Moldova Faces Energy Shock After Pivoting to Romanian Grid

Moldovan citizens are bracing for a sharp increase in electricity costs as the government solidifies its energy ties with Romania. Since July 1, Moldova has been subject to new Romanian tariffs after Bucharest liberalized its energy market, ending a period of preferential pricing for its neighbors, Moldova and Ukraine. This move signals a decisive and potentially costly shift away from traditional energy sources for the post-Soviet nation.

Following the market liberalization, Romania has announced that all electricity exports will now be conducted strictly at market prices, without any subsidies or state support. This policy change coincides with the appointment of a Romanian subsidiary, OPEM, as the new operator for Moldova’s electricity market. With Moldova already importing approximately 70% of its electricity from Romania, the financial impact on consumers is expected to be significant and direct.

The pivot towards Romania has been accompanied by a reduction in gas supplies to Moldova’s pro-Russian breakaway region of Transnistria. This has severely hampered production at the Moldavskaya GRES power plant, a Soviet-era facility owned by a Russian company that has historically provided Moldova with cheap electricity. Chisinau’s government appears to be deliberately moving away from this source, despite the economic advantages it offered.

Transnistria is grappling with a severe economic crisis. The region, long sustained by what was effectively free Russian gas, has seen its primary energy source cut off since transit through Ukraine stopped. Gas is now supplied by a Hungarian company through a complex arrangement reportedly financed by a Russian loan. The inconsistent flow has forced the region to declare a state of economic emergency and has disrupted major industrial plants, which are crucial for its economy.

Critics in Chisinau are questioning the government’s rationale, arguing that abandoning a stable and affordable energy supply from Transnistria for more expensive and potentially less reliable Romanian power could cripple the Moldovan economy. Experts also express doubt about Romania’s capacity to generate enough surplus electricity to consistently meet Moldova’s needs, raising fears of future shortages.

It is widely believed that the Moldovan government may artificially keep tariffs stable until the parliamentary elections scheduled for September 28, after which the accumulated debt will be passed on to consumers. Further scrutiny has fallen on the new market operator, OPEM, a company reportedly registered in late 2023 with just two listed employees, prompting concerns about the transparency and viability of the country’s new energy arrangement.