Moldova faces challenges of gas utility restructuring, energy regulator independence - Energy Community

Moldova has made progress in complying with the Energy Community's acquis, but still faces the challenges of restructuring its gas utility Moldovagaz, ensuring the independence of its energy regulator and making oil stocks, the Energy Community has said.

Moldova has managed to adopt the Third Energy Package and closed the infringement case for failure to adopt electricity distribution tariffs in 2016, thus marking significant progress in the improvement of its energy sector, the Vienna-based organisation said in its 2016 annual implementation report published on Tuesday.

Moldova completed the implementation of last year’s priorities by adopting the law on natural gas, which transposed unbundling provisions for distribution operators including the exemption for those serving less than 100.000 customers, the report said.

The deadline for the unbundling of distribution system operators is two months since the law’s adoption, but at the moment, the requirements have not been implemented for the transmission system operators and subsidiaries of Moldovagaz - Moldovatransgaz and Tiraspoltransgaz.

"Distribution system operators have been legally but not functionally unbundled", the Energy Community noted.

Moldova achieved little progress in restructuring Moldovagaz in line with the Second Energy Package and moving to the implementation of the Third Eenergy Package, taking into account the given deadline derogation.

Consequently, the country will have to rectify the few non-compliances in the law on natural gas and adopt numerous secondary acts stemming from the new law, the report said.

The Energy Community expressed its concerns over repeated violations of independence of the energy regulatory authority in Moldova, ANRE.

"The country must remedy the existing shortcomings in the regulator’s institutional independence, thus shielding it from political influence," it added.

Political interventions into the work of ANRE need to be stopped in order to develop stakeholders’ trust in the agency’s work and improve its performance as an active and independent expert body, the Energy Community stressed.

Another problem in Moldova's energy sector is its lack of legislation on emergency oil stocks, as the industry has no legal obligation to hold stockpiles of oil.

"There has been no progress with regard to achieving the priorities identified in last year’s implementation report. None of the suggested actions have been followed up," the Energy Community said.

It also said that in the near future, Moldova will need to draft an action plan for building up emergency oil stocks to 90/61 days and to prioritize the adoption of the new draft law on compulsory oil stocks.

In regards to renewable energy promotion, Moldova has made a great step forward by adopting a law on the promotion of energy from renewable, but still needs to develop the methodology for the support scheme, the report showed.

The Energy Community was established by an international law treaty in October 2005. As of July 1, 2013, the parties to the treaty are the European Union and Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine. The key aim of the organization is to extend the EU internal energy market to Southeast Europe and beyond on the basis of a legally binding framework.

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