Between Moscow's Games and Chișinău's Missteps: Moldova's New Energy Crisis
There is no rest for Moldova. After the European integration won by just a 0.7% margin in a recent referendum, now an energy crisis and a possible humanitarian catastrophe loom large over the country.
Irina Percemli
A spectre is haunting Moldova — the spectre of energy crisis. Not so long ago the Western world was celebrating the win of the pro-European choice of Moldovans. The biggest boasting point of re-elected President Maia Sandu and her pro-European Party of Action and Solidarity (PAS) was that they rid the country of decades-long dependency on Russian gas. Or so we thought. Within weeks after the elections, the nation has descended into a new row of scandals.
First, it was discovered in November that Moldovan energy company Moldovagaz (51% of which is owned by the Russian gas giant Gazprom) has purchased gas on the international market at peak prices. Then, the Moldovan energy minister visited Russia to discuss gas. Within days, the gas tariff soared in Moldova, just weeks after Prime Minister Dorin Recean promised the prices would not increase this winter. This bold promise was of course made before the elections.
Whether this humiliating situation was caused by Moldovagaz’ incompetence or a deliberate strategy by Gazprom remains unknown. In any case, it was up to the Moldovan government to control the process. Not only did the Prime Minister fail to keep his promise, but he has also made some questionable decisions such as protecting the person who is responsible for the scandalous purchase.
Now, Moldova is on the brink of yet another crisis: (geo)political and socio-economic, triggered by the energy dilemma. If Russia stops pumping gas to Transnistria — a secessionist region on the left bank of the River Dniester — a grave socio-economic catastrophe can arise on both banks. Not only will people in Transnistria be unable to heat their homes, they risk leaving the right bank of the river without electricity as up to 80% comes from the Russian-owned Cuciurgan power plant. Moldovan citizens on both banks of Dniester are waiting for the new year with dread, because the contract for the transit of Russian gas through Ukraine expires on December 31, 2024.
The situation is dire, and it would be an easy reflex to condemn evil Russian blackmail as the source of every trouble. And while it certainly is true, this article aims to also point out the questionable behaviour of the current Moldovan government which seems to have no idea what it is doing.
As with the recent election and referendum results, they choose to hide behind a victim role, being highly vocal about the Russian interference but refusing to acknowledge numerous mistakes from their side. This raises questions about the current government’s competence or its political goals.
The geopolitics of gas in Moldova
Moldova was fully dependent on Russian gas before the full-scale invasion of Ukraine. The gas was flowing in from the north and east based on a long-term contract between Gazprom and Moldovagaz.
What is more, Russia was providing free gas to the left bank of the Dniester, where its troops are stationed to support the Transnistrian separatist regime. Transnistria was not paying for this gas. Since the region is recognised as part of Moldova by the international community (including Russia), the debt for gas has been accumulating on Moldova's account.
This free gas helped Transnistria maintain its regime and economy. Not only was it distributed to consumers with almost zero tariffs, but it was also funding the budget of the quasi-state, constituting salaries and pensions. Moreover, this free gas was used by the Russian-owned Cuciurgan power plant to produce electricity that was then sold to the right bank of the river, i.e. Moldova proper.
This could have continued forever, if not for the war in Ukraine. The energy crisis, which started in 2021 when Russia first reduced gas deliveries to European countries, worsened with the invasion of Ukraine. When in 2022 Russia decided to neglect the contract and further disrupt gas deliveries, Moldova was forced to start buying gas on the international market. Even though this increased the tariff for consumers, it was a great geopolitical win for the PAS government, as Moldova managed to jump off the Russian gas needle. The problem is that Transnistria still continued receiving free gas.
As the war rages on, Ukraine has been unwilling to renew the contract for gas transit through its territory, which expires at the end of 2024. Experts pointed out that this might be the only real window of opportunity in years to reintegrate Transnistria back into Moldova. At this moment, the central government might have had the greatest leverage over Transnistrian authorities. For that, however, Chișinău would have to think in advance about diversifying the electricity supply, elaborating a plan for reintegration, securing funds from Western partners, and communicating thoroughly with citizens on the left bank. Instead, Moldovan citizens are left with a betrayal visit to St Petersburg, a state of emergency declared on both banks of the river, enormous uncertainty before the winter freeze, and still no plan for reintegration.
Possible scenarios
Despite the PAS party’s assurances, the energy system of Moldova continues to remain a geopolitical game in which Russia is the most powerful player. On 16 December, news emerged that Russia had not reserved the capacities on the Trans-Balkan gas pipeline (an alternative to transit through Ukraine). The Kremlin is clearly interested in destabilising the country before the parliamentary elections of 2025.
Experts speculate a few possible scenarios. The most optimistic one is that Gazprom could still opt to reserve gas transmission capacities on a daily basis, providing just enough for minimal consumption in Transnistria but insufficient for the Cuciurgan power plant to produce electricity for the right bank. This scenario would create ongoing uncertainty and economic pressure.
In another scenario, a month-long supply cut could be implemented to force energy price increases and exacerbate tensions between the two banks of the Dniester River. This would be followed by a ‘generous’ resumption of supplies, positioning Russia as a saviour rather than the source of the crisis.
The most severe option involves Gazprom completely stopping gas supplies to the Transnistrian region, potentially triggering a humanitarian crisis. If this plays out, the Moldovan government may try to provide gas bought on the international market to Transnistria, while in exchange purchasing electricity from the Cuciurgan power plant on more favourable terms. This would be a direct concession to the separatist regime, however. And given that Transnistria is unable to pay for the gas, the burden would most likely fall on the regular consumers on the right bank. With the gas tariff soaring already, and people’s dissatisfaction with the non-transparent bills subsidising system, the situation does not look favourable for the PAS government in Moldova.
Uncertain Future and Disillusionment
The Moldovan government assured the public that the humanitarian crisis would be avoided, with Romania ready to provide cheaper electricity and other European partners willing to help. However, their questionable actions until now are raising fair doubts. A missed opportunity for launching reintegration, and the lack of a concrete step-by-step plan raise questions regarding the government’s commitment to solving the issue of Transnistria. Moreover, the gas purchase scandal and the subsequent tariff increase reflect either the government’s incompetence and inability to see into the future or, much worse, a lack of political will to solve the issue.
All this considered, it is easier to understand the disillusioned and apathetic citizens who prefer to “stay out of politics” because they lack hope for the future. Russia uses this disillusionment to manipulate the elections through figures such as the fugitive oligarch Ilan Shor. Being condemned to 15 years in prison in Moldova does not hinder him from meddling with politics from the outside.
Shor has promised gas compensations to people severely affected by the crisis, his 2,000 lei (approximately 100 EUR) matching a typical monthly pension for someone with 40 years of work experience. When faced with economic pressures like monthly utility bills of 1500 lei and government compensation of only 300 lei, it is not hard to see why voters may prioritise immediate financial relief over long-term policy considerations.
There are no easy answers to this crisis in Moldova. While the PAS party represents the biggest pro-European power with immense support from Western partners, it is important not to let geopolitical narratives stop us from scrutinising their actions. The European partners have to be more careful and consider supporting smaller and more critical pro-European forces in the country. While it is true that Moldova’s future depends heavily on Russia’s actions, the government has to be decisive, prudent and transparent in handling these looming crises. Assuming a victim role gets them nowhere; Moldova must take its destiny in its own hands.
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