IRENA RRA Moldova 2019 EN

Copyright © IRENA 2019
Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or
stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material
in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and
appropriate permissions from these third parties may need to be secured before any use of such material.
ISBN: 978-92-9260-109-6
Citation: IRENA (2019), Renewables Readiness Assessment: Republic of Moldova, International Renewable Energy Agency, Abu Dhabi.
About IRENA
The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries
in their transition to a sustainable energy future and serves as the principal platform for international co-operation,
a centre of excellence and a repository of policy, technology, resource and financial knowledge on renewable
energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including
bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development,
energy access, energy security and low-carbon economic growth and prosperity.
www.irena.org
Acknowledgements
This report was prepared by IRENA in close collaboration with the Government of the Republic of Moldova, as represented
by the Ministry of Economy and Infrastructure (MoEI). Special thanks are due to numerous other officials, especially from
the Energy Efficiency Agency, National Energy Regulatory Agency and Moldelectrica. This report benefited from the inputs
of various experts, notably including Alexandru Cosovan (European Bank for Reconstruction and Development), Gabriela
Cretu (Energy Community Secretariat), Giuseppe Grimaldi (European Bank for Reconstruction and Development), Adil
Hanif (European Bank for Reconstruction and Development), Marcela Lefter (Electra Norte), Tiago Oliveira (European
Bank for Reconstruction and Development), Denis Tumuruc (MoEI), and Nicolae Zaharia (Sinergetika). IRENA colleagues
including Abdulmalik Oricha Ali, Serkan Ata, Emanuele Bianco, Diala Hawila, Vanessa Interiano, Luis Janeiro, Sandra Lozo,
Hameed Safiullah, Jeffrey Skeer, Costanza Strinati, and Naida Taso also provided valuable guidance and input.
Contributing authors: Marcin Scigan (IRENA), Gürbüz Gönül (IRENA) and Igor Zanoaga (consultant)
Disclaimer
This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the
reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party
content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for
any consequence of use of the publication or material herein.
The information contained herein does not necessarily represent the views of the Members of IRENA. The mention of specific
companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to
others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not
imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area
or of its authorities, or concerning the delimitation of frontiers or boundaries.
RENEWABLES READINESS
ASSESSMENT
Republic of
Moldova
FOREWORD
from the Minister of
Economy and Infrastructure
Given its high dependence on imported energy resources, the Republic of Moldova is crying out for a more
intensive use of renewable energy sources. Indeed, in a country where three quarters of energy needs
are covered by imports, the consistent and feasible implementation of a renewable energy strategy has a
tremendous importance for the Republic of Moldova’s energy security.
Therefore, the main pillars and vectors of the country’s energy policies are now orienting towards the
enhancement of energy security and security of supply, the reduction of CO2 emissions, and the sustainable
development of the economy. In the context of this fundamental role for renewable energy in the transition
towards a more competitive economy and towards ensuring a more secure and sustainable energy system
– the Ministry of Economy and Infrastructure is working hard to scale-up the importance of renewable
energy in the country’s energy mix, with the support of the Energy Community Secretariat, development
partners and the International Renewable Energy Agency (IRENA).
The development of this Renewables Readiness Assessment (RRA) report perfectly coincides with the
Government of Moldova’s efforts to align its national legislation with the commitments it has made under
the Energy Community Treaty and Association Agreement, signed with the EU.
Indeed, despite recent developments in the renewable energy sector, the need for a systematic assessment
of the sector’s potential – and its bottlenecks – was still necessary. As a result of fruitful collaboration
between the Ministry of Economy and Infrastructure and IRENA, this assessment has now been conducted.
Its conclusions include the opinions of all major stakeholders, bilateral and multilateral co-operation
agencies, financial institutions and private sector representatives. This study also sets the priority areas
that the Ministry of Economy and Infrastructure would like to continue working on, while also defining
perspectives for collaboration with all the relevant stakeholders. This is of paramount importance for the
country and serves in achieving a common goal – improved energy security.
II Renewables Readiness Assessment

This RRA exercise will help a great deal and add to the major achievements reached by the national
authorities during the last decade. One of the most important of these was the adoption of the Law on the
Promotion of the Use of Energy from Renewable Sources, transposing European Directive 2009/28/EC.
This provides a set of mechanisms for raising and supporting the interests of the national and international
business community regarding renewable energy investments. The law lays down a set of rules to promote
the use of renewable energy sources in the most transparent and competitive way. A support scheme,
which is meant to increase the share of renewable energy in gross final energy consumption, will build the
path to a sustainable development of the energy sector and of the country’s economy, all to the benefit of
final consumer.
Moreover, in addition to helping the government reduce consumption, optimise costs and secure the
country’s hope for a brighter and a more energy secure future, energy efficiency and renewable sources of
energy represent some of the most promising ways in which almost half of the target set and agreed by
the Paris Agreement on Climate Change can be achieved.
Last but not least, on behalf of the Ministry of Economy and Infrastructure, I would like to express our
appreciation to IRENA, our development partners, the business community and other stakeholders for their
commitment to develop the use of renewable sources of energy in the Republic of Moldova. Their support
and technical assistance are of great importance for the benefit of our country and we look forward to a
long and fruitful future relationship.
Chiril Gaburici
Minister of Economy and Infrastructure
Republic of Moldova
Republic of Moldova III

FOREWORD
from the IRENA
Director-General
The Republic of Moldova faces growing energy challenges, including dependence on energy imports and
increasing demand for electricity to power economic growth. Imported fossil fuels already account for
more than two-thirds of primary energy supply, making the country vulnerable to rising fuel costs and
supply disruption.
On the other hand, the country has vast renewable energy potential, which remains still largely untapped.
With renewables becoming increasingly cost-competitive, policy makers have recognised them as an
important means to address the Republic of Moldova’s energy challenges and achieve a sustainable future.
Notably, the country has already met several major targets set out in its National Renewable Energy Action
Plan for 2013-2020, including the objective to cover at least 17% of gross final energy consumption with
renewables.
This Renewables Readiness Assessment (RRA) – undertaken by the International Renewable Energy
Agency (IRENA) in close co-operation with the Government of the Republic of Moldova – examines the
energy sector holistically, identifying key actions to accelerate renewable energy deployment. It underlines
short- to medium-term regulatory, financing and public-awareness issues, as well as the need for long-
term planning. Specifically, the report suggests the adoption of an ambitious renewable energy target for
2030 and ways to strengthen the government’s on-going efforts to develop the bioenergy sector. It also
proposes measures to improve the bankability of renewable energy projects and enhance the capacity of
local banks to facilitate the financing of such projects.
IV Renewables Readiness Assessment

Over 30 countries, spanning Africa, the Caribbean, Latin America, the Middle East and the Asia-Pacific
region, have undertaken the RRA process since 2011, exchanging knowledge and supporting international
co-operation to promote clean, indigenous renewable energy technologies.
I would like to thank Minister Gaburici and the staff of the Ministry of Economy and Infrastructure for their
support in preparing this study. The report was also enriched by insights from other government agencies
and a wide range of other stakeholders. IRENA looks forward to working with all partners to translate these
recommendations into practical action.
I sincerely hope these RRA findings will strengthen the Republic of Moldova’s pursuit of renewable energy
solutions as a source of economic growth, job creation and energy security. IRENA stands ready to assist in
accelerating the country’s transition to a sustainable energy future.
Adnan Z. Amin
Director-General
International Renewable Energy Agency
Republic of Moldova V
Contents
Figures VIII
Tables VIII
Boxes VIII
Executive Summary XI
1. Introduction 1
1.1 Country background 1
1.2 Renewables Readiness Assessment 2
2. Energy context 5
2.1 Energy supply and demand 5
2.2 Legal and regulatory framework 6
2.3 Energy development plans 8
2.4 Power system 9

• Power generation 10
• Grid infrastructure 12
2.5 Organisational structure of the energy sector 14
3. Renewable energy development 17

3.1 Renewable energy resources and applications 17
• Wind 20
• Bioenergy 21
• Solar 23
• Hydropower 24
• Geothermal 24
3.2 Renewable energy support mechanisms in the power sector 24
3.3 Financing of renewable energy 28
VI Renewables Readiness Assessment

4. Challenges and recommendations 31
4.1 Long-term planning 31
• Adopt a renewable energy target for 2030 32
• Conduct a production cost modelling study 32
4.2 Regulatory environment for renewable power investments 33

• Strengthen the enabling regulatory framework 33
• Streamline administrative procedures and facilitate their enforcement 34
4.3 Bioenergy 35
• Develop a strategy for the bioenergy sector 35
• Encourage the use of and further develop the online platform for biomass trade 36
• Identify an optimal pathway to increase the role of biofuels 36
4.4 Financing of renewables 37

• Improve the bankability of renewable energy projects 37
• Enhance the capacity of local banks to facilitate the financing of renewable energy
37
projects
4.5 Public awareness 38

• Develop a national communication strategy on renewable energy sources 38
References 39
Annex. Key development steps for renewable energy

projects in the Republic of Moldova 42
Republic of Moldova VII

Figures
Figure 1 Evolution of GDP and the MDL/USD exchange rate 2
Figure 2 High-Level Meeting on Renewable Energy in South East Europe, 2017 3
Figure 3 Total primary energy supply over the 2010-2017 period (ktoe) 5
Figure 4 Final energy consumption in 2017, by sector 6
Figure 5 Electricity generation in 2017, by source 6
Figure 6 Objectives of the Energy Strategy until 2030 8
Figure 7 Wholesale import electricity prices and electricity tariffs for end users 10
Figure 8 Domestic generation capacity in 2017, by fuel 11
Figure 9 Electricity network and power generation facilities in the Republic of Moldova 12
Figure 10 Potential power interconnections of the Republic of Moldova with ENTSO-E 13
Figure 11 Global levelised cost of electricity from utility-scale renewable power generation
technologies, 2010-2018 18
Figure 12 Installed renewable energy capacity, by source (as of March 2018) 19
Figure 13 Dynamics of renewable energy growth 19
Figure 14 Wind potential in the Republic of Moldova 20
Figure 15 The Solid Biofuel Laboratory at the State Agrarian University of the Republic of
Moldova 22
Figure 16 Global horizontal irradiation in the Republic of Moldova 23
Figure 17 Graphic representation of the support mechanisms in the Republic of Moldova 24
Figure 18 Key steps in a tenders’ development 26
Figure 19 Pre-qualification criteria 27
Tables
Table 1 Overview of the domestic power generation infrastructure in the Republic of Moldova 11
Table 2 Share of renewable energy in gross final energy consumption, by sector (%) 19
Table 3 RE capacity quotas under the new supporting scheme 25
Boxes
Box 1 IRENA’s South East Europe Initiative 3
Box 2 Asynchronous interconnection with Romania 13
Box 3 The business case for renewables 18
Box 4 Cost-competitive solar PV and wind potential in South East Europe 21
Box 5 Republic of Moldova Energy and Biomass Project 22
Box 6 Policy Guidelines on Competitive Selection and Support for Renewable Energy 26
VIII Renewables Readiness Assessment

Abbreviations
ANRE National Energy Regulatory Agency
CHP Combined heat and power
DFI Development finance institution
EBRD European Bank for Reconstruction and Development
ENTSO-E European Network of Transmission System Operators
EU European Union
EUR Euro
GDP Gross Domestic Product
GW Gigawatt
IPS Integrated Power System
IRENA International Renewable Energy Agency
ktoe Kilotonnes of oil equivalent
kV Kilovolt
kW Kilowatt
kWh Kilowatt-hour
MDL Moldovan lei
MW Megawatt
MWh Megawatt-hour
PPA Power Purchase Agreement
PV Photovoltaic
RRA Renewables Readiness Assessment
UNDP United Nations Development Programme
USD United States dollar
Republic of Moldova IX
Chisinau at night
Photograph: Shutterstock
X Renewables Readiness Assessment

Executive Summary
The Republic of Moldova has a vast renewable energy potential, now
poised to play an important role in addressing the country’s key
energy challenges.
The 2017 report from the International Renewable Energy Agency

