The Prime Minister of the Republic of Moldova, Dorin Recean, yesterday asked the Parliament in Chisinau to declare a state of emergency in the energy sector for a period of 60 days. The decision comes against the background of the risk of ceasing the transit of Russian natural gas through Ukraine at the end of the year, a measure that could generate a severe crisis both in the Transnistrian region and in the entire Republic of Moldova.
• Urgent measures for energy security
The government in Chisinau approved on Wednesday the report of the Commission for Exceptional Situations, which emphasizes the need to declare a state of emergency, starting from December 16, 2024. This decision aims to prepare the country for the possible negative effects of the interruption of natural gas supplies by Gazprom, a situation further complicated by repeated attacks on the energy infrastructure in Ukraine. Prime Minister Dorin Recean says that the problem is not necessarily the cessation of Russian gas transit through Ukrainian territory, because there are routes for delivering natural gas to the Republic of Moldova in general and to the left bank of the Dniester in particular. He suggests that it is rather an intention of the state monopoly Gazprom, which has been used by the Kremlin more than once to serve political purposes. "The problem is not the lack of transit routes, but the possible intention of Gazprom to use gas supplies as a political instrument. If this scenario materializes, we could witness a severe humanitarian crisis, with shortages in the supply of energy resources and a decrease in the income of the population," said Prime Minister Dorin Recean.
• Implications for the Transnistrian region
The Transnistrian region, home to approximately 300,000 Moldovan citizens, depends largely on Russian natural gas for the operation of the Cuciurgan power plant. Without them, the plant will not be able to ensure the necessary production of electricity, and prices could increase significantly, both for residents on the left bank of the Dniester and for those in the rest of the country. Deputy Prime Minister for Reintegration, Oleg Serebrian, warned of an economic and social collapse in the region, in the event of an interruption of supplies. Chisinau announced that it would continue to supply gas to Transnistria, but not for free, in the event of such a scenario. Ukraine has repeatedly stated that it will not extend its gas transit agreement with Russia after it expires on December 31, increasing the risk of an interruption of Russian gas supplies to several countries in Eastern Europe, including the Republic of Moldova. Moldova received approximately 2 billion cubic meters of gas per year from Russia through Ukraine, and from 2022, Transnistria and Chisinau agreed that all Russian gas received by Moldova will go to the separatist region. Transnistria has a large power plant in Cuciurgan powered by Russian gas, and Chisinau, in turn, buys electricity from the Transnistrian region at a relatively low fixed price. Last week, Recean dismissed the Minister of Energy, Victor Parlicov, and urged state bodies responsible for energy to prepare for various scenarios, including the interruption of electricity supply from the Transnistrian power plant.
• Alternatives and vulnerabilities
The government is exploring alternative options for gas supplies, including using the TurkStream pipeline through Turkey, Bulgaria, and Romania. However, Romania's current electricity import capacity is limited to 315 MW, insufficient to cover peak demand. In addition, the Isaccea-Vulcăneşti power line, which crosses Ukraine, remains vulnerable to possible attacks on infrastructure, further complicating the situation.
• State of economic emergency in Transnistria
Meanwhile, the Transnistrian authorities have declared a "state of emergency in the economy" for 30 days, introducing measures such as rationalizing gas consumption and banning the export of energy resources. This decision comes in the context of delays and uncertainties related to Russian gas supplies.
• Outlook and risks
The risk of a major energy crisis in the Republic of Moldova is increasing as the December 31 deadline approaches, when the gas transit agreement via Ukraine expires. Although Chisinau is looking for solutions to manage the situation, the possible economic and humanitarian effects of this crisis are difficult to avoid. The Parliament's decision becomes a key point to stabilize the situation and protect the population from a difficult winter season.
• Romania's Aid
On August 31 this year, the President of the Republic of Moldova, Maia Sandu, declared, after the meeting she had with President Klaus Iohannishannis, during which they signed a declaration on cooperation with the Republic of Moldova, that "Romania plays an essential role in supporting efforts to consolidate the energy independence of the Republic of Moldova". She also added that our country is the main trading partner of the Republic of Moldova. Klaus Iohannis said that "consolidating independence on all levels remains an essential premise". Maia Sandu stated at the time of signing the declaration of cooperation: "The declaration signed today reaffirms your firm support in the face of the numerous challenges we face. Romania plays an essential role in supporting our efforts to consolidate the energy independence of the Republic of Moldova, the construction of the Isaccea - Vulcăneşti - Chişinău overhead power line is in full swing, and the works on the Suceava-Balti line will begin soon. These lines will connect the electricity network of the Republic of Moldova to the Romanian one and to the European market. Since 2021, when the Iaşi - Ungheni gas pipeline was put into operation, Moldova no longer depends on a single natural gas supplier and can ensure the consumption needs of its citizens on the right bank of the Dniester by purchasing gas on the European market.
Two-thirds of the Republic of Moldova's total gas imports in the first nine months of the year came from Romania, from the two largest producers, Petrom and Romgaz, according to data from Moldova's largest trader, Energocom. Currently, as Transgaz interactive data shows, Moldova's imports from Romania are about 3 million cubic meters daily (our country's current domestic production is over 23 million cubic meters per day).
At the beginning of November, Energocom showed in a post on its official Facebook page: "Totaling, between January and September 2024, SA Energocom purchased a total of about 4.4 million MWh (or 413,000,000 cubic meters). Three quarters of the gas was purchased from companies registered in Romania and on the Romanian stock exchange - BRM. In total, contracts were signed with 8 commercial entities from Romania, Greece, Austria, Switzerland. Regarding the sales transactions to Moldovagaz, we mention that these were awarded on the platform administered by BRM EST Moldova, the local subsidiary of the Romanian Commodity Exchange, which is also the operator of the natural gas trading platform in Chisinau. Other smaller quantities were sold to local companies, in the context that from January 1, 2025 all large consumers will be obliged to purchase gas on the free market, and during this period more and more economic agents are migrating to the BRM Est platform. (...) The weighted average price of the purchased gas was 35.25 EUR / MWh. For this purpose, money was used from the grant offered to the Republic of Moldova by the Government of Norway Nansen, from the credit of the European Bank for Reconstruction and Development (EBRD) and the company's own sources.