Joint Meeting of the EU and Moldova

Joint meeting of the EU and Moldova

Domestic Advisory Groups

17 October 2016

Proposals for further development of the renewable energy sector in the Republic of Moldova

Drafted by Vitas Mačiulis, member of the EESC

1.Conclusions and recommendations

1.1. In the recent years, Moldova made a significant leap forward in the development of the renewable energy, which paves the direct way to the energy independence of the country:

• First of all – National Renewable Energy Action Plan was adopted by the Government on 27 December 2013 where the issue of renewable energy is approached strategically, with the establishment of long-term goals and targets.
• Secondly – Law on Promotion of Energy from Renewable Sources was adopted in February 2016. It is a great pull towards the creation of clear framework for the development of renewable energy projects.
• Thirdly – Moldova Energy Efficiency Agency (MEEA) was established in 2012 as the administrative body, responsible for the implementation of state policies in creating the preconditions for improving sectors of energy efficiency and renewable energy.
• In addition, concrete targets were set for the future, which are the same as adopted across the EU: 20% of consumed energy should come from renewable energy, of which 10% in the transport sector and 27% in heating and cooling sector.

1.2. In order to increase the energy independence of Moldova, it is necessary to put all efforts towards reaching the set aims and targets as well as creating the favourable legal, economic and technical conditions for the further development of renewable energy sector, as it can contribute to diversification of the sources of energy supply, development of rural areas and agriculture. Therefore, the following recommendations should be duly taken into consideration:

• Streamline the procedures of receiving the necessary legal permissions to construct additional generation capacities and connect them to existing electricity and heating networks;
• Promote the establishment of enterprises oriented at constructing and installing equipment for renewable energy, thus creating additional jobs;
• Promote the expansion of medium-scale (up to 20 MW) cogeneration plants operating on biofuel and waste;
• Promote wider usage of solar thermal instalments to produce hot water in healthcare institutions, kindergartens and households;
• Create favourable conditions for the development of small-scale energy infrastructure, stimulate the emergence of producing consumers by widely applying the EU-like promotion instruments as net-metering, establishment cooperatives of small-scale consumers etc.;
• Promote the initiatives, which would allow the economic agents to cover their individual heating and electricity needs by usage of small-scale biofuel plants;
• Lower the administrative and technical barriers for the small-scale producers;
• Create the conditions for increasing the urban energy efficiency by introducing the Energy Service Companies (ESCO) model, which is popular in the EU countries;
• Attract the civil society and business community more actively in terms of monitoring the spending of the public and external funds on renewable projects as to make this process more transparent and easily accessible;
• Duly recommend the education institutions to actively develop renewable energy study programmes, organize training courses and seminars on the topic of renewable energy for the municipality employees dealing with renewable energy in order to better understand the newest technological developments and opportunities.
• Promote research and development in area of renewable energy to prepare proper recommendations for usage of RES in specific country environment.

1.3. Civil societies must be widely involved in the decision making processes on energy by:

• Establishing or reconstructing the suitable premises, which would allow to clearly show the possibilities of the renewable energy for household consumers;
• Creating suitable conditions for citizens, students and youth to visit such sites thus promoting their interest in green energy and the issues of preserving the planet;
• Providing investment support to needy citizens in order to reduce the energy poverty by helping them to install the renewable energy systems therefore allowing to cover heating and electricity needs with significantly lower costs.

2. Background of the renewable energy situation in Moldova

2.1. The Republic of Moldova is almost entirely dependent on imported fuel. It is estimated that Moldova imports around 96% of needed energy, which first and foremost leads to high energy prices.[1] Low level of usage of renewables (solar, wind, hydropower, and biomass) is considered as significant energy challenges.

2.2. Considering the dependence of the country on foreign energy sources, the issue of the security of energy supply becomes one of the key motivators to adopt and implement renewable energy strategies. Currently this field receives increased public and governmental attention. Social and economic benefits of renewable energy, such as the establishment of new industrial subjects with favourable export perspectives, positive structural effects on regional economies and the creation of jobs are the further areas of motivation, supporting the development of renewables. In addition, increasing efforts to integrate as much as possible with the EU has a positive impact on the future expansion of renewable energy in Moldova.

2.3. In 2010 Moldova gained the participant status of Energy Community - the international organization with a clear aim of extending the EU energy market to third countries, thus expanding the scope of EU neighbours with same legal regulations in the energy sector. As Energy Community operates on the basis of legally binding framework, it has placed an obligation on Moldova to set a plan for the development of different energy fields, including renewable energy, through the transposition of EU energy acquis in the form of energy-related Directives. For example, in 2012 Moldova committed to ainitial binding target of 17% of energy from the renewable sources in gross final energy consumption by 2020, compared with 11,9% in 2009.[2] Later on, Moldova didset itself even more ambitious targets ( see p.3.3.).

2.4.By 2014 Moldova was considered being right on track towards reaching its 2020 target, as it already managed to accumulate more than 14,9% share of energy from the renewable sources. Therefore, it could be presumed that adoption of EU practices of setting concrete future targets (through the Energy Community) contributes to the positive development of Moldova’s renewable energy sector.

2.5. However,numerous legal, administrative and technical barriers still exist and thus prevent the active promotion of the renewable energy sector. An unclear methodology for determining the renewable energy price, unclear financial relations between the network and renewable energy producers, technical barriers that network is creating to the new energy producers have to decreased or even eliminated.[3]

3. National Renewable Energy action plan

3.1. National Renewable energy action plan of the Republic of Moldova for 2013 – 2020, adopted by the government at 27 December 2013 has a significant impact on the transformation of Moldavian energy sector according to the tendency of 21st century. Through the Energy Strategy adopted in 2007, Moldova was for the first time approaching the use or RES as a reliable alternative to compensate for the critical lack of other resources and import from unpredictable sources. First Renewable energy law adopted at 2007 played an important role, as it obliged National Energy Regulatory Agency to implement regulated tariff system for each type of RES.

3.2. National RES action plan sets new tasks for the development of renewables in the country, which are harmonized with the EU obligations. According to this plan, the main issues of state policies in RES field are:

• Adjustment of the national legislative framework to the rules and standards of the EU;
• Promotion of energy generation from renewable sources, as well as increase of energy efficiency and energy savings through the application of support schemes and measures compliant with the national legislation;
• Ensuring social and territorial cohesion;
• Priority network access for electricity from renewables.

3.3. Main objectives of the following policy are:

• Diversification of indigenous primary energy resources;
• Achieving at least 20% share from renewables in the gross final consumption of energy by 2020;
• Achieving at least 10% share from renewables in the final energy consumption in transport by 2020;
• Achieving at least 27% share from renewables in heating and cooling sector by 2020;
• Promoting close cooperation among central, regional and local public administration authorities;
• Promoting and encouraging energy efficiency, energy savings, cogeneration use and district heating and cooling;
• Encouraging the international scientific and technical collaboration and implementation of international projects in the renewable energy field;
• Ensuring communication and public awareness in the field of energy from renewable sources.

4. Renewable Energy priorities for 2016 – 2017

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[1]Ana Ciofu and Igor Plamedeala (AITT), Olga Popa and Sergiu Luchian (ODIMM), Energy Sector in the Republic of Moldova, 2014.

[2] Annual Implementation Report 2015/2016, Energy Community Secretariat, 2016 September 01

[3] Sergiu Ungureanu, Manager of LECB Moldova UNDP, CCO Ministry of Environment, 2013.