(IRENA), Cost-competitive renewable power generation: Potential
across South East Europe, found that wind could provide up to
21 gigawatts (GW) of power capacity, much of which could be deployed
with the levelised cost of electricity (LCOE) below 90 EUR/ MWh – the
maximum level at which the report considers the potential to be cost-
competitive. Furthermore, solar PV could provide up to 4.5 GW of
capacity, more than 20% of which (1 GW) was considered already cost-
competitive in 2016, if attractive financial conditions were provided.
At the same time, the Republic of Moldova heavily depends on

imported natural gas, petroleum products and electricity. Almost
70% of the primary energy supply – around 2 012 ktoe of the total
2 939 ktoe – comes from imports. This is not only a huge economic
burden, but also affects the country’s energy security, making it
vulnerable to risks related to fuel supply disruption. Indeed, domestic
power production typically covers less than 20% of demand, with this
mostly provided by local, gas-fuelled CHP stations (330 MW) and
renewables-based capacity (53 MW).
Despite abundant resources, deployment of renewables has been

limited, so far, except for the use of biomass in the heating sector.
There, a decade-long effort to develop the solid biofuel sector led to
a widely taken up programme of replacing coal- and gas-fired boilers,
as well as basic stoves, with biomass heating units. These burn straw,
pellets, briquettes and firewood.
The deployment of biomass continues to provide employment

opportunities, as well. Existing government efforts are oriented
towards strengthening the newly-created solid biofuel production
industry (briquettes and pellets), which has already created about
400 new jobs in rural areas and had an assessed turnover of
USD 6 million to USD 8 million in 2017.
In recent years, the Republic of Moldova has stepped up efforts

towards developing non-biomass renewable energy sources, too.
Republic of Moldova XI
In 2012, it pledged to achieve a 17% share of Challenges and recommended actions
renewables in gross final energy consumption
by 2020 and developed the National Renewable Adopt a renewable energy target for 2030
Energy Action Plan for the 2013-2020 period.
This envisages development of solar PV and wind The current share of renewables, 27.8%, was
technologies, amongst others. It also builds on reached mainly through the revision of biomass
the first steps to advance the use of renewables consumption data for the years 2010-2016. Thus,
in the power sector, which date back to 2007. The it neither provides long-term predictability,
Renewable Energy Law (No. 160-XVI of 12.07.2007) nor reflects the country’s vision of energy
introduced tariffs for 15 years, under the “cost-plus” sector development. Although the announced
principle, with these based on the actual eligible development of 168 MW of renewables capacity
costs incurred. in the coming years has captured the interest of
several investors, this could be considered a one-
Yet, as this framework was not considered sufficient off boost for the market, rather than an element of
to attract investments in the sector, the Law on the a solid strategy.
promotion of the use of energy from renewable
sources (Law no. 10 of 26.02.2016) came into force The Ministry of Economy and Infrastructure has
in March 2018. now begun various initiatives, including discussions
within the Energy Community, with a view to
This provides necessary guarantees for agreeing on a new renewable energy target for
investments, including: non-discriminatory grid 2030. IRENA’s recently-initiated regional REmap
connection; priority dispatch; and an obligation analysis for the countries of Central and Southeast
by the central electricity supplier to purchase all- Europe, including the Republic of Moldova, can
renewable-generated electricity for 15 years. In contribute to these efforts and help identify cost-
addition, the new law is expected to lead to the effective technology options for the deployment of
construction of up to 168 MW of new capacity, renewables in the power and end-use sectors.
mainly wind and solar PV, to be supported through
administratively set feed-in tariffs and an auctions- Conduct a production cost modelling study
based mechanism. Scheduled initially for 2019,
these auctions are expected to result in a capacity As renewables are becoming an increasingly cost-
of 80 MW of wind and 25 MW of solar PV. competitive source of energy, they are poised
to play a greater role in the power system of the
The recent adoption of these new support schemes Republic of Moldova. The increased use of solar PV
for renewable electricity has contributed greatly and wind, however, would present a new challenge,
to the rising interest of the business community – as the country does not have sufficient capacity
but additional efforts are necessary to cement the to balance its generation. Thus, a production cost
foundations of the sector. modelling study would allow the determination of
any potential operational constraints that could
In this context, in 2018, the RRA elaboration result in the unavailability of sufficient power to
process was launched at the request of the meet demand. Furthermore, it could investigate
Ministry of Economy and Infrastructure of the multiple scenarios for the generation mix, including
Republic of Moldova. This provided a venue for those with higher shares of renewables.
multi-stakeholder dialogue to identify challenges
in renewable energy deployment and to suggest The results could help build confidence among
the solutions required to further exploit indigenous policy makers, system operators and investors, as
renewable energy resources, while integrating well as identify the most cost-effective option for
growing shares of solar and wind energy in the balancing the system. To support countries in the
Republic of Moldova’s power system. assessment of power systems’ flexibility, IRENA
XII Renewables Readiness Assessment

and the VTT Technical Research Centre of Finland While revising the National Renewable Energy
Ltd. developed the cost-free FlexTool. This analyses Action Plan and developing an integrated National
not only the traditional concept of flexibility Energy and Climate Plan, key aspects raised
(concerning, for example, flexible thermal and during the RRA process could be addressed. These
hydro-generation with high ramping capability and include: use of agriculture land for RE power plants;
very low start-up time), but also other innovative conduct of environmental impact assessments;
technologies, such as flexible demand, energy taxation of RE-related equipment; and issuance of
storage and sector coupling. grid connection permits.
Strengthen the enabling regulatory framework Develop a strategy for the bioenergy sector
Even though the new Law on the promotion of the With limited availability of wooden biomass, the
use of energy from renewable sources (Law no. government is advised to develop a country-wide
10 of 26.02.2016) came into effect in March 2018, programme for the use of solid biofuels.
additional pieces of legislation are required to
ensure smooth implementation of the new support This strategy should not only provide a
mechanisms. comprehensive assessment of resource
potential, but also provide clarity on the most
In particular, clarity on all requirements and suitable technology options for a wide group of
procedures to be followed needs to be ensured beneficiaries in the Republic of Moldova. Some
well in advance for both project developers and failures to match beneficiary and technology have
financial institutions. For auctions-based support turned out to be costly in the past. In this context,
scheme, essential secondary legislation needs to the government could analyse the opportunity to
be adopted, including: standard documentation revise the relevant legislation with the objective
for the tendering procedure; eligible producer of increasing the role of local public authorities
status confirmation for small renewable electricity in promoting the bioenergy sector. As the owners
producers; and grid connection, including of a vast amount of land, those authorities could
provisions referring to renewables integration. strengthen their commitment to developing the
local industry and would benefit from locally
In addition, the regulatory framework could be harvested, cost-competitive heating resources.
strengthened by implementing a transparent
methodology to calculate feed-in-tariffs and The strategy should also address the potential
ceiling prices for tenders, as well as by facilitating for cultivation and wide use of energy crops that
introduction of the net metering scheme for can be grown on marginal and/or depleted lands.
distributed renewable energy generation. While Currently, despite promising resources, the energy
legislative framework is in place, the mechanism is crop sector faces several challenges, including
not widely used, due to lack of administrative clarity. land conversion issues, land suitability and the
availability of financial support.
Streamline administrative procedures and
facilitate their enforcement Encourage the use of and further develop the
online platform for biomass trade
Co-ordination between relevant stakeholders,
including the Ministry of Economy and Lack of proper communication and exchange
Infrastructure, the Ministry of Agriculture, Regional among actors in the biomass market is perceived
Development and Environment, the Ministry of as a major challenge of the sector, even though a
Finance and the transmission system operator is dedicated online platform was recently launched.
required to clarify and simplify some procedures The increased use of the tool would facilitate market
that are perceived by the private sector as an operations and the entry of new fuel suppliers,
administrative burden and hinder the deployment including producers of agricultural residues and
of renewable energy. local public authorities. It would also enhance
Republic of Moldova XIII

fuel price competition and supply liquidity. The • Procedure for transparent assignment of the
platform should be actively promoted and further central electricity supplier.
developed to provide a bridge between biomass
producers and potential customers. It should also • Design of a procedure for the transfer of
include information on the benefits stemming all existing renewable energy producers to
from the use of bioenergy and be a repository the support system, based on a contract
of available opportunities for local consumers to for difference, which is envisaged to be
switch to this source of energy. implemented when the electricity market (day-
ahead and intra-day markets) is declared liquid
Identify an optimal pathway to increase the role by the regulator.
of biofuels
Enhance the capacity of local banks to facilitate
The country has committed to a 10% share by 2020 the financing of renewable energy projects
for renewables in the transport sector, but limited
actions have been taken, so far, to promote the use Securing funding from the financial sector for the
of liquid biofuels. investments needed to achieve a total capacity
addition of 168 MW may be a challenge, under
While there is a clear understanding among the new policy support environment. While
stakeholders of the need to ensure more large-scale renewable power plants can access
sustainable use of energy sources in this sector, the necessary financial resources from abroad –
several concerns have been identified. These through the contributions of either foreign investors
include the availability of land and infrastructure to or international financial institutions – small-scale
cultivate crops for biofuels. Therefore, the country projects are limited to funding opportunities from
needs to identify an optimal pathway towards the the local financial market. Limited knowledge
use of biofuels in transport, either by focusing on of the renewable energy sector, among local
domestic production, imports or combining these lenders appraising projects, along with insufficient
two options. understanding of the sector’s support mechanisms,
may obstruct the availability of financing.
Improve the bankability of renewable energy
projects In addition, the Republic of Moldova’s financial and
banking sector is comparatively small, with limited
The high-risk perception of renewable energy resources. Frequent problems in this sector, evidenced
projects in the Republic of Moldova affects by the collapse of three large banks in 2014, have also
substantially the cost of capital that is critical for affected the banking sector’s activities, in general.
the financial viability of those projects. Therefore,
more confidence in the market by financial Thus, for example, technical support in developing
institutions needs to be ensured to improve the bankable project proposals and in structured finance
bankability of those projects. Despite recent principles, including project finance, can increase the
efforts by the government, the current framework capacities of local commercial banks and could be
is not perceived as sufficient, as it seems to expose facilitated by international financial institutions that
potential investors to several risks. In this context, are well placed to provide such technical assistance.
the following additional actions are required:
At the same time, public capital, including that
• Enhancement of the templates of the key provided by development finance institutions,
project documentation, including power could be used to help de-risk, or lower the risk
purchase agreements (PPAs) to provide of renewable energy projects. This would, in turn,
necessary guarantees and predictability to the lower the cost of capital for renewables, via the
stakeholders involved. provision of risk mitigation instruments.
XIV Renewables Readiness Assessment

Develop a national communication strategy on
renewable energy sources
The deployment of renewables is an effective tool

to fuel economic growth, create new employment
opportunities, enhance human welfare and
contribute to a climate-safe future. IRENA’s analysis
suggests that renewable energy jobs worldwide
could rise from 10.3 million in 2017 to 23.6 million
by 2030 and 28.8 million by 2050.
A national strategy is needed to raise awareness

of renewable energy sources and their benefits
across the Republic of Moldova
As the sector is still at an early stage of development,
a national strategy is needed to raise awareness
and boost understanding of renewable energy
sources and their benefits across the Republic of
Moldova.
This strategy should address several stakeholders,

including state authorities, civil society, the banking
community and donors. It could envisage necessary
actions to: ensure proper ways to disseminate the
most up-to-date information on renewables and
the ongoing energy transition (e.g., a dedicated
website, translation of authoritative publications
into local language); and improve the curriculum
of schools and universities to reflect the growing
role of renewables. At the same time, intensified
government communication efforts on the
ongoing legislative changes would be beneficial for
stakeholders. This is especially true regarding local
financial institutions, as the relevant mechanism to
finance renewable energy projects is prepared.
Republic of Moldova XV
Wind turbine in Busauca, Rezina
XVI Renewables Readiness Assessment

