Energy Policy, Legislative Background
Energy Policy
Energy Strategy of the Republic of Moldova until 2020
The Energy Strategy until 2020, which was approved in 2007, deals with objectives, measures and activities orientated towards a more efficient, competitive and reliable national energy industry whilst ensuring the country’s energy security, the upgrading of energy-related infrastructure, improved energy efficiency and the utilisation of renewable energy sources, and its integration into the European energy market. The fundamental principles are based on the following:
• energy supply systems orientated towards serving the needs of the customer;
• improvement of the security of energy supply;
• improvement of energy efficiency;
• increased use of renewable energy sources;
• acceptable environmental impact, on the local, regional and global (climate change) level;
• energy systems that include distributed generation sources;
• selection and implementation of energy technologies based on criteria related to energy efficiency, operational security, environmental impact ;
• reasonable tariffs and the development of a favourable investment climate;
• supporting research and development in the field of new and efficient energy technologies;
• enhancing Moldova’s role as an important transit country for electricity and gas.
National Program on Energy Conservation for the period 2003-2010
The program acknowledges that at present the energy efficiency remains at a low level. The government aims till 2010 to reduce the energy intensity by 2-3 % annually.
National Program on Ensuring Environmental Security for 2007-2015
One of the main goals of the Program is ensuring environmental security through improving the legal framework and by building up capacity. The Action Plan of the Program provides an elaboration on the production of electrical energy from renewable energy; a national action plan on diminishing GHE; and the regulation on certifying the origin of electrical energy utilised from renewable energy.
EU/Moldova Action Plan
The EU Moldova Action Plan is a political document laying out the strategic objectives of the cooperation between Moldova and the EU. Its implementation will help fulfil the provisions in the Partnership and Cooperation Agreement (PCA) and will encourage and support Moldova’s objective of further integration into European economic and social structures.
The following objectives are outlined in the Action Plan in regard to energy:
- Preparation of an updated energy policy converging towards EU energy policy objectives
- Gradual convergence towards the principles of the EU internal electricity and gas markets
- Progress regarding energy networks
- Improve transparency, reliability and safety of the gas transit network
- Progress on energy efficiency and the use of renewable energy sources
Legislative framework
A new law on Energy Efficiency is currently developed and intended to be adopted by the end of 2008.
Laws
- Law no. 160, July 12, 2007 "Renewable Energy"
- Law no. 138-XVI, June 21, 07 "On Scientific and Technological Parks and Innovation Incubators"
- Law no. 144-XVI, June 22, 07 "On Compeleting some Legal Acts" (about incentives for residents of scientific and technological parks and innovation incubators)
- Law No. 81-XV, March 18, 2004 "On Investments in Entrepreneurial Activity"
- Law no. 137-XIV, September 17, 1998 "Electricity Law"
- Law no.1525-XIII, February 19, 1998 "Energy Law"
- Law on Privatization Program 1997-1998
- Law on Amendments and Supplements to the Law, no. 233-XIV, December 23, 1998 "On Individual Privatization Project for the Electric Power Sector Enterprises"
- Law no. 336-XIV, April 1, 1999 "On Restructuring Debt of Electricity Sector Enterprises"
- Law no. 613-XIV, October 1, 1999 "On Amending Article 10 of Individual Plan for Privatization of Electricity Sector Enterprises"
- Law no. 63-XIV of June 25, 1998 "On Concept of Electricity Sector Enterprises Privatization"
- Law no. 1136-XIV July 13, 2000 "On Energy Conservation"
Government Decisions
- Prime Minister Decision No. 0919-25 as of January 04, 2006 on Creating a Coordination Council for the Use of Renewable Energy
- RM Government Decision No.899, August 25,2005 “On Creating Carbon Trade Office”
- RM Government Decision No. 713, as of June 23, 2004"On Construction of Power Plant Next to Burlaceni Village, Cahul Region"
- RM Government Decision, no. 113, February 7, 2000 "On Ensuring Conditions of Sale and Purchase of State Shares in Electricity Sector Enterprises"
- RM Government Decision, no. 520 dated June 7, 1999 "On Measures to Implement Law on Restructuring Debt of Electricity Sector Enterprises"
- RM Government Decision, no. 1059, November 13, 1997 "On Restructuring the State Company "Moldenergo"
ANRE
- Decision no. 300, June 30, 2008 "On Electricity Tariffs"
- Decision no.304, August 07, 2008 "On approving Regulation on Supply and Use of Natural Gas"
- Decision no. 298, July 30, 2008 "On Natural Gas Tariffs"
- Decision no. 299, July 30, 2008 "On tariffs for production of electric, heat energy and heat energy produced for final consumers"
- Resolution no. 101, June 24, 2003 "On Electricity Tariffs"
- Resolution no. 103, July 15, 2003 "On the amendment off ANRE Administrative Council Resolution no. 101 of June 24, 2003"
- Resolution no. 104, July 15, 2003 "On the amendment of ANRE Administrative Council Resolution no.102 of June 30, 2003"
ANRE is currently (Dec. 2008) preparing a methodology on calculating green energy tariffs and the regulation of issuing guarantees of the origin of electric energy produced from renewable energy as well as standard contracts for selling renewable energy and fuel.
