In a message on the start of accession negotiations between the European Union and Moldova on June 25th 2024, the European Commission president, Ursula von der Leyen, emphasized that “together, we can forge a larger, more dynamic, and forward-looking Europe.” However, she besides cautioned that the “journey [of accession] will be rigorous and demanding [and] there are no shortcuts.” This reflects the long-term imagination of a European and prosperous Moldova, championed by president Maia Sandu, who has implemented crucial reforms during her tenure. Yet, this pro-European imagination will be tested twice on October 20th. Moldova will hold both presidential elections and a referendum on EU membership, which could enshrine European integration into its constitution.
These elections uncover a country at a crossroads. Maia Sandu’s pro-European imagination faces challenges from opponents promising economical shortcuts through closer ties with Moscow. These ideas are frequently masked as a multivectoral abroad policy, like that of Alexandr Stoianoglo, endorsed by the erstwhile governing party, the organization of Socialists of Moldova. Sandu is besides facing openly pro-Russian opponents, specified as Renato Usatii, leader of the “Our Party”, and Irina Vlah, erstwhile politician of the Gagauz region, whose population voted in 2014 overwhelmingly against EU integration and threatened to secede. Below this surface of abroad policy choices is simply a profound choice between long-term prosperity and independency which comes with the essential reforms, or a return to the way of corruption, lawlessness and seemingly inexpensive energy resources, that have cemented the country’s dependence on the Kremlin.
Figure 1: economical and Demographic Trends in Moldova. Source: Own production based on the planet Bank’s data.
Figure 2: organization Integrity in Moldova. Source: Own production in based on the planet Justice task and Transparency global data.
Moldova has struggled demographically and economically throughout its contemporary history, as shown in Figure 1. It has consistently had 1 of the highest remittance shares in GDP globally, a reflection of weak institutions that earned it the title of “Europe’s poorest nation”. Although fresh improvements in organization metrics are promising and the quality of Moldovan institutions is now closer to its EU regional peers – Poland and Romania, as shown in Figure 2 – it will take time for these changes to translate into strong economical growth. Poland’s experience illustrates this well: following crucial organization reforms in the 1990s, its GDP per capita (PPP) grew from 48 per cent of the EU average in 2000 to 79 per cent in 2022. However, Moldova’s journey has been marred by scandals, specified as the 2014 bank robbery, where 1 billion US dollars – 12 per cent of its GDP – was stolen by pro-Russian oligarch Ilan Shor. Convicted in 2017, Shor fled to Israel and later Russia, where he now orchestrates, with the aid of Russian safety services, anti-European campaigns to destabilize Moldova. As such, his political organization was described as “created out of corruption and for corruption [which] is simply a threat to the constitutional order and safety of the state”. Unsurprisingly, Moldova’s 2023 National safety strategy besides names Russia, together with its function in systemic corruption, an existential threat.
Moldova’s breakaway region, Transnistria, is the prime example of Russia’s interference tactics through fostering systemic corruption. In this region, Moscow provides the Cuciurgan Power Plant which accounts for about 80 per cent of Moldova’s electricity supply with natural gas free of charge. The profits from selling this electricity to another parts of Moldova are a crucial part of Transnistria’s budget. Additionally, the region benefits from dumping prices for resources which come with incentives for corruption and arbitrage. However, as the saying goes, “there is no free lunch”, the Kremlin tracks these price differences as debt and uses them as leverage for geopolitical, economical or political concessions. Gazprom claims Moldova’s debt is as advanced as $709 million, a figure the Moldovan government disputes.
Nowhere is the choice between Europe and Moscow more evident than in Moldova’s energy sector. By promising inexpensive natural gas, Moscow offers pro-Russian actors a powerful run tool that besides undermines reforms by fuelling corruption. This fast fix appeals to both the population and oligarchs, with the erstwhile enjoying low energy prices in the short word whilst the second proceed stripping the country of its assets, with predictable socio-economic consequences in the long run. Therefore, to break free from the Kremlin’s grip and prosecute a pro-European future, the stakes in these elections will have major repercussions on the energy sector, where the European Union’s function will be pivotal.