Introduction1
1.1 Country background
The Republic of Moldova, with its capital city of Chisinau, is a land-

locked country situated in South-Eastern Europe and wedged between
Romania and Ukraine. The population is 3 550 852 inhabitants,
approximately 57% of whom live in rural areas, and its territory covers
an area of 33 800 square kilometres (km) (NBS, 2017).
After gaining independence on 27 August 1991, following the collapse

of the Soviet Union, the country introduced a parliamentary system
and experienced a long transition period. This was characterised by
political instability and numerous changes of government. Socio-
economic and political stability has been recently ensured, however,
and has been marked by economic growth and fruitful collaboration
with neighbouring states. Common roots and cultural similarities
between the Republic of Moldova and Romania are reflected in strong
linkages in business and commerce.
Several reforms carried out in recent years have positively impacted

the economy, including the energy sector. These reforms have
contributed to a process of gradual integration with European Union
(EU) structures, with this process remaining a priority for the country.
In 2010, the Republic of Moldova joined the Energy Community, an

international organisation that includes the EU and its neighbours.
The Energy Community aims to create an integrated pan-European
energy market. The Association Agreement signed in 2014 between
the EU and the Republic of Moldova also established a framework for
political and economic collaboration.
The country has recently been experiencing economic recovery,

following a crisis in 2014-2015 that was related largely to challenges
in the banking sector. As a consequence of this crisis, the Republic
of Moldova faced a severe devaluation of its currency, the Moldovan
lei (MDL), while the country’s Gross Domestic Product (GDP) shrank
0.5% in 2015 (Lupusor et al., 2016). Figure 1 shows the impact of the
crisis on GDP (in current USD) and the MDL/USD exchange rate. With
GDP growth of 4.5% in 2017, however, the country became the third
fastest growing economy in Europe that year, with its GDP totalling
USD 8.13 billion. This gave a per capita GDP of USD 2 290, which was
equal to 21% of the world average (WB, 2018b).
1 If not stated otherwise, data in this report is based on information relating to the right bank of the Dniester River
only. The territory of the Republic of Moldova also includes the region of Transnistria, located on the left bank of
the Dniester River, which declared independence in 1990. However, no United Nations member state recognises
its sovereignty. The report refers to electricity produced by entities located in Transnistria as “purchased from
MGRES”.
Republic of Moldova 1
Figure 1. Evolution of GDP and the MDL/USD The RRA is a country-led and consultative
exchange rate process. It provides a venue for multi-stakeholder
9.00 25 dialogue to identify challenges to renewable
energy deployment and to come up with solutions
MDL to USD exchange rate

to existing barriers. Short- and medium-term
8.00
GDP - Billions USD
20
recommendations are presented to governments to
guide the formation of new policies, or the reform
7.00 of existing ones, opening up a more enabling
environment for renewable energy. The RRA
15
6.00 also consolidates existing efforts and mobilises
resources for priority actions.
5.00 10
2013 2014 2015 2016 2017
The RRA elaboration process was launched at
MDL/USD GDP the request of the Ministry of Economy and
Source: Based on WB (2018b), NBM (2018) Infrastructure of the Republic of Moldova, in the
context of IRENA’s recently initiated South East
Economic activity is shifting progressively towards Europe Initiative (see Box 1). This coincided with
services, a sector that in 2017, accounted for nearly the government’s ongoing efforts to develop and
65% of GDP and provided employment for more finalise renewable energy-related legislation. These
than half of the workforce. The sector is driven by efforts have boosted the dialogue between policy
insurance, legal consultancy and telecommunications, makers and other interested parties, including
with foreign investment playing a substantial role. potential investors, relevant state authorities,
international financial institutions and civil society.
As the country has a moderate climate, along with
favourable climatic and soil conditions, agriculture During the first stage of the process, a background
is also an important sector, accounting for 16% of paper was prepared outlining a general overview
GDP and employing nearly 30% of the workforce, of the Moldovan energy sector, with a special focus
in 2017. The main areas of agricultural production on renewable energy. In addition, an issues paper
include vegetables, fruits, grapes, grain, sugar beets, was elaborated to identify potential barriers and
sunflower seeds, tobacco, beef and milk. bottlenecks that need to be addressed to ensure
successful deployment of renewables. The paper
In 2017, the national employment rate was 40.5% and includes the suggestions of interviewed experts.
the unemployment rate was 4.1%, although the labour
market varies greatly across the country (NBS, 2017). With the aim of validating these findings and
providing an open dialogue among a wide range of
The Republic of Moldova is also the 129th largest stakeholders, IRENA and the Ministry of Economy
export economy in the world. In 2016, the and Infrastructure organised an expert workshop
country exported USD 2.43 billion and imported on 4 June 2018. The main objectives were to discuss
USD  3.95 
billion, resulting in a negative trade challenges for renewable energy development and
balance of USD 1.52 billion. Petroleum products are to provide preliminary recommendations on the
listed high among the imported commodities, at required actions to ensure favourable conditions
USD 370 million (OEC, 2016). for the sector. The event provided the opportunity
to review global renewable energy developments,
1.2 Renewables Readiness Assessment highlight the country’s international energy
commitments and present an overview of the
The International Renewable Energy Agency national energy sector.
(IRENA) developed the Renewables Readiness
Assessment (RRA) as a tool for carrying out a Subsequently, a set of recommended actions to
comprehensive evaluation of the conditions for further advance the renewable energy sector
renewable energy deployment in a particular country. was validated by local stakeholders within the
2 Renewables Readiness Assessment

framework of the second RRA workshop that took energy efficiency and renewable energy play in
place on 15 October 2018 and was endorsed by the government’s agenda and in the national
the national owner of the process, the Ministry of strategy to ensure sustainable development.
Economy and Infrastructure. The third chapter is dedicated to the renewable
energy sector, with a focus on potential, current
This report is structured in four chapters. The applications, legal framework and financing. The
first provides introductory information on the final chapter provides a set of recommendations
country background and the RRA process. The – identified by stakeholders involved in the
second chapter highlights the main features of RRA process – that address the most important
the energy sector from both a technical and legal challenges of the renewable energy market in the
perspective. In particular, it indicates the role that Republic of Moldova.
Box 1. IRENA’s South East Europe Initiative
As part of IRENA’s increasing engagement with Figure 2. High-Level Meeting on Renewable

South East Europe, the High-Level Meeting on Energy in South East Europe, 2017
Renewable Energy in South East Europe took
place in Abu Dhabi, in January 2017.
The meeting served as a platform to discuss the

opportunities and challenges in expanding the
share of renewable energy in the region’s energy
mix. It built on the region-wide consultation
process undertaken in 2016, including a regional
consultation workshop organised in collaboration
with the Ministry of Energy of Romania, and
From left to right: H.E. Mirko Šarović, Minister of Foreign Trade and Economic
gathered representatives from the governments Relations, Bosnia and Herzegovina; Mr. Adnan Z. Amin, Director-General of IRENA;
of the region, as well as other, key regional Mr. Dominique Ristori, Director General for Energy, European Commission.
stakeholders.
The meeting resulted in the issuance of the Abu

Dhabi Communique on Accelerating the Uptake
of Renewables in South East Europe by the
Heads of Delegation in attendance, which lays
out the foundations for IRENA’s engagement
in the region. This has the goal of supporting
the creation of more conducive frameworks for
renewable energy investment. As agreed at the
meeting, the priority areas for collaboration with
IRENA shall include, amongst others: mapping
renewable energy resources; renewable energy
planning; strengthened enabling frameworks;
the socio-economic benefits of renewables;
integration of variable renewable energy sources;
and renewable energy financing.
Solar PV application in Chisinau
Photograph: Ministry of Economy and Infrastructure

Energy context
2.1 Energy supply and demand
The total primary energy supply of the Republic of Moldova

increased by an average of 1-2% annually during 2010-2017, reaching
2 939 kilotonnes of oil equivalent (ktoe) (see Figure 3) by the end
of the period. The consumption of fossil fuels (coal and natural gas)
decreased gradually during this time, while the shares of electricity
and biomass continued to grow. The country also experienced rising
use of petroleum products, increasing 17.2%, from 776 ktoe in 2010 to
937 ktoe in 2017 (NBS, 2018).
Final energy consumption in 2017 was 2 671 ktoe, equivalent to

roughly 90% of the primary energy supply2 (see Figure 4). The
residential sector consumes the largest share of final energy, at 50%,
while the industrial sector consumes just 8%, as industry does not
play a significant role in the country.
Figure 3. Total primary energy supply over the 2010-2017 period (ktoe)
2939
2796
2633 2676 2643 2669 2686 297
2624
290
267 277 292 289
285 290
764
537 698
512 650
574 584 629
776 812 937

764 785 803 829 896
962 930 885 834 850 816 837 836
116 120 116 150 95 102 75 105

2010 2011 2012 2013 2014 2015 2016 2017
Coal Solid biofuels and waste
Natural gas Electricity
Petroleum products TOTAL
Source: NBS (2018)
2 This high ratio is a result of the lack of industry that would use energy for further purposes. In countries that have
such a sector in place, those losses reach up to 20-25% of primary energy.
Figure 4. Final energy consumption in 2017, Figure 5. Electricity generation in 2017, by source
by sector
107 217
267 734
27%
17%
Local
Production
18%
55% 1%
1346
Residential Industry MGRES Local CHPs

Public / Services Transport Ukraine Local RE power plants
Agriculture
Source: NBS (2018) Source: ANRE (2018)
The Republic of Moldova is poorly endowed with plants, a non-pumped hydropower plant, and other
fossil fuel energy resources and is highly dependent small-scale renewable energy installations (see
on imported energy, in the form of natural gas, Figure 5). The rest of the electricity was imported
petroleum products and electricity. Almost 70% from Ukraine (27.2%) and purchased from MGRES
of the primary energy supply – 2 012 ktoe of the (54.8%), a power plant located in Cuciurgan (see
total 2 939 ktoe – is imported from neighbouring footnote 1).
countries. Thus, the country is vulnerable to risks
related to energy supply disruption. 2.2 Legal and regulatory framework
Nearly the entire volume of natural gas is imported In 2010, the Republic of Moldova became a full-
from the Russian Federation (from Gazprom). fledged member of the Energy Community, which
About 44% of this fuel is used to generate electricity implies a commitment to transpose core EU energy
and heat, while 28% is used in the residential sector. legislation, the acquis communautaire. Since then
Natural gas consumption has decreased over the all governmental efforts have been focused on
last decade: by 2017, it had declined by 13% of 2010 aligning the national legal framework for energy
levels, or 30% of 2005 levels (NBS, 2012 and NBS, with that of the EU. As a result, competition and
2018). Meanwhile, imports of petroleum products market principles have been introduced, especially
increased in 2017 to 809 272 tonnes, of which 70% in the natural gas and electricity fields, with the
was diesel, 21% was gasoline, and 9% was liquefied objective of unbundling vertically integrated
petroleum gas. The supply of petroleum products entities and introducing liberalised market
is more diversified, however, with imports coming principles.
mainly from Romania, the Russian Federation and
Belarus (ANRE, 2018). The above-mentioned reforms have had a positive
impact on the quality of services provided to
Of the 3.7 billion kilowatt-hours (kWh) of electricity final consumers and businesses and are expected
used in 2017, only 18% was generated domestically, to enhance the investment environment and
mainly by local combined heat and power (CHP) attractiveness of the country as a whole. Between

