessment, approximated to the Strategic Environmental Assessment (SEA) Directive, was adopted by the Parliament. The law requires SEAs for national and local plans and programmes on land use, transportation, energy, waste, agriculture, etc.

Moldova’s updated Nationally Determined Contribution (INDC) commits it to a net GHG emissions reduction of 70% (with land use, land-use change and forestry [LULUCF]) by 2030, compared with base year 1990, instead of 64-67% as committed in NDC1. This GHG emissions reduction commitment could increase conditionally up to 88% (compared to 78% committed in NDC1), subject to a future comprehensive agreement that would also address other important issues for Moldova as well as provision of low-cost financing, technology transfer and multilateral technical co‑operation. Access to all of these measures would be appropriate to global climate change challenges.

Moldova has also approved a Low Emissions Development Strategy, which aims to reduce GHG emissions in the energy, transport, agriculture, buildings, forestry, industry and waste sectors (http://gov.md/ro/content/sedinta-guvernului-din-14-decembrie-2016-ora-1700 nr.7).

In 2005 Moldova ratified the Kyoto Protocol and a Designated National Authority (DNA) for the Clean Development Mechanism (CDM) was established, and as of mid-2014 eight CDM projects had been registered (https://cdm.unfccc.int/Projects/projsearch.html). The DNA is the Climate Change Office in the Ministry of Agriculture, Regional Development and Environment. It is responsible for promoting CDM projects, and its priorities are to reduce GHG emissions and adapt to changing climate conditions. Moldova has ratified the Paris Agreement.

The Institute of Power Engineering is unique in performing research in various fields. It has conducted research in Moldova’s energy sector for more than 50 years (http://www.ie.asm.md). Annual funding allocated by the state for research in the energy sector is around EUR 170 000, but research institutes can also obtain funding through competitive projects for young researchers, projects within state programmes, technology transfer projects, etc., which are also funded by the state. This financing does not exceed 10% to 15% of direct funding, and money earned through research projects in partnership with the private sector usually does not exceed 5% to 10%.

The research institutions provide both fundamental and applied research, with 35% of funding allocated for fundamental research and 65% for applied research. Modern computer-assisted tools are used to perform fundamental research, and obsolete equipment is employed for applied research.

A fundamental problem is the lack of funding for equipment and specialised software, for experiential research and technologies accepted in modern countries, and for remuneration. Another problem is weak industrial growth that limits the implementation of research innovations in the national economy.

Since 2007 Moldova’s research institutes have developed relationships with major European institutions that allow active participation in various European research programmes and attract additional funding, such as Horizon 2020 projects, Science and Technology Centre (STCU) projects and cross-border projects. Experts from Moldova’s research institutes are actively involved as experts in national energy efficiency projects such as MoSEFF and MoREF, and in climate change and environmental protection measures implemented by various international institutions.