Moldova’s energy sector relies heavily on imports of electricity and gas. The country produces only about 20 percent of its annual electricity consumption from natural gas-fired combined heat and electricity power plants. Moldova has one hydropower plant, the Costesti Hydropower Plant. Moldavskaya GRES (MGRES) in the separatist region of Transnistria supplies the vast majority of the remaining 80 percent of electricity. Moldova also imports electricity from Ukraine and Romania. For years Moldova’s natural gas consumption almost exclusively relied on Russian gas imports. MGRES converts Russian gas into electricity for sale to the right bank. Starting in 2022, the country significantly reduced its reliance on Russian gas. State-owned enterprise Energocom, the country’s electricity and gas trader, actively facilitated the purchase of gas and electricity from non-Russian markets in 2022.
Moldova has committed to implement reforms embedded within the European Union’s Third Energy Package, a suite of legislation adopted in 2009 aimed at creating integrated and competitive energy markets for natural gas and electricity. As part of the reforms, Moldova restructured and partially privatized its electricity distribution network, including Premier Energy, a private company that controls 70 percent of the country’s electric distribution grid. The government plans to privatize the remaining state-owned electric distribution companies, RED Nord S.A., and the electric power supply company, FEE Nord S.A.
Moldova and Romania are cooperating to build transmission lines, which will enable Moldova to physically connect with the Romanian grid and provide access to Romanian and, by extension, other European electricity markets. In concert with Ukraine, Moldova connected synchronously to the European Network of Transmission System Operators (ENTSO-E) on March 16, 2022.
Moldova made progress toward unbundling Moldovagaz, the vertically integrated natural gas monopoly, to comply with Third Energy Package requirements. Romania’s Transgaz completed the Ungheni-Chisinau Pipeline in 2021 and took over the operation of the entire gas transmission network in September 2023. This allowed further diversification of Moldova’s gas supply. Energocom purchased the first gas supplies from alternative sources in October 2021, and reliance on Gazprom supplies diminished significantly.
The government changed legislation to enable commercial natural gas trade via “reverse flow” (both physical and virtual) through the Trans-Balkan pipeline on Moldovan territory, which could also position the country as a transit hub.
Leading Sub-Sectors
Energy efficiency; gas and electricity trade; gas storage; electricity generation; renewable energy - wind energy, solar energy, and biofuels.
Opportunities
Energy security is a priority for Moldova. International financial institutions, including the World Bank, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB) finance many projects strengthening Moldova’s energy security. Since Russia’s further invasion of Ukraine began in 2022, USAID has committed $370 million to strengthen Moldova’s energy security. Further infrastructure investment and upgrades will be required for greater connectivity between Moldova and Romania. There is also potential for support from the Development Finance Corporation.
Implementation of the Third Energy Package in the gas sector provides opportunities for natural gas supply and trade from alternative sources. Rising energy prices and Moldova’s efforts to diversify its gas and electricity sources provide an opportunity for traders to supply energy from alternative sources.
The government plans to diversify the energy mix with more renewable energy by supporting large renewable energy projects based on competitive procurement. The target is to raise the share of renewable energy sources in electricity consumption to 30% by 2030. The government plans to authorize a total of 105 MW of wind farm projects and 60 MW of solar parks by 2025. There are plans to privatize a number of energy assets in the following years, including the electricity distribution companies RED Nord S.A.
Resources
National Agency for Energy Regulation
Trade Shows at Moldexpo (http://moldexpo.md/en/))