2016 and 2019, the Republic of Moldova improved • The Law on Energy Efficiency3 (Law No. 139 of
its ranking on the World Bank’s Getting Electricity 19.07.2018) consolidates the national institutional
Indicator from 97th to 81st and its ranking on the framework capacities for implementing energy
Doing Business Indicator from 52nd to 47th (WB, efficiency policies and developing relevant financing
2018a). mechanisms. The law also enables active participation
by third parties, as it provides a necessary
The energy legal framework includes the following framework for energy performance contracts (via
laws: energy services companies, or ESCOs) and allows
private investment in the public sector. The law
• The Law on Electricity (Law No. 107 of contains the following pillars: implementation of the
27.05.2016) ensures liberalisation of the concept of energy efficiency obligation schemes;
electricity market and transposes all principles strengthening the exemplary role of public buildings;
and rules of the EU’s Third Energy Package. introduction of the obligation for large companies to
In particular, the law clearly sets the rules perform obligatory energy audits; popularisation
for businesses in the power field, especially of sustainable public procurement; and promotion
regarding mandatory requirements in of energy performance contracts as market-driven
unbundling. In addition, this law ensures that funding instruments for energy efficiency measures.
all final customers are eligible to buy electricity
from any generator or supplier – although as • The Law on the Promotion of the Use of
yet no one has exercised the right to switch Energy from Renewable Sources (Law No.
providers. 10 of 26.02.2016), in force since March 2018,
comes with new support mechanisms for
• The Law on Natural Gas (Law No. 108 of renewable energy investments. These include:
27.05.2016) introduces similar rules for feed-in tariffs; net metering; and tenders (see
liberalisation of the natural gas market. Section 3.2). At the same time, to ensure local
In particular, it sets out the unbundling energy autonomy and achieve the goal of
requirements and envisaged derogation for the distributed energy generation, the law supports
Moldovagaz JSC and its subsidiary companies, the development of small-scale, community-
owned by Gazprom. promoted renewable energy projects. Moreover,
it provides: an obligation by the central
• The Law on Energy (Law No. 174 of 21.09.2017) electricity supplier to purchase renewable
provides a set of rules for all operators in electricity; guaranteed and non-discriminatory
the energy field, as well as for end-users of access to the grid; and priority dispatch.
energy resources. It also consolidates the
independence, authority and transparency While the government’s efforts have focused
of the National Energy Regulatory Agency mostly on the use of renewables in the power
(ANRE). The law establishes all the mechanisms sector, the law also introduces the possibility of
and principles regarding the functioning of the importing mixed petroleum products. This would
ANRE, including: appointment and mandate be as a first step in enabling the use of liquid
of a director; budget formation and related biofuels, while working towards achieving the
financial management principles; and other target of 10% renewable energy use in transport
provisions aimed at creating a healthy and by 2020. In 2018, the government launched a
favourable environment within the energy comprehensive exercise to assess the costs and
sector, focused both on attracting investment efforts related to reaching the target, in parallel
and on the supply of reliable, qualitative and with developing the required legislation on
affordable services to end-users. sustainability criteria for biofuels.
3 In addition, the Law on Labelling of Energy-related Products (Law No. 44 of 27.03.2014) and the Law on Eco-design for Energy-related Products (Law No. 151 of 17.07.2014)
aim to create an environment to enable lower energy consumption.
2.3 Energy development plans other methods, promoting energy efficiency and
renewable energy. In this context, as a Contracting
Approved in December 2018, the Moldova 2030 Party of the Energy Community, the country has
National Development Strategy establishes the transposed EU Directive 2009/28/EC on the
country’s long-term sectoral priorities and is aimed promotion of the use of energy from renewable
at enhancing the quality of citizens’ lives. The sources, which establishes a conducive framework
strategy’s goal is to bring the focus of public policy for the production and promotion of energy from
onto people’s problems, interests and aspirations. these sources. In particular, it introduces:
The document includes four pillars of sustainable • A requirement for the whole EU to reach a share
development: a sustainable and inclusive economy; of at least 20% for renewable energy in its gross
human and social capital; honest and efficient final energy consumption by 2020.
institutions; and a sound environment. In this
context, ten sustainable development goals have • An obligation for all EU members (and
been established at the national level, including: the subsequently Contracting Parties of the Energy
guaranteeing of a quality education; the ensuring of Community) to fulfil their national targets for
efficient governance; the enhancement of people’s renewables and to develop National Renewable
access to infrastructure; and the improvement of Energy Action Plans that set out ways to achieve
labour conditions. their respective commitments.
The Energy Strategy of the Republic of Moldova • A mandatory sub-target of a 10% share for
until 2030 (“The Energy Strategy”), adopted in renewables in transport, for all countries in
2012, indicates three main strategic objectives (see question, by 2020.
Figure 6).
• Sustainability criteria for biofuels to ensure
The first objective relates to enhancing the that they are produced in a sustainable and
security of energy supply, mainly by strengthening environmentally friendly manner.
interconnections with Romania and, implicitly, with
other EU countries. The most important infrastructure In 2012, within the framework of the Energy
development projects are outlined in Section 2.4. Community, the Republic of Moldova pledged to
achieve a 17% share for renewables in gross final energy
The second objective refers mainly to consumption by 2020. It also developed the National
approximation of the legal framework with the Renewable Energy Action Plan (NREAP) for the 2013-
EU acquis, which includes transposition and 2020 period that envisages a set of legal, technical
implementation of the Third Energy Package. The and analytical measures to ensure achievement of the
most important pillars of the package – ensuring the target.4 In addition, in the energy efficiency field, the
prerequisites for market liberalisation – have already National Energy Efficiency Program 2011-2020 and
been introduced to the national legal system. two National Energy Efficiency Action Plans (NEEAP
2013-2015 and 2016-2018) were elaborated, with the
The third objective aims to ensure sustainable objective of achieving a total of 167 ktoe of energy
development of the Republic of Moldova by, among savings by 2020.
Figure 6. Objectives of the Energy Strategy until 2030
Developing competitive Ensuring sustainability of the

Ensuring the security
markets and their regional energy sector and climate
of energy supply
and European integration change mitigation
4 The document is under revision – as of December 2018.

At the same time, the country remains committed These are: FCC Gas Natural Fenosa Furnizare
to the objectives of the Paris Agreement and Energie LLC (GNFFE), created as a result of the
submitted its Nationally Determined Contribution unbundling of the distribution of supply activities
in June 2017 (UNFCCC, 2017). The country has an by FCC RED Union Fenosa JSC; and JSC Furnizarea
economy-wide, unconditional target of reducing Energiei Electrice Nord, created as a result of the
national greenhouse gas emissions to 64-67% unbundling of the distribution of supply activities
below the 1990 level by 2030. The reduction by JSC RED Nord and JSC RED Nord-Vest.
commitment could be increased up to 78% below
the 1990 level, conditional on a global agreement Both companies also act as suppliers of last resort
addressing some important issues. These include in their respective supply areas. In addition, 20
low-cost financial resources, technology transfer other registered independent electricity suppliers,
and technical co-operation, accessible to all at licensed by ANRE, are entitled to provide
a scale commensurate to the challenge of global electricity at non-regulated tariffs. As of November
climate change. 2018, however, no contracts with these suppliers
had been recorded. This was due to their lack
In addition, the Ministry of Agriculture, Regional of credibility and financial strength, along with
Development and Environment has developed favourable conditions for electricity importation
two instruments of strategic planning, with from Ukraine.
associated action plans, aimed at implementing
the above-mentioned commitments: The Climate In 2017, the Republic of Moldova purchased 55% of
Change Adaptation Strategy by 2020; and the Low its electricity from MGRES7 and imported 27% from
Emission Development Strategy of the Republic of Ukraine (via JSC Energocom). These two entities
Moldova until 2030. Both documents emphasise were selected in a tender for annual procurement
the crucial role of energy efficiency and renewable of electricity organised by the Ministry of Economy
energy in reaching the climate-related goal at the and Infrastructure.
national level.
The trading of electricity in the Republic of
2.4 Power system5 Moldova is based on bilateral contracts, since
a power exchange expected to be established
Domestic power production in the Republic only after several years. The regulator is notified
of Moldova typically covers less than 20% of of contracts concluded by the above-mentioned
demand and is provided by local CHP stations, suppliers, at regulated tariffs, to ensure that all final
a non-pumped hydropower plant, and other customer demand is met at the lowest possible
small-scale renewable energy installations. In this cost. Furthermore, agreements involving electricity
context, a central electricity supplier6 was recently imports are subject to examination by ANRE and
established to purchase electricity generated by Moldelectrica, the transmission system operator, to
the above-mentioned producers and to sell it to ensure their technical feasibility. Figure 7 provides
eligible customers and suppliers. an overview of wholesale import electricity prices
and electricity tariffs for end users (low voltage).
At present, two actors dominate the market and
supply electricity, with tariffs approved by ANRE.
5 Two electricity market participants from the Transnistrian region requested and obtained licences from ANRE: MGRES for electricity production and Energokapital JSC for
supply of electricity. This allowed them to generate electricity and to supply it to Moldovan final customers.
6 Energocom has been mandated for three years, until 1 January 2021.
7 MGRES, built during 1964-1982, is the biggest generation capacity located in Transnistria. It has an installed capacity of 2 520 MW, with coal accounting for 1 600 MW, natural
gas for 500 MW and heavy fuel oil for 420 MW. It can be switched to natural gas with an available capacity of approximately 1 700 MW. It is currently owned and operated by
Inter RAO EES Corporation.
Figure 7. Wholesale import electricity prices and electricity tariffs for end users
140
121.6 126.0 124.5
120
104.8
108.2 111.7 98.0
100
USD/MWh
89.2
80 68 68
67.3 67.95
60
59.9 47
56.7 49.5
40
20
0
2010 2011 2012 2013 2014 2015 2016 2017
Wholesale import electricity prices, USD/MWh Electricity tariffs for end users (low voltage) USD/MWh
Source: Based on ANRE (2018) and ANRE (2016)
Power generation of 610 MW (MoEI, 2017). The maximum load for

both banks of the Dniester River can reach up to
Domestic power generation capacity amounts to 1 100 MW (Moldelectrica, 2018).
383 megawatts8 (MW) and is produced mainly by
gas-burning CHP plants, which account for 86% of Because of its deficient generation capacity and
total installed capacity (see Figure 8 and Table 1) peculiar power system (heat-demand driven CHP
(MoEI, 2017). plants and small-scale hydropower plants with
vulnerable hydrology) the Republic of Moldova
In the winter season, the typical load variation of has no plants that can provide primary, secondary
the Moldovan power system (the right bank of the and tertiary reserves. As a consequence, it must
Dniester River only) ranges between a minimal rely on Ukraine, for frequency control as well.
base load of 330-370 MW and a maximum peak Although MGRES could provide some additional
load of 700-760 MW, while in the summer season it reserves, such an agreement has not been
ranges from a minimum of 260 MW to a maximum concluded so far.
Solar water heaters, “Povestea” kindergarten in Nisporeni

Photograph: UNDP Moldova
8 Seven additional sugar mill-owned CHP plants with a total installed capacity of 98 MW are available for a limited period of time during the year. In addition, two power plants
are based in Transnistria: MGRES, with total installed capacity of 2 520 MW and HPP Dubasari, with an installed capacity of 48 MW.

Figure 8. Domestic generation capacity in 2017, by fuel
330
16
37
Natural Gas
Hydro (non-pumping)
Renewables (non-hydro)
Source: Based on MoEI (2017) and MoEI (2018a)
Table 1. Overview of the domestic power generation infrastructure in the Republic of Moldova
Date of Installed Available

Power plant name Fuel used
construction capacity capacity
1. Termoelectrica JSC
CET - 2 (CHP) in Chisinau 1976-1980 240 MWe 210 MWe natural gas
CET - 1 (CHP) in Chisinau 1951-1961 66 MWe 40 MWe natural gas
2. JSC CET-Nord (CHP), Balti* 1956-1970 24 MWe 24 MWe natural gas
3. Costești hydropower plant 1978 16 MW 16 MW hydro
4. Non-hydro renewable
2009-2018 37 MW 37 MW
energy power plants
Total 383 MW 327 MW
Note: *An additional capacity of 13.4 MW of internal combustion engines powered by natural gas is to be installed and commissioned at the beginning of 2019.
Source: Based on MoEI (2017) and MoEI (2018a)
Grid infrastructure At the same time, the Energy Strategy 2030
envisages plans to strengthen bidirectional
The existing Moldovan power grid infrastructure transmission connections between the IPS/UPS
was mainly built during Soviet times, as part of a and ENTSO-E systems, enabling the Republic
jointly optimised system with the Soviet Union and of Moldova to become a power transit country.
the neighbouring countries of Bulgaria, Hungary Interconnection projects with the EU internal
and Romania. After the dissolution of the Soviet power market through new power lines, as well
Union, all countries in the region redesigned their as the enhancement of internal networks, are
electricity systems. While Bulgaria, Hungary and considered essential both for supply security and
Romania decided to synchronise their networks for social welfare. In addition, interconnection
with the Western system (former UCTE, currently with the ENTSO-E system is expected to enable
ENTSO-E), the Republic of Moldova and Ukraine increased competitiveness that will lead to more
joined the Eastern system (IPS). affordable energy prices.
Despite strong links between ex-Soviet republics In this context, the Moldovan and Ukrainian
and their western neighbours, electricity exchange governments are synchronising their energy
between the two systems is only feasible in “island agendas, especially those related to the
mode”, or via expensive back-to-back converter interconnection of their national power systems
stations. As the smallest country in the region, the with the ENTSO-E grid. In this regard, in June
Republic of Moldova was affected significantly by 2017, the transmission system operators of both
the dismantling of the region’s electricity system countries signed a Memorandum of Understanding
and consequently has inherited a poorly maintained with ENTSO-E confirming their intention.
and unsustainable power network.
Figure 9. Electricity network and power
In particular, because the country suffers from generation facilities in the
insufficient power generation capacity, it uses Republic of Moldova
its interconnections with Ukraine to ensure the
necessary system reserves and balancing energy.
This includes seven 330 kilovolt (kV) lines and
11 110 kV lines (see Figure 9).
The high-voltage interconnection between the

Republic of Moldova and Romania consists of
the 400 kV Vulcanesti-Isaccea overhead line
and four 110 kV lines; however, due to a lack of
synchronisation, these are used only in exceptional
cases. Because the local system is isolated from
ENTSO-E, it demonstrates major operational
limitations that affect the energy security of the
Republic of Moldova and hinder the operational
stability of the system and the possibilities for
power exchange. Thus, a feasibility study has
been conducted on interconnecting the energy
systems of the Republic of Moldova and Romania
by installing back-to-back stations (asynchronous
interconnection) (see Box 2). This scenario makes
it possible to maintain both the interconnection
with Ukraine, as well as energy exchanges with
Romania. Source: WB (2015)
Disclaimer: Boundaries and names shown on this map do not imply any official
endorsement or acceptance by IRENA.