Moldova’s energy landscape: infrastructure and import routes
In 2023 Moldova’s energy consumption was about 4 million tonnes of oil equivalent (Mtoe), compared to 93 Mtoe in Ukraine and 35 Mtoe in Romania. The average for EU countries was 114 Mtoe, with a full consumption of 5,700 Mtoe across all 27 associate states. Per capita, Moldova consumed 1.5 toe, compared to Ukraine’s 2.2 toe, Romania’s 1.8 toe, and the EU average of 3.1 toe per person. Moldova’s energy intensity, measuring energy consumption per unit of GDP, was 267 toe/million USD, lower than Ukraine’s 581 but higher than Romania’s 117 and the EU average of 96. Thus, despite inefficiencies, Moldova’s energy consumption is low compared to its regional peers, mostly due to its tiny population and limited industrialization. In 2023 the only EU country with a akin level of energy consumption was Luxembourg at 4.1 Mtoe.
Natural gas has historically made up the majority of Moldova’s primary energy consumption, as shown by the full Energy Supply (TES) in Figure 3. TES represents all energy produced or imported into a country, minus exports and storage, reflecting the energy needed to supply end users. After natural gas, petroleum products and biofuels, mostly solid biomass like wood, make up the next largest shares. Coal and renewable energy sources, specified as hydropower, wind, and solar, contribute only marginally to Moldova’s energy mix. The country produces just 20 per cent of the primary energy it consumes, mostly from solid biomass, meaning most another primary energy sources are imported. any of these primary sources are converted into fuels or electricity for final consumption, as indicated by the full Final Consumption (TFC) in Figure 3. TFC represents the energy utilized by individuals and businesses for activities specified as heating, lighting, and powering vehicles. Importantly, the conversion from primary to secondary energy sources involves energy losses, leading to differences between TES and TFC. In Moldova, petroleum products utilized in transportation account for the largest share of final energy consumption, followed by natural gas and solid biomass, utilized for cooking and heating.
Figure 3: Evolution of Energy Supply and Consumption in Moldova, 2000 -2022. Source: Own production in based on the global Energy Agency data.
Electricity is the 4th largest category of final energy consumption in Moldova, yet it remains crucial for any modern economy, as most industrial processes, from manufacturing to data services, depend heavy on it. Interruptions in electricity supply lead to crucial economical losses, disrupting essential infrastructure like communication systems. Reliable electricity is thus the backbone of a modern industrial economy. Moldova’s electricity generation is mostly undiversified, relying mostly on natural gas, with tiny contributions from hydropower, coal, and renewable sources like wind and solar. While reliance on natural gas for electricity generation is not inherently problematic, an analysis of Moldova’s energy infrastructure and its import routes reveals the risks this poses for its energy security, defined as the ability of a country to guarantee reliable and uninterrupted access to energy at affordable prices.
As an energy system, Moldova is almost entirely reliant on imports. The only origin of primary energy produced domestically is biomass, typically wood utilized for heating and cooking. With no refineries, Moldova imports all petroleum products mostly via its railroad network. These routes connect Romania, Ukraine and Moldova’s only maritime port, Giurgiulești, located on the Danube River with access to the Black Sea, to oil retention facilities with a full capacity of 150,000 mł, as shown in Figure 4. All of Moldova’s natural gas is besides imported. Historically, it came from Russia via pipelines entering from Ukraine, 1 in the north and 3 in the east, entering Transnistria. Since 2015 Moldova has had a natural gas way from Romania through the Iasi-Ungheni interconnector although, due to method constraints, it allows for transporting much little natural gas than the another routes. Moldova lacks liquefied natural gas (LNG) terminals, making it incapable to import natural gas in this form.
Figure 4: Map of Energy Infrastructure in Moldova as of 2024. Source: Own production based on the OpenStreetMap dataset.