Energy Related Funds and Programmes
Energy Efficiency Fund
According to the Law on Renewable Energy, the Fund should be created by the end of 2008. The Fund shall be an independent and financially autonomous legal entity, shall hold settlement accounts in banking institutions; have its stamp, etc. The Fund’s main activity shall be the management of finances, with a view of promoting the financing of energy efficiency and renewable energy in compliance with the state strategies and programs for the development of these fields.
The Fund’s financial resources shall originate from the following sources:
- financial allocations of the Government of the Republic of Moldova, at least 10 % of the Fund’s amount necessary to reach the objectives related to energy efficiency and renewable energy indicators;
- donations of physical and legal entities from the Republic of Moldova or abroad, including from international financial institutions and funds;
- financial revenues from interests to the current accounts or to the bank deposits of the Funds, as well as from the interests and commissions associated with the financial contracts signed with the Fund’s clients;
- loans or other financial instruments from banks or investors employed exclusively for the development of the Fund’s objective.
The Fund’s financial resources shall be used exclusively for:
- Financing investment projects of energy efficiency and renewables in the Republic of Moldova;
- Offering guarantees for loans allocated by financial and crediting institutions for investment projects with a view of increasing the energy efficiency and use of renewable energy sources in the Republic of Moldova;
- covering the Fund’s own costs provided in the budget approved by the Administration Board of the Fund, including the services rendered by the Fund’s administrator and Fund’s financial audits.
- Technical assistance if this is considered necessary for implementation of the eligible projects.
EBRD
ENVIROS, s.r.o., (Czech Republic) has been conducting in 2008 an Assessment of Sustainable Energy Investment Potential in Moldova. The research is financed by the Czech Republic. Based on the outcomes, EBRD will consider developing a Sustainable Energy Financing Facility (“SEFF”) for energy efficiency and renewable energy projects in Moldova. The financing facility could be in the form of targeted credit lines that will provide funds to local financial institutions for lending for investments in energy efficiency and renewable energy in the industrial, residential, and municipalities sectors.
World Bank
Energy II
This project’s specific objectives are to improve both the electricity transmission system and wholesale electricity supply and the availability and efficiency of heating in selected priority public buildings. Hence the project has two main components: electricity system upgrade and heating supply and efficiency improvement. The total project cost, including financing from the World bank and co-financing from beneficiaries and other donors, such as SIDA and USAID, is estimated at about USD 40 mln by the end of December 31, 2009 plus another USD 10 mln, additional financing by the end of December 31, 2011.
Among the project implementing organisations are the Ministry of Economy and Commerce, former Ministry of Industry and Infrastructure, the Energy Projects Implementation Unit (PIU), Moldelectra, the beneficiary and executing agency of the electricity project component, a number of municipalities, as well as Ministries of Health and Education, which are beneficiary and executing agencies of the heating component.
Biomass
The World Bank has been actively involved in a number of projects aiming to both reduce the economic dependence on the energy imports and to use the locally available resources. In May 2005 the Project “Renewable Energy from Agricultural Wastes” started. The project is financed by the World Bank, Global Environment Facility (GEF). The total project financing amounts to 2,7 mln US Dollars. The main objective of the project is to provide a foundation for a broad use of biomass in substitution for imported fossil fuels. In the course of the project development ten communities will be selected as demonstration sites, where in public buildings the coal based heating systems will be replaced by new ones based on agricultural wastes, namely baled straw. Initially small scale systems of 50 - 500 KWth will be introduced.
Furthermore, if the demonstration is successful, in the period 2006-2010 it is planned to replicate the project in 10 % to 33 % of communities carrying out public building development projects. The history behind this project is a World Bank sector study “Potential Use of Renewable Energy (Biomass) in Moldova”, financed under the Austrian Global Environment Consultant Trust Fund, conducted in 2002. The study concluded that primary and unprocessed agricultural wastes, in particular wheat straw, is the most accessible and the least utilized biomass appropriate for thermal energy production in Moldova.