Box 2. Asynchronous interconnection with Romania
A feasibility study was performed on Balti-Suceava overhead line, estimated at

interconnecting the energy systems of EUR 130 million (No. 2 in the figure).
the Republic of Moldova and Romania by
installing back-to-back stations (asynchronous 3. A back-to-back station with 300 MW capacity
interconnection). This approach makes it possible and construction of the 400 kV Straseni-
to maintain both interconnection with Ukraine as Ungheni-Iasi overhead line. An investment
well as energy exchanges with Romania. budget is not elaborated, as a connection
point with Romania has not been determined
In this context, the following scenarios were yet (No. 3 in the figure).
analysed (see Figure 10):
The feasibility study concluded that the most
1. A back-to-back station with up to 600 MW feasible and suitable is option 1, the Isaccea-
of capacity at Vulcăneşti and construction Vulcănești-Chisinau overhead line.
of the Isaccea-Vulcăneşti-Chisinau overhead
line, estimated at EUR 270 million (No. 1 in Once finalised, the project is expected to
the figure). increase diversification of the electricity market
in the country, enable future integration with the
2. A back-to-back station with 300 MW capacity ENTSO-E system and positively influence the
at Balti station and construction of the 400 kV increased uptake of renewable energy capacities.
Figure 10. Potential power interconnections of the Republic of Moldova with ENTSO-E
IPS/UPS
2
3
ENTSO-E
Source: MoEI (2018b)
Disclaimer: Boundaries and names shown on this map do not imply any official
endorsement or acceptance by IRENA.
2.5 Organisational structure of the • Promotes and ensures fair competition
energy sector and efficient operation of energy markets,
monitoring the level and effectiveness of
Below is a list of the most important actors involved market opening, as well as competition, in the
in governing the energy sector. wholesale and retail energy markets.
The Ministry of Economy and Infrastructure is • Issues licences for activities in the energy
responsible for administration of the energy sector, market and monitors compliance with licensing
as well as for elaboration and implementation of the conditions.
necessary measures to ensure the energy security
of the country. In particular, the ministry develops • Monitors the investment plans of system
energy-related policies, strategies, normative acts operators.
and sector programmes and project concepts.9
In addition, the ministry leads international • Sets and approves standards and requirements
collaboration in the energy field, including, but not for distribution, transmission and supply
limited to, the supply of strategic energy resources, activities.
attraction of foreign investment, and facilitation of
power interconnections. • Approves tariffs with the objective of
considering the interests of both producers
The Energy Efficiency Agency provides support and customers.
to the Ministry of Economy and Infrastructure in
implementing energy efficiency and renewable • Supervises customers’ rights and protections.
energy policies. Its mission is to: manage all
activities in the energy efficiency and renewable The Competition Council aims to ensure the
energy sectors; ensure the continuation of country- supremacy of competitiveness principles in the
wide efforts to reach the objectives stemming from energy market, in line with the provisions of the
national strategies and programmes; and guarantee Law on Competition (Law no. 183 of 11.07.2012), as
timely and proper implementation of legislation well as the relevant legislation on electricity and
related to energy efficiency and renewable energy. natural gas.
Moreover, following institutional reform in 2018,
the agency has absorbed the Energy Efficiency Moldelectrica, a state-owned enterprise, performs
Fund. As a result, it also is responsible for providing the functions of a transmission system operator
financial support to the sector – in part through and manages the internal electricity transmission
funds allocated from the state budget, but also network, including the operation of 4 699 km of
through additional resources to be fundraised on 400 kV, 330 kV, 110 kV and 35 kV transmission lines.
local, regional and international financial markets. In August 2018, the government strengthened
ownership independence through the adoption
The National Energy Regulatory Agency (ANRE) of Decision no. 806/2018, with the objective of
is an independent regulatory authority, directly advancing the unbundling process. In a next step,
subordinated to parliament. It is responsible transmission system operators will be further
primarily for the introduction of market regulatory certified by the regulator to prove compliance with
mechanisms that protect the interests of both unbundling-related requirements.
consumers and investors. In particular, the agency:
The state-owned RED Nord10 and privately owned
• Supervises compliance with laws and RED Union Fenosa perform the functions of
regulations in the energy field. distribution system operators (MoEI, 2017).
9 For example, project concepts for development of the power sector, refurbishment of domestic CHP plants, implementation of energy efficiency measures in the
residential sector, etc.
10 JSC RED Nord absorbed another state-owned distribution system operator, JSC RED Nord-Vest, in 2017.

Biogas plant in Drochia
Photograph: Energy Efficiency Agency

Renewable energy
development
3.1 Renewable energy resources and applications
The Republic of Moldova has vast technical potential for renewable

energy. Yet, deployment has been limited so far, with the exception of
the use of biomass in the heating sector. Indeed, although renewable
energy has developed rapidly worldwide over the past decade and is the
most cost-competitive solution in an increasing number of countries (see
Box 3), this trend has not yet been observed in the Republic of Moldova.
In 2017, the share of renewables in the Republic of Moldova’s gross final

energy consumption was 27.8%. Biomass provides 98% of this share and
is used mainly in the heating sector (NBS, 2018). This high contribution to
the energy mix was identified only recently, however, by the retroactive
revision of biomass household consumption data for 2010-2016. Efforts
by the National Bureau of Statistics, the United Nations Development
Programme (UNDP) and the Energy Community Secretariat to improve
the statistical record led to an apparent 10-fold increase in consumption
figures, from 67 ktoe in 2009 to 678 ktoe in 2016 (UNDP and ECS, 2016).
This revised share of renewables is well above the national target of 17%
by 2020, which was established in 2012, based on the energy situation in
2009. At that time, the share of renewables was 11.9%.11
Table 2 presents the evolution of renewable energy use in three sectors

– electricity, transport, and heating and cooling – taking into account the
revised data for 2010 - 2016.
11 Based on an analysis of the Energy Community Secretariat. The national sources, e.g. the Moldovan Energy
Efficiency Agency, indicated significantly lower share.
Box 3. The business case for renewables
Renewables have grown at unprecedented (GW), representing more than 29% of the world’s
rates over the past decade, with new records total power generating capacity. The bulk of this
being set each year. An increasing number renewable capacity was from hydropower (53%),
of countries have committed to those followed by wind power (23%) and solar power
developments, too. In 2016, at least 176 countries – mostly solar photovoltaics (PV), at almost 18%.
had renewable energy targets (IRENA, IEA and Between 2010 and 2017, the global installed
REN21, 2018). capacity of solar PV increased almost ten-fold
and onshore wind almost three-fold (IRENA,
The most spectacular changes have occurred in 2018a).
the power sector, where, since 2012, renewables
have outpaced conventional fuels in annual new Thus, the business case for renewables today
global capacity additions in electricity production is stronger than ever, with many technologies
(IRENA, 2018a). achieving spectacular cost reductions. Indeed, the
average costs of utility-scale solar PV and onshore
By the end of 2017, the global installed capacity wind declined by 73% and 22%, respectively,
of renewables amounted to 2 179 gigawatts between 2010 and 2017 (IRENA, 2018b).
Figure 11. Global levelised cost of electricity from utility-scale renewable power generation
technologies, 2010-2018
Offshore Onshore
Bioenergy CSP Geothermal Hydro Solar PV
wind wind
0.40
0.355
0.35
0.330
0.30
0.25
2017 USD/kWh
0.20
0.202
0.166
Fossil fuel power range cost
0.15
0.132
0.10
0.082
0.070 0.069 0.071
0.088
0.050 0.055
0.05
0.050
0.040
0.00
2010 2018 2010 2018 2010 2018 2010 2018 2010 2018 2010 2018 2010 2018
Source: IRENA (2019)

Table 2. Share of renewable energy in gross final energy consumption, by sector (%)
Year 2010 2011 2012 2013 2014 2015 2016 2017 Target
Electricity 6.9 4.4 4.0 1.7 1.9 2.0 2.0 2.2 10
Heating and cooling 34.4 36.1 39.0 39.9 43.6 44.5 45.5 46.1 27
Transport 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.3 10

Total renewable energy 21.3 22.0 24.3 24.4 26.1 26.2 26.9 27.8 17
Source: MoEI (2018c)
In the power sector, the most-used renewable The deployment of non hydro renewables had
energy technology is wind, with an installed been growing slowly since 2012, but it accelerated
capacity of 27 MW, followed by CHP using biogas greatly in 2016 (see Figure 13). This was due to
and almost 4 MW of solar PV (see Figure 12). investors seeking to obtain support before the new
The Republic of Moldova also has one, 16 MW law on the promotion of the use of energy from
hydropower plant, constructed in the late 1970s. renewable sources came into force in March 2018.
Figure 12. Installed renewable energy capacity, Figure 13. Dynamics of renewable
by source (as of March 2018) energy growth
40
3.9 MW
7%
16.3 MW 27.1 MW
31% 51% 30
Installed capacity, MW
20
10
5.7 MW 0
11%
2010 2012 2014 2016 2018
PV installations Wind installations PV installations Wind installations
CHPs on biogas Hydro installations CHPs on biogas
Source: MoEI (2018d) Source: MoEI (2018d)

Wind is the level up to which the potential is considered
by the report to be cost-competitive (see Box 4)
Wind is the most abundant renewable energy (IRENA et al., 2017).
source in the Republic of Moldova, with almost
the entire country offering technically suitable With 27 MW currently installed, wind is the most
locations for wind power investments (see widely used renewable energy technology in the
Figure 14). Moreover, as identified in the 2017 Moldovan power sector. This is based exclusively
IRENA report, Cost-competitive renewable power on second-hand turbines imported from European
generation: Potential across South East Europe, countries. With a new support regime (see Section
wind can provide up to 21 GW of power capacity, 3.2), up to 100 MW of new wind capacity is expected
much of which could be deployed with the levelised in the coming years. Further developments are also
cost of electricity (LCOE) below 90 EUR/MWh. This considered for industry self-consumption purposes.
Figure 14. Wind potential in the Republic of Moldova
Wind Speed at 100m - [m/s]

5.0
5.2
5.4
5.6
5.8
6.0
6.2
6.4
6.6
6.8
7.0
Source: IRENA, Global Atlas; map data: Risø DTU (2018); base map: OpenStreetMap (2018). Available at: http://irena.masdar.ac.ae/?map=103
Disclaimer: Boundaries and names shown on this map do not imply any official endorsement or acceptance by IRENA.