Moldova’s natural gas imports from Romania and Ukraine can meet most of the request on the territory controlled by Chișinău. However, the devil lies in the details, as the separatist region of Transnistria consumes the majority of Moldova’s imported gas, primarily at the Cuciurgan Power Plant, which supplies 80 per cent of the country’s electricity. The region controlled by Chișinău generates very small electricity. Moldova besides has transmission lines connecting it to Ukraine and Romania. Most of its imported electricity comes from Ukraine, whose grid operates in sync with Moldova’s. In contrast, connections to Romania face transmission limitations due to the fact that Romania’s grid, part of the European Network of Transmission strategy Operators for Electricity (ENTSO-E), is not synchronized with Moldova’s, though efforts are underway to accomplish full synchronization.
Energy safety implications
Moldova represents a stark example of energy insecurity. Practically landlocked, it boasts an energy-inefficient economy which depends on imports for over 80 per cent of its energy needs, with home production limited to biomass. This dense reliance on imports makes Moldova’s energy strategy inherently susceptible to external shocks and price volatility. The severity of this insecurity depends on the relations with suppliers. For example, akin to Moldova, natural gas is the primary fuel for heating and power generation in the fresh England region of the United States, where natural gas prices, peculiarly at Boston’s Algonquin point, are highly volatile due to the fact that the region relies entirely on imports. However, the key difference for energy safety implications is that while fresh England can import natural gas from reliable sources, specified as neighboring US states, Canada or internationally via LNG, Moldova remains reliant on natural gas from Russia, a country openly hostile to its pro-western ambitions. Compounding this issue is Moldova’s reliance on electricity from the Cuciurgan Power Plant. The plant runs on heavy subsidized Russian natural gas creating artificially low prices that make alternatives, like natural gas imports from Ukraine or Romania, uncompetitive, giving Russia crucial leverage over Moldova through energy blackmail.
Indeed, Moscow did not hesitate to usage it to realize its abroad policy objectives in Moldova. In October 2021, Russia engineered an energy crisis to undermine public support for the recently elected pro-European government of president Maia Sandu, which planned gas sector reforms. The crisis began erstwhile Gazprom, Russia’s state-owned gas supplier, demanded a crucial price increase – from $550 to $790 per 1,000 cubic meters – and reduced gas supplies, forcing Moldova to declare a state of energy emergency. This energy blackmail succeeded, as Moldova yet signed a five-year contract with Gazprom and postponed EU-driven gas reforms. A second crisis unfolded in October 2022, after Russia’s invasion of Ukraine, again targeting social support for Sandu and the government. This time, Gazprom cut gas supplies by 30 per cent, citing method issues related to Ukraine’s transit, while electricity from Transnistria’s Cuciurgan plant was besides reduced. Moldova had to buy electricity from Romania at much higher prices, though power flows from Transnistria were restored in December 2022.
As winter 2024/2025 approaches, the question remains whether Russia can again hotel to energy blackmail. While Moldova has importantly reduced its reliance on Russian gas by importing from Romania and Ukraine, it inactive depends heavy on the electricity from Cuciurgan. However, Ukraine, inactive at war with Russia, is most likely to refuse to renew its gas transit contract with Gazprom which expires in December 2024, which would consequence in disruption in natural gas flows to Transnistria this winter. In fresh weeks, Moldova has made bold moves to reduce Gazprom’s influence, including an audit that reduced Gazprom’s debt claim from 709 million to 8.6 million US dollars and transferring control of the Moldovan gas network to Romanian-owned Vestmoldtransgaz. If gas supplies to Transnistria are cut, Moldova may gotta trust on more costly electricity imports from Romania and Ukraine, marking a pivotal minute for the region’s energy independence. However, a supply disruption in Transnistria could besides trigger an energy crisis, which can be a make it or break it minute for Moldova’s energy safety and its way to reducing Russian influence.
