Policy Brief : The provisions of the EU-Moldova Association Agreement in the energy sector: gas and electricity
This policy brief is aiming at describing the key energy provisions of the Association Agreement (AA) that needs to be urgently addressed by Moldovan authorities, as well as by civil society, against the background of the peculiarities and priorities of Moldova in the energy field. A more detailed analysis of the level of transposition of Moldova’s AA commitments in the energy sector will be thoroughly evaluated in a separate study that will be published soon.
The energy profile of Moldova is impacted by insignificant reserves of solid fuels, oil, natural gas and poor interconnections for supply of alternative energy sources. Moldova is 96% dependent on energy imports in particular from Russia (natural gas) and Ukraine, as well as supplies from Transnistrian region (electricity). The energy infrastructure is another important challenge. Approximately 75% of the energy sector equipment is outdated, which contributes to energy losses. 2030 Energy Strategy is addressing these issues with medium and long-term solutions. The membership of Moldova in the Energy Community Treaty offers a sustainable framework to ensure the development of the energy sector in Moldova.
During 2012-2015, Moldova has made significant efforts to create grounds for diversification of natural gas and electricity alternative supply. The Iasi-Ungheni gas pipeline interconnection was finalised. However, in order to benefit from its full capacity it is important to implement the final phase of the project both in Moldova and Romania until 2018. The electricity interconnection projects with Romania as well were prioritised, aiming to be finalised by mid 2019. This will allow for asynchronous integration of Moldova with the European transport network system operator for electricity (ENTSO-E). The total budget of these mega energy projects and the implementation priorities were agreed in the Memorandum of Understanding signed by the Governments of Moldova and Romania in May 2015. In this regard, it will be important to capitalise the promised support of the European Union and European financial institutions (EBRD/EIB).
Unfortunately, this remains a key challenge, as the respective financial support is now practically frozen and could be renewed only if Moldova progresses in the implementation of the AA. According to the AA, Moldova committed to transpose 43 EU Directives and Regulations relevant to the energy sector. While 12 Directives and regulations were transposed before Moldova even started provisional application of the Association Agreement in September 2014, based on its commitments in the Energy Community. Meanwhile, the deadlines for the transposition of the remaining EU directives and regulations largely expire in early 2017. However, as a short-term priority for Moldova should be the implementation of the relevant natural gas and electricity commitments as the AA deadlines expired already. This is why we address these particular commitments herewith. Hence, we will refer to the content of the new draft laws on natural gas and on electricity transposing the so-called third energy package of the EU. We urge the Parliament to adopt these laws in due time without delay.
Consequently, in order to avoid delays in the implementation of the strategic energy interconnection projects that are crucial for Moldova’s energy security, the primary tasks of the Moldovan Government should be: (1) to ensure a progress in the transposition into national legislation with EU regulations for natural gas and electricity by adoption of the new laws and secondary legislation; (2) to prepare the technical projects for the energy interconnections with the EU based on approved the feasibility studies and (3) to resume talks with Moldova’s development partners notably Romania, the European Commission, EIB and EBRD in order to resume the necessary financial support.