Box 4. Cost-competitive solar PV and wind potential in South East Europe
IRENA’s Global Atlas is • Vast technical renewable energy potential

the largest initiative to exists in the region, amounting to 739 GW.
assess renewable energy Wind energy is the most abundant resource in
potential on a global the region, with an overall technical potential
scale. The platform hosts of over 532 GW, more than four times that for
over 2 000 renewable solar PV.
energy maps, covering
solar, wind, bioenergy, • 126.9 GW of the region’s overall renewable
geothermal and marine energy potential could be implemented in a
energy, including several cost-competitive way today. This is almost
high resolution maps. 17% of the identified technical potential and
is also 15 times higher than the 8.2 GW of
In 2016, the tool was used planned total capacity additions required by
to conduct a suitability National Renewable Energy Action Plans from
analysis and to map 2016 until 2020.
investment opportunities for wind and solar PV
in South East Europe. Six dimensions were taken • The additional cost-competitive potential
into account to identify these areas: resource could be even higher (above 290 GW), if low-
intensity, distance to power grids, population cost capital was available. In total, by 2030,
density, land cover, topography and altitude, and the additional cost-competitive potential of
protected areas. solar PV and wind will equal 620 GW.
The results of the assessment were presented in

the IRENA report, Cost-competitive renewable
power generation: Potential across South East
Europe, launched in 2017. The report found the
following:
Note: The study covers: Contracting Parties of the Energy Community (Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, the Republic of Moldova, Serbia, the former
Yugoslav Republic of Macedonia, and Ukraine); and member states of the European Union (Bulgaria, Croatia, Romania and Slovenia).
Note that this designation of Kosovo* is without prejudice to positions on status and in line with the United Nations Security Council Resolution 1244 (1999).
Bioenergy 2010). This figure, sufficient to cover 18% of national

energy needs, no longer seems to be accurate. In
The Republic of Moldova is known as an agricultural 2017, the consumption of biomass totalled 733 ktoe
country with a significant biomass potential. Thus, (NBS, 2018).
bioenergy is the most popular renewable energy
source in the country and remains a priority for Pellets and briquettes – burned in highly efficient
the government. Almost all biomass is used in boilers or stoves – represent just 3% to 5% of
a traditional manner, though – as firewood and biomass use, according to the Energy Efficiency
agricultural waste, typically consumed for heating Agency. At the same time, limited developments
purposes, especially in rural communities. have occurred in the power sector, with less than 6
MW of bioenergy capacity installed so far. Actions
In 2010, the annual potential of solid biomass was towards promoting the use of liquid biofuels in
assessed at 21 042 terajoules, or 503 ktoe (UNDP, transport were also only initiated recently.
Box 5. Republic of Moldova Energy and Biomass Project
Over the last decade many development In addition, the project resulted in:
partners supported the Moldovan authorities
in replacing coal- and gas fired boilers, as well • Promotion of the use of bioenergy and
as basic stoves, with biomass heating units that increased awareness and social acceptance.
burn straw, pellets, briquettes and firewood.
• Vocational training for biomass boilers
One of the most important projects in this regard operators and foresters.
was the Energy and Biomass Project, financed
by the European Commission and implemented • Launch of the Biomass Energy Cluster and the
by UNDP. This aimed to increase the use of Bioenergy Association.
energy from biomass sources and laid the basis
for establishing functional markets for biomass • Creation of a web platform to connect biomass
technologies. Furthermore, it envisaged the energy producers and consumers.
creation of jobs and value-added chains at the
local and regional levels through the supply of • Several companies assembling and
biomass fuel and technologies (UNDP 2018a, manufacturing biomass boilers.
UNDP 2018b).
• Inauguration of public-private partnerships
With a total budget exceeding USD 28 million, for the provision of bioenergy services.
within its first phase (2011-2014) and second phase
(2015-2018), the project provided support for the • Accreditation of the first testing laboratory
installation of biomass-based heating systems for the physical and chemical parameters of
in more than 250 buildings – mostly schools, biofuels (see Figure 15).
kindergartens and medical facilities. Moreover,
almost 1 000 small residential boilers were installed
thanks to subsidies for renewable energy heating.
Overall, the installed capacity of equipment during
this period was 41.2 megawatts-thermal.
Figure 15. The Solid Biofuel Laboratory at the State Agrarian University of the Republic of Moldova
Source: UNDP (2017)

The deployment of biomass continues to provide Only 50-plus small projects, mostly rooftop solar, have
employment opportunities as well. Existing efforts been implemented during the last five years, with a
are oriented towards strengthening the newly cumulative capacity of almost 4 MW. Solar PV could
created industry of producing solid biofuels provide up to 4.5 GW of capacity, however, more than
(briquettes and pellets), which already ensures 20% of which (1 GW) was considered already cost-
about 400 new jobs in rural areas and had an competitive in 2016. This meant that it had an LCOE
assessed turnover of USD 6 million to USD 8 million below 90 EUR/MWh, if attractive financial conditions
in 2017. According to the Energy Efficiency Agency, were provided.12 The other 80% would become cost-
this market is driven by 155 MW of heat-only competitive by 2030 (IRENA et al., 2017).
boilers that run on biomass, with 67 MW installed
in the public sector and approximately 88 MW in The public sector remains the leader in using solar
the residential sector. energy for hot water production. Through the
Energy and Biomass Project (see Box 5), 30 public
The Ministry of Economy and Infrastructure also institutions benefited from the installation of solar
aims to promote the energy crop production water heaters, with these complementing existing
industry. This priority stems from the fact that biomass boilers. Another 15 projects in the public
consumers prefer to use wood biofuels for energy, sector were financially supported by the Energy
instead of less efficient straw and other residues, Efficiency Fund.
even though the country’s level of forest cover is
only about 12%. Installing solar water heaters, especially in public
institutions with high hot water demand, such as
Solar hospitals and kindergartens, proved to provide
cost savings; thus, the public sector plays an
The Republic of Moldova has experienced exemplary role in promoting wider exploitation of
limited development of solar PV in recent years. solar heating potential.
Figure 16. Global horizontal irradiation in the Republic of Moldova
Long-term average
GHI kWh/m2
1225
1250
1275
1300
1325
1350
1375
1400
Source: IRENA, Global Atlas; map data: World Bank S map (2018); base map: OpenStreetMap (2018). Available at: http://irena.masdar.ac.ae/?map=3103.
Disclaimer: Boundaries and names shown on this map do not imply any official endorsement or acceptance by IRENA.
12 Weighted average cost of capital (WACC) = 8%
Hydropower 3.2. Renewable energy support
mechanisms in the power sector
Despite its large number of rivers, the Republic of
Moldova has only one reservoir hydropower facility, Until March 2018, power generation from renewable
a 16 MW plant located in Costesti on the Prut River, sources was supported by the Renewable Energy
the second most important river in the country. In Law of 2007 (No. 160-XVI of 12.07.2007). The law
addition, 254 kilowatts (kW) of small hydropower envisaged the cost-plus principle.13 Under this, ANRE
installations are in operation (ANRE, 2017). issued a tariff for 15 years – based on the actual eligible
costs incurred – only after the investments had been
The best areas for development are located in the made. In addition, the regulator had the right to adjust
Dniester, Prut and Danube river basins, with the the tariff to regional benchmarks, if they were lower.
country’s total potential estimated at 3.36 terawatt- This approach was not sufficient to attract investments
hours per year (Ceban, 2015). As envisaged by the in the sector and was therefore revised.
Energy Strategy 2020, some mini-hydro stations,
totalling 1.2 MW in capacity, were planned for the The Law on the Promotion of the use of Energy from
Raut River, close to the village of Tribujeni in the Renewable Sources (Law No. 10 of 26.02.2016),
Orhei district (UNECE, 2009). came into effect in March 2018 in the form of a
tariff-based scheme and net metering. The law also
Geothermal provided the necessary guarantees for investments,
including: non-discriminatory grid connection;
The geothermal energy resource potential of the priority dispatch; and an obligation for the central
Republic of Moldova has been poorly investigated, electricity supplier to purchase all-renewable-
with no comprehensive quantified estimate existing. generated electricity for 15 years. In addition, the
Nevertheless, the country has significant availability new market-based scheme promotes competition
of low enthalpy geothermal potential, especially among investors, as it envisages auctions for projects
in the southern part of the country, which could above 4 MW in the case of wind and 1 MW for other
be widely used by heat pumps. The government’s technologies. At the same time, the law supports the
focus on this technology is limited, with no actions development of small-scale, community-promoted
envisaged in the National Action Plan for Renewable renewable energy projects.
Energy. The Energy Efficiency Agency, however, has
identified four operational geothermal installations, Figure 17 represents the support mechanisms
with a total installed capacity of 142 kW (EEA, 2016). under the 2016 law.
Figure 17. Graphic representation of the support mechanisms in the Republic of Moldova
NET metering 200 kW
Installed Capacity
Feed-in tariff Auctions

0 kW
10 kW
1 MW / 4 MW (wind)
Capacity limit
Source: MoEI (2018a)
13 Tariffs are calculated based on project costs plus a relevant return.

Net metering and community-based projects served principle. In 2017, ANRE approved a
methodology (Decision No. 375 of 28.09.2017) for
Net metering has been introduced to encourage determining those tariffs but some of its elements
project owners who cover their own electricity are subject to revision.14 The total capacity of those
consumption with small, renewable-based projects benefitting from feed-in tariffs is assumed
generation units of up to 200 kW capacity. Any to be 55 MW.
excess, calculated in a one-year accounting period,
can be sold on at the average wholesale market Auctions (competitively set tariffs)
price.
The introduction of capacity auctions, tentatively
In addition, the Ministry of Economy and scheduled for 2019, is considered the most important
Infrastructure and the Energy Efficiency Agency are change in the renewable energy sector.
extensively promoting the concept of renewable
energy projects driven by local communities, in As presented in Table 3, the government aims to
order to increase the use of distributed generation. organise technology-specific tenders for a total
Despite ongoing efforts to promote the concept capacity of 113 MW, which will guarantee fixed tariffs
of community self-sufficiency, mainly by sharing for 15 years. The scheme has been designed in line
European best practices, the country has not yet with the EU Guidelines on state aid for environmental
experienced any such developments. protection and energy for 2014-2020, which are
mandatory for the Contracting Parties of the
Feed-in tariffs Energy Community. In addition, IRENA, the Energy
Community Secretariat and the European Bank
Administratively set feed-in tariffs for small for Reconstruction and Development (EBRD) have
installations (those with capacities below 4 MW in jointly developed Guidelines for Contracting Parties
the case of wind and 1 MW for other technologies) of the Energy Community, which provide insights in
will be issued by ANRE using a first come first this regard (see Box 6).
Table 3. RE capacity quotas under the new supporting scheme
Quotas (MW)
Threshold
# Type of technology for small
Classic installations
Auctions
feed-in tariff
1 Wind 20 80 4
2 Solar PV 15 25 1
3 Biogas installations 12 8 1
CHP installations (on solid biomass)

