ARTICLE
28 March 2024

Moldova's Renewable Energy Landscape: Trends And Developments

GI
GRATA International

Contributor

GRATA International is a dynamically developing international law firm which provides services for projects in the countries of the former Soviet Union and Eastern Europe. More than 28 years 250 professionals in 19 countries advise major international and local firms. GRATA is recognised by Chambers & Partners, Legal 500, IFLR1000, WWL, Asialaw Profiles. GRATA is recognised by Chambers & Partners, Legal 500, IFLR1000, WWL, Asialaw Profiles.
The Republic of Moldova has a vast potential for renewable energy - one of the largest in the region, being ready to play an important role in addressing energy...
Moldova Energy and Natural Resources
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The Republic of Moldova has a vast potential for renewable energy - one of the largest in the region, being ready to play an important role in addressing energy challenges both nationally and internationally.

Key Facts:

  • Technical potential of RES: 65,029 GWh
  • Load in the system: Approximately 865 MW Maximum
  • Medium tariff for electricity: 91.5 EUR/MWh for end users at 0.4 kv
  • Annual average load in the electricity system: 500 MW
  • Sunshine: 1950-2210 hours/year
  • Percentage of 'green' energy consumed in 2019 in the Republic of Moldova: 26.8%

A conventional energy infrastructure comprises electricity-generating power plants, along with transmission and distribution systems that serve various consumers, including households, businesses, and industries. 
In such setups, energy traditionally moves in a one-way direction from the producer to the consumer, who remains unaware of the processes beyond their electrical outlets. This system operates on alternative energies that cannot be stored in large quantities, necessitating a continuous match between energy production and consumption.

However, advancements in renewable energy and digital technologies have empowered consumers to increasingly produce their own energy, particularly through solar power. This shift introduces complexity in managing energy production due to the variable nature of renewable sources, which depend on weather conditions like sunlight and wind.

The energy ecosystem encompasses generators from thermal and nuclear sources, fluctuating renewable energies, and intermittent gas supplies, alongside transportation, distribution, consumer and prosumer engagement, and energy storage solutions.

In the context of the Republic of Moldova, around 4 million MWh of electricity is consumed annually, with households accounting for nearly 45% and industrial usage for 15%. This leads to peak demands of approximately 700 MW during morning and evening hours, dropping to 180 MW at night. 
Consequently, Moldova's ability to integrate wind and solar energy is constrained by its minimum nighttime and maximum daytime consumption levels, respectively. Excess green energy production over consumption can result in energy being transferred to Romanian or Ukrainian networks, potentially at a cost or for free, depending on the circumstances. Conversely, shortages in energy production necessitate costly imports from neighboring countries.

With an increased reliance on renewable sources, the demand for traditional energy decreases, leading to a drop in market prices for conventional energy. However, during high consumption periods with insufficient renewable energy, prices soar due to the need for balancing energy from costlier sources.
The emphasis on balancing the energy system has shifted from solely relying on power plants to also managing consumer and prosumer behavior. Effective consumption management and energy storage can facilitate greater integration of renewable energy into the grid. On June 1, 2022, Moldova adopted European market regulations for energy balancing to address unplanned production and consumption fluctuations, primarily compensating through expensive, unplanned energy exchanges with neighboring countries.

Moldova's renewable energy law, supported by the Energy Community and the European Union, introduces mechanisms such as net metering and net billing for photovoltaic (PV) system users, aiming for a fairer system where prosumers are compensated appropriately for the energy they contribute to and consume from the grid.

The Republic of Moldova offers support mechanisms for green energy production, including net metering transitioning to net billing, feed-in tariffs, and fixed-price contracts through auctions for larger energy capacities. Despite consumption structure limitations, Moldova aims to increase its renewable energy share to 30% by 2030, with a strategic focus on reducing greenhouse gas emissions and contributing to global warming mitigation.

Top reasons to invest in Moldova RES:

  • Guaranteed Feed-in Tariffs (FiTs) for smaller projects and transparent competitive bidding procedure for bigger ones. FiTs are calculated based on weighted average cost of capital of 8.3%.
  • Fiscal incentives for investments in generation of electricity from Renewable Energy. Under power purchasing guarantees the investor is protected against any commercial risks.
  • Electricity generated by solar-PV installations, wind turbines, biogas fired power plants and biomass power plants delivered in the electric network by eligible producers will be purchased obligatory by the central electricity supplier.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
28 March 2024

Moldova's Renewable Energy Landscape: Trends And Developments

Moldova Energy and Natural Resources

Contributor

GRATA International is a dynamically developing international law firm which provides services for projects in the countries of the former Soviet Union and Eastern Europe. More than 28 years 250 professionals in 19 countries advise major international and local firms. GRATA is recognised by Chambers & Partners, Legal 500, IFLR1000, WWL, Asialaw Profiles. GRATA is recognised by Chambers & Partners, Legal 500, IFLR1000, WWL, Asialaw Profiles.
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