Policy recommendations
Looking ahead, Moldova faces critical decisions, as on October 20th, 2024, the country will hold a presidential election and a referendum to enshrine EU membership in its constitution. On September 27th 2024 the Moldovan Prime Minister, Dorin Recean, said during his speech at the United Nations General Assembly: “Our European way is simply a substance of vital national interest and our strongest warrant of peace, democracy and development. On October 20th Moldova will reaffirm its European choice in a referendum to enshrine EU integration into our constitution. Russia may proceed its attempts to disrupt Moldova’s way … but we, the Moldovan people, are united in determination. Only we can choose our future.” Yet these words will stay aspirational without changes to Moldova’s energy infrastructure, which presently enables Russia to usage energy blackmail and meddle in its affairs. Structural changes in Moldova’s energy infrastructure and marketplace plan are urgently needed to break free from Russia’s influence.
An immediate solution to address Moldova’s energy vulnerability is to grow transmission capacity from Romania. This would let Moldova to import more electricity, reducing its dependence on Russian-controlled sources in Transnistria. However, this requires crucial upgrades to transmission infrastructure and full synchronization of Moldova’s grid with ENTSO-E, processes that are already underway. The challenge is that electricity from Romania is much more costly than from Transnistria, so external financial support from the EU will be crucial to keep prices affordable and keep social support for the incumbent reformist government.
A long-term solution for Moldova’s energy safety would be to diversify its electricity generation by building a large power plant on the right side of the Nistru River, in the territory controlled by Chișinău and expanding the share of renewables, specified as wind and solar. Additionally, investing in fresh natural gas import routes, either through pipelines or LNG, would further enhance energy safety by reducing Russia’s leverage. Another possible solution could be the reintegration of Transnistria, bringing the Cuciurgan plant back under Moldovan control, though this remains improbable as long as Russian troops are stationed in the breakaway region.
In theory, Moldova’s energy problems are easy to solve: the country consumes small energy compared to its regional peers and only needs respective infrastructural investments to become free from Russia’s energy blackmail. However, infrastructure projects like power plants, even if tiny in scale, require time and crucial capital. Attracting private investors necessitates a stable, low-corruption environment with strong public institutions, historically lacking in Moldova. State-led initiatives have frequently failed due to either deficiency of backing or corruption, preventing the improvement of alternate power generation and energy import routes over the past 30 years, leaving Moldova dependent on Russian-controlled energy sources.
Since 2021 Sandu and her government has made crucial strides in improving organization quality, paving the way for possible deregulation of the energy marketplace and attracting private investment in Moldova’s energy infrastructure.The same government has weathered 2 Russia-induced energy crises and now seems closer to yet breaking free from Russia’s influence; however, its success hinges not only on the result of the October 20th election and referendum but besides on crucial decisions regarding energy security, which will form Moldova’s long-term dependencies. As a net importer, Moldova must redirect its supply routes to reliable, friendly suppliers, an effort that requires long-term infrastructure investments, which are not possible without breaking the vicious cycle of corruption. Moldova seems to be on the right path, but the transition distant from Russian energy may bring economical pressure, with rising energy costs affecting the population. This could necessitate financial support from the EU to keep social backing for the reformist government. That said, Moldova represents a “low-hanging fruit” for European integration: given its comparatively low energy consumption, the cost of helping Moldova shed Russian energy influence is modest compared to the strategical benefits of securing another pro-European country in east Europe, and possibly a fresh EU member.
Jakub A. Bartoszewski is an energy marketplace expert focused on the function of infrastructure in marketplace design. He holds a Bachelor of Arts degree in Economics from fresh York University and a Master of global Affairs degree from the Bush School of Government & Public Service of Texas A&M University.
Dr. Michael Martin Richter is an Associated investigator at the investigation Centre for East European Studies at the University of Bremen and the Chief investigation Officer of the Coopernicus.pl platform. Previously, he was a investigation Fellow at the University of Surrey and Harvard University, as well as a Policy Expert at the abroad Investors Council in Latvia. He received his PhD from the University of Bremen and his MA from the College of Europe in Natolin. His investigation focuses on the political economy of east Europe, peculiarly on good governance reforms.
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