4 5 – 1
5 Small hydro 3 – 1
TOTAL 55 113 –
Source: Based on Government Decision no. 689 of 11.07.2018
14 It also sets out a methodology for determining ceiling prices for auctions.
Source: MoEI (2018c)
Box 6. Policy Guidelines on Competitive Selection and Support for Renewable Energy
In March 2018, the Policy areas of auction design: the competitive process
Guidelines on Competitive framework; procurement choices; selection
Selection and Support process choices; and the delivery mechanism for
for Renewable Energy renewable energy support.
were prepared jointly by
the EBRD and the Energy Guidelines are already being used in the policy
Community Secretariat, in work of the EBRD and the Energy Community
collaboration with IRENA Secretariat. In Albania and the former Yugoslav
(ERBD et al., 2018). Republic of Macedonia, EBRD is using the
guidelines to assist local authorities. In Ukraine,
Intended for countries of the guidelines are informing discussions on the
the Energy Community policy framework for supporting renewables.
Treaty that are also EBRD In the Republic of Moldova, EBRD has recently
countries of operation, these Guidelines build initiated its efforts to support the country in
on IRENA’s Renewable Energy Auctions: A Guide designing renewable energy auctions for onshore
to Design (IRENA and CEM, 2015). They provide wind and solar PV, including preparation of the
recommendations for governments in four required tender documentation.
Figure 18. Key steps in a tenders’ development
Establishing of
Launching of the
the capacity Elaboration of
tendering
limits and tendering
procedure
maximum documentation Submission of
Offers
capacity quotas the offers and Signing of the
/Status - IN evaluation
/Status - IN their contract
PREPARATION, and awarding
/Status - DONE, PROCESS, qualification
Expected
Responsible Responsible
timeframe -
entity - MoEI, entity - MoEI/
mid. 2019 /
Government/
The recently approved regulation on tendering Figure 18. Additional tendering documentation and
(Government Decision No. 690 of 11.07.2018) an auctions calendar are yet to be prepared by the
provides an initial framework for organising auctions national authorities.15
that grant “eligible producer” status on large
investors. This is done through the establishment Auctions will be carried out by the Tendering
of unequivocal, objective, transparent and non- Commission, which comprises representatives of:
discriminatory procedures, conditions and criteria. the Ministry of Economy and Infrastructure, the
Ministry of Agriculture, Regional Development and
Under the new regulation, development of Environment, the Agency of Land Relations and
the renewable energy auctions will be carried Cadastre, the Energy Efficiency Agency, and the
out in compliance with the steps presented in Public Property Agency. Any bid that meets the pre-
15 As of December 2018.

qualification criteria presented in Figure 19, including An additional guarantee needs to be submitted
bids put forward by foreign developers, is eligible to the Tendering Commission within 30 days by
to participate in the auctions. The criteria include the winner of a tender to ensure delivery of the
issues related to land, financial credibility, technical commissioned electricity. Such a guarantee, at a
credibility and connection to the grid. They have fixed amount per kW, is not to exceed 2% of the
been established to ensure that only those with a value of the capital investment cost used by ANRE
genuine intention to implement the project are in the methodology used to set the ceiling price.
admitted to the procedure. Once selected and granted with the status of eligible
producer, an investor will have 36 months to finalise
The selection procedure is to be held based on the its power plant.
lowest price criterion, provided that:
The key development steps for renewable energy
• This is below the ceiling price to be determined projects/business in the Republic of Moldova are
by ANRE. specified in Annex. Key development steps for
renewable energy projects
• The proposed capacity is within the quota for
each technology set out by the government (see In addition to the pre-qualification criteria, renewable
Table 3). energy investors must be aware that the total
capacity of all the projects developed by an investor
• New equipment is to be used.16 using the same technology will also be taken into
account while issuing feed-in tariffs. If the total
Moreover, potential investors are obliged to submit capacity exceeds the capacity threshold provided in
the proposal’s guarantee together with the offer. Table 3, participation in a tender will be required in
This is specified in the tender documentation as a order to benefit from the support scheme. Similarly,
fixed amount per 1 kW of specific technology, equal in the case of increasing the capacity of an existing
to 0.2% of the capital investment cost used by ANRE power plant, its cumulative capacity will be taken
in the methodology used to set the ceiling price. The into account. Those rules also refer to an investor’s
proposal’s guarantee shall be provided in the form of spouse, relatives and affiliated persons (up to the
a guarantee letter provided by a financial institution. second degree).
Figure 19. Pre-qualification criteria
Financial credibility
• Proved financial viability (equity, credits, guarantees)
• Business plan
• Project financing plan
Connection to grid
• Connection notice from the relevant TSO
Pre-qualification
criteria Technical credibility
• Compliance with technical requirements
• Feasibility study
• Proof of purchase/purchase intention of the equipment
Eligibility of location
• Ownership/right to use the land
• Proof of land designation change, if necessary
16 Manufactured no more than 48 months before the start-up of the power plant.
3.3. Financing of renewable energy • MoSEEFF – the Moldova Sustainable Energy
Efficiency Financing Facility. With a total
Most of the renewable energy projects in the budget of EUR 42 million, this aimed to support
Republic of Moldova were financed by multilateral the use of renewables by local enterprises.
development banks or bilateral development Solar was one of the focus areas, and a diverse
agencies, or were self-financed by the private range of projects was implemented through
sector. Examples of the first source of funding the programme, from a 100 kW rooftop power
include the EBRD, the European Investment Bank plant installed on an agriculture warehouse, to a
(EIB), and the World Bank Group, while examples 500 kW solar PV farm installed on the grounds
of the second include the Swedish International of a carpet manufacturer.
Development Cooperation Agency and the
Japanese International Cooperation Agency • MoREEFF – the Moldova Residential Energy
(JICA). Private sector funding was used mainly in Efficiency Financing Facility. This had a total
the case of biogas and solar. budget of EUR 35 million and targeted the
residential sector during the period 2012-2017.
While some of these partners provided grants for
the financial products developed in collaboration In addition, the Republic of Moldova is one of the
with local commercial banks, others set up credit beneficiaries of the Green Climate Fund (GCF)
lines to support both renewables and energy EBRD Sustainable Energy Financing Facilities
efficiency. For example, the EBRD’s financing tools, programme. This is set to direct USD 1.4 billion to
implemented together with BCR Chisinau, Moldova financing facilities with local financial institutions
Agroindbank, Moldindconbank, ProCredit Bank in Armenia, Egypt, Georgia, Jordan, the Republic
and MobiasBanca, include: of Moldova, Mongolia, Morocco, Serbia, Tajikistan
Planting the energy willow, Orhei Professional School, Orhei

Photograph: UNDP Moldova

and Tunisia, in order to support renewable energy, be in a position to prove their financial credibility.
energy efficiency projects and climate adaption Already, Moldelectrica has issued more than 30
measures (GCF, 2017). connection permits with a cumulative capacity
of about 1 000 MW for new renewable energy
Meanwhile, the local financial sector still does not projects.
offer adequate financing options for renewables,
with the exception of a few banks with foreign Yet, the preparatory costs related to the pre-
capital that have dedicated financial products for feasibility stage and permitting, amongst other
renewable energy projects.17 The limited number factors, are considered to be at a level that can
of financial institutions open to this field results limit the appetite of investors for the Republic
from the unavailability of low-cost capital and the of Moldova. Thus, given the condition of the
high-risk perception of such projects. The lack of local financial sector, only larger companies have
understanding of renewable energy technologies sufficient financial resources to initiate project
leads to the broad perception of renewables as development. Small and medium sized enterprises
being very innovative and prone to failure, which with scarce finances are exposed to a high risk
has led to high interest rates from capital providers. of failure in the completion of a project. Some
support is provided by the Energy Efficiency Fund
The continuous involvement of international and international financial institutions, but this is
players, however, is expected to advance the often insufficient to increase the participation of
uptake of renewable energy sources and to ensure those entities in the renewable energy market.
that all investors, including small ones, that are
interested in the new support mechanisms will 17 Procredit, Mobiasbanca.
Wind turbine and transmission lines

Challenges and
recommendations
Over the past few years, the Republic of Moldova has stepped up
efforts towards developing renewable energy sources. The decade-
long activities to develop the solid biofuel sector, as well as the recent
adoption of the new support schemes for renewable electricity, have
contributed greatly to the rising interest of the business community.
Additional efforts are necessary, however, to cement the foundations

of the sector. The sections below outline the main challenges
hindering more accelerated deployment of renewable energy and the
corresponding recommended actions to address them. These have
been identified via a multi-stakeholder consultative process along
with the RRA implementation, described in detail in Chapter 1.
4.1 Long-term planning
The Republic of Moldova is poorly endowed with conventional

energy resources and thus highly dependent on imported energy.
Only around 25% of primary energy consumption is supplied through
indigenous resources, with more than 98% of this biomass, used
mostly for heating in rural areas.
As identified in the IRENA report, Cost-competitive Renewable Power

Generation: Potential across South East Europe (IRENA et al., 2017),
the country has abundant renewable energy sources. With more than
27 GW of technically suitable potential, those resources could be
widely deployed to help achieve two key objectives of the Energy
Strategy by 2030: to ensure the security of energy supply; and the
sustainability of the energy sector.
With the costs of renewables falling rapidly over the past decade,
these technologies offer cost-competitive energy supply solutions
in an increasing number of countries, worldwide. The trend is set to
grow, too, as technological innovation continues to drive the next
generation of cost declines.
Current efforts to raise renewable power capacity beyond the 2020

target also confirm the government’s recognition of the importance of
the ongoing energy transition, in enabling the country to improve its
energy security. Additional policy and regulatory actions are required
to solidify the role that renewable energy could play in addressing the
key energy challenges in the country. In this context, the following
recommended actions can be considered:
• Adopt a renewable energy target for 2030 any potential operational constraints that could
result in the unavailability of sufficient power to
Since the renewable energy target of 17% by meet demand.
2020 has already been overachieved, it neither
provides long-term predictability, nor reflects the This study, including economic dispatch,
country’s vision of energy sector development. would allow investigation of multiple scenarios
The fact that the current share of renewables for the generation mix, including those with
(27.8%) was reached mainly through the revision higher shares of renewables, as well as any
of biomass consumption data adds another other policies and sensitivities. The modelling
level of uncertainty. Although the announced normally covers one year – with a higher
development of 168 MW of renewables capacity time resolution to provide more insights on
in the coming years has captured the interest of operational cost impacts – and aims to ensure
several investors, this could be considered a one- that the system load is supplied entirely and
off boost to the market, rather than an element most economically. The analysis would also
of a solid strategy. address the issue of ancillary services and
balancing, which are becoming increasingly
Therefore, the ongoing activities undertaken important with the deployment of intermittent
by the Ministry of Economy and Infrastructure, renewables and the increasing availability of
as well as the discussions within the Energy distributed generation.
Community, are undertaken with a view towards
agreeing on a new renewable energy target The results could help build confidence among
for 2030. IRENA’s recently initiated regional policy makers, system operators and investors,
REmap analysis for the countries of Central and as well as identify the most cost-effective
Southeast Europe, including the Republic of option for balancing the system. The study
Moldova, would contribute to these efforts and should consider the ongoing efforts to ensure
help identify cost-effective technology options interconnection and asynchronous operation
for the deployment of renewables in the power with Romania, expected within the next
and end-use sectors. The future long-term four to five years, as well as the plans of the
framework for renewables could also emphasise governments of the Republic of Moldova and
the important role that distributed generation Ukraine to ensure synchronous operation with
across the country can play in consolidating the ENTSO-E, in the long run.
national power system.
To support countries in assessments of power
• Conduct a production cost modelling study system flexibility, IRENA and the VTT Technical
Research Centre of Finland Ltd. have developed
Renewables are becoming an increasingly cost- the FlexTool. This analyses not only the
competitive source of energy in the Republic of traditional concept of flexibility (concerning,
Moldova and are poised to play a greater role in for example, flexible thermal and hydropower
the national power system. generation with high ramping capability
and very low start-up time), but also other
From a technical perspective, some research innovative technologies that enrich the concept
studies indicate that the system could absorb of flexibility. These include flexible demand,
around 1 GW of renewables – a level almost energy storage and sector coupling. The
equal to the maximum load, which reaches FlexTool is capable both of analysing system
1
100 MW (Gropa, 2017). The increased use operations using a time step that represents
of solar PV and wind technologies, however, real-world challenges (an hour or less in the
would present a new challenge, as the country case of VRE variability) and of carrying out long-
completely relies on Ukraine for balancing its term analyses and proposing possible flexibility
generation. Thus, the country should carry out solutions in a hypothetical future system with
a production cost modelling study to determine high VRE penetration (IRENA, 2018c).

4.2 Regulatory environment for financial institutions. Successful efforts in this regard
renewable power investments will guarantee confidence in the government as a
reliable partner in the development of renewable
Until March 2018, the development of renewable energy projects and will maintain the interest
energy capacity in the power sector was supported of the investor community. In this context, the
by tariffs issued by ANRE. These were calculated government is expected to:
for each individual project, after the investment was
done, based on the actual eligible costs incurred. This 1. Adopt essential secondary legislation,18
lack of revenue predictability before the completion including: on standard documentation
of a project, combined with the administrative and for the tendering procedure; on eligible
bureaucratic challenges reported by stakeholders, producer status confirmation (for small
failed to ensure an attractive environment for renewable electricity producers); and on grid
significant uptake of renewables, over the last decade. connection, including provisions referring to
Only 52 MW of renewable capacity had been installed the integration of renewables.
by March 2018.
2. Implement the methodology used to calculate
While the methodology developed by ANRE intended feed-in-tariffs and ceiling prices for tenders in
to ensure that investment costs are recovered a transparent manner. All key elements of the
through a tariff provided for 15 years, investors have methodology should be made public, including
questioned some of its assumptions. For instance, investment cost per MW/technology, capacity
while the regulator assumed a capacity factor of factors, and operation and maintenance costs.
0.25 for wind, which is relevant for new turbines,
almost all units imported by local owners could reach 3. Ensure that all the elements of auction design,
capacity factors of only 0.17—0.18. In consequence, including standard documentation, are in line
discrepancies in cash flow projections between with the EU’s 2014 Guidelines on State Aid for
investors and ANRE led to dissatisfaction with the Environmental Protection and Energy and with
issued tariffs. Moreover, as raised by the business international practices. A joint Policy Guidelines
community, exclusion of some expenditures was not on Competitive Selection and Support for
clearly justified. Renewable Energy, prepared by the Energy
Community Secretariat and the EBRD, in
With the recent introduction of the new support collaboration with IRENA, provides insights in
regime, ANRE will be responsible for setting feed-in this regard (EBRD et al., 2018). Among other
tariffs for small-sized projects, up to 4 MW for wind aspects, issues need to be addressed in relation
and 1 MW for other renewable energy sources. In this to: the technical and human capacity of a
context, the authorities can consider the following committee responsible for the administration of
recommendations: auctions; and the establishment of an effective
dispute resolutions centre.
• Strengthen the enabling regulatory framework
4. Facilitate the introduction of the net
The Law on the Promotion of the use of Energy from metering scheme for distributed renewable
Renewable Sources (Law No. 10 of 26.02.2016) has energy generation. Despite the legislative
been in force since March 2018, although additional framework in place, the mechanism is not
pieces of legislation are still under preparation to widely used, due to the lack of clear rules for
ensure smooth implementation of the support distribution system operators, insufficient
schemes. Clarity on all requirements and understanding of the mechanism among
procedures to be followed needs to be ensured local commercial banks, and the structure of
well in advance for both project developers and subsidised electricity prices.
18 As of December 2018. In addition, the recently approved regulation on tendering (Government Decision no. 690 of 11.07.2018) provides an initial framework for organising
auctions that grants an “eligible producer” status to large investors through the establishment of unequivocal, objective, transparent and non-discriminatory procedures,
conditions and criteria.
• Streamline administrative procedures and assessments of the social and environmental
facilitate their enforcement impacts of a new power plant, are too lengthy.
The relevant national authorities are not seen
The lack of effective co-ordination among as having sufficient capacity to issue permits
different actors hinders the deployment of in a timely manner. Therefore, strengthening
renewable energy in the country. As a result, the capacity and optimising internal procedures,
private sector highlights some procedures as with the support of external technical
too costly and lengthy, or even catalogues them assistance, if necessary, could ensure that the
as an administrative burden. To ensure better legally set time frame and other requirements
harmonisation, the Ministry of Economy and are respected. In particular, efforts should be
Infrastructure is advised to initiate a dialogue focused on the practical implementation of the
with the Ministry of Agriculture, Regional provisions of the EU’s Directive 2014/52/ EU
Development and Environment, the Ministry of on the Assessment of the Effects of Certain
Finance, and Moldelectrica to clarify and simplify Public and Private Projects on the Environment,
such procedures. This effort could be part of the adopted by the Republic of Moldova in October
forthcoming revision of the National Renewable 2017, including the arrangements for early and
Energy Action Plan and the development of an effective opportunities for public participation
integrated National Energy and Climate Plan, (EnC, 2018).
and may include the following aspects:
3. Taxation
1. Land use designation
Incentives of a customs and fiscal nature
The national Land Code (Law No. 828-XII of are envisaged in the legislation,20 to ensure
25.12.1991) envisages the use for agriculture additional support to wind and solar PV
purposes only of sites/land parcels with a Soil investments. These incentives include reduced
Potential Index exceeding 60 points.19 As a customs fees at import, exemption from value-
consequence, most of the areas with abundant added tax on installation work and other inputs
wind resources might not be available for the for renewable energy projects. Yet, some of the
construction of renewable energy power plants, relevant provisions are considered unclear by
due to their status as agricultural land, despite both the investor community and the authorities
the vast economic feasibility associated with the responsible for implementation. In particular,
renewable energy business in such areas. Even specific technologies and sizes of projects are
with the presence of wind farms, however, land not treated in a coherent way. For example,
can fulfil other functions, such as agriculture: a project with only one wind turbine does
only some 10% of such land is occupied by wind not correspond to the “wind park” definition,
power equipment, while the remaining 90% is according to the interpretation of the Moldovan
available for grazing or cultivation. Moreover, Fiscal Service. Thus, a univocal understanding
a power plant could generate additional of those provisions has to be ensured, either
income for land owners and taxes for local by amendment of the legislation, or by
municipalities. elaboration of a fiscal practice to be followed
by the national fiscal authorities. Furthermore,
2. Environmental impact assessment any future changes in tax legislation should be
introduced with a sufficient vacatio legis21 to
The perception of stakeholders in the sector enable adaptation of the business models used
is that current procedures, in particular by investments already under development.
19 The Soil Potential Index, or SPI, is a calculation which rates soil on a scale of 0-100 points based on its capability to produce crops. For example, a rating of 10 would indicate
a soil poorly suited to growing crops, while a rating of 95 would mean top quality soil with virtually no impediment to crop production.
20 Law No 172 of 25.07.2014 on the Approval of the Combined Nomenclature of Goods and The Fiscal Code of the Republic of Moldova, No. 1163 of 24.04.1997.
21 Latin, meaning “absence of law”. Refers to the period of time between a law’s promulgation and it taking effect.

4. Grid connection permits have been replaced by biomass heating units
burning straw, pellets, briquettes and firewood.
Approximately 1 GW of renewable energy projects, Nevertheless, the sector requires further effort to
mostly wind, have received grid connection ensure co-ordination and allocation of resources,
permits in the last few years, with the transmission in order to develop a proper market that would
system operator now refusing to issue such facilitate communication between suppliers of
permits to additional investors, due to concerns raw material and producers of fuels. The currently
about grid stability. In fact, however, only projects existing trade and information portals created
awarded in the upcoming auctions are likely to be within the framework of the UNDP Energy and
implemented. As a result, an increased volume of Biomass project have not been sufficient to
issued permits, even exceeding 1 GW, would not establish an effective market with stable demand
necessarily affect stability of the grid. As a permit and supply sources. A comprehensive approach to
is required to take part in forthcoming renewable the bioenergy sector, including biofuels, has never
energy auctions, the approach of Moldelectrica been developed. In this context, several key steps
appears to be to limit future competition to are recommended:
the investors already present in the Republic of
Moldova. The credibility and the outcome of the • Develop a strategy for the bioenergy sector
auctions could therefore be severely undermined
and, thus, a solution should be found to enable With limited availability of wooden biomass,
the issuance of grid connection permits to new the country needs to manage the sector in a
potential renewables investors. sustainable manner. A deep and comprehensive
inventory of all forest areas, as well as marginal
4.3 Bioenergy and depleted lands, could be established to
ensure an accurate estimation of the biomass
The Republic of Moldova is an agricultural country potential that could constitute a basis for a
with significant biomass potential, with bioenergy country-wide programme for the use of solid
contributing greatly to the achievement of the biofuels.
current 27.8% share of renewables in gross final
energy consumption. Almost all biomass is firewood In particular, the potential for the cultivation of
and agricultural waste, used in a traditional energy crops can be further considered. With
manner. When combined with the widespread use an estimated 38 000 hectares available for
of inefficient technologies and the illegal cutting growing both woody and herbaceous biomass,
of firewood, this constitutes a challenge for policy the Republic of Moldova could develop the
makers, as the level of forest cover is very low, at local raw material industry in a short period of
only about 12%. time. The strategy, however, would need to be
based on a detailed analysis, determining the
At the same time, national stakeholders increasingly most promising energy crops, the most feasible
recognise that marginal and depleted lands locations within the country, and the types of
represent a potential for energy crop plantations. soil where the crops have the highest yields.
A comprehensive assessment of total bioenergy
potential, including that related to energy crops, In addition, the strategy could address many
has not been developed. The only estimation of the challenges that the energy crop sector
provided so far has identified limited energy currently faces, including land conversion
potential from agricultural residues. issues, land suitability and the availability
of financial support. In this context, the
Over the last decade, the country has intensified government could analyse the opportunity to
its efforts to develop a bioenergy sector and revise the relevant legislation with the objective
market, with a focus on solid biofuels. With the of increasing the role of local public authorities
assistance of development partners, many coal- in promoting the bioenergy sector, including
and gas fired boilers, as well as inefficient stoves, energy crops. As the owners of a vast amount
of land, those authorities could strengthen their The online platform could also facilitate
commitment to developing the local industry the market operation and entry of new fuel
and would benefit from locally harvested, suppliers, including producers of agriculture
cost-competitive heating resources; public residues and local public authorities, as
institutions in more than 250 communities in well as enhance fuel price competition and
the country use biomass boilers for heating supply liquidity. In addition, this platform can
purposes. More common use of public-private offer a source of information on the benefits
partnerships and inter-municipal co-operation stemming from the use of bioenergy and be
would also facilitate development of this sector. a repository of available opportunities for
local consumers to switch to this source of
Finally, the programme should build on a energy. This type of bridge between biomass
comprehensive assessment, providing clarity on producers and potential customers would
the most suitable technology for each potential contribute to more stable and increasing
group of beneficiaries. As raised by stakeholders, demand. Furthermore, the platform could be
due to a large diversity of raw material, as well further developed based on best practices in
as different consumption profiles, there is a lack biomass exchange platforms, including the
of understanding of the available options. Some experience of Lithuania in the development of
failures to match beneficiary and technology the Baltpool biomass exchange (Energypost,
have turned out to be costly in the past. Thus, the 2017).
analysis should consider: all types of properties;
different groups of beneficiaries; several • Identify an optimal pathway to increase the
technologies, such as organic Rankine cycle role of biofuels
(ORC), pyrolysis, Stirling, and steam mini turbines;
and different consumer profiles. This exercise The country has committed to reach a 10%
will help determine different business models share of renewables in the transport sector by
for using biomass as a sustainable alternative – 2020, but no actions have been taken so far to
including in district heating – and provide clear promote the use of liquid biofuels. At present,
recommendations for implementation, based if the widespread perception that the country
possible, on successful pilots. lacks suitable areas to grow sugar cane and
rapeseed continues to hinder development in
• Encourage the use of and further develop the this area. In addition, with no infrastructure in
online platform for biomass trade place to cultivate such crops, adaptation costs
for the existing infrastructure would decrease
A major challenge for the sector is the lack of the competitiveness of locally produced liquid
proper communication and exchange among biofuels against imports, opponents say.
actors in the biomass market, even though a
dedicated online platform was recently launched. There is, however, a clear understanding of
The limited use of this tool causes considerable the need to find an adequate approach to
disruption to the value chain, as suppliers of ensure more sustainable use of energy sources
raw material and producers of fuel struggle to in this sector. An assessment is therefore
find effective communication channels – and as recommended, in order to identify an optimal
final beneficiaries face problems in identifying pathway towards the use of biofuels in transport.
reliable sources of biomass fuel. The country is The options currently under discussion include:
advised to actively promote the platform and full reliance on domestic production; import of
to encourage potential users to increase trade bioethanol and biodiesel; or a combination of
in all types of biomass, taking into account the two options, in light of the local production
factors such as price, quality, region of origin potential and price affordability. The results
and transport. With the expected development of the assessment could provide a clearer
of the energy crop industry, widespread use of indication of the potential way forward for the
such a tool is even more necessary. biofuels sector.

4.4 Financing of renewables 1. Enhancement of the templates of the key
project documentation, including the power
Most of the existing renewable energy power plants in purchase agreement (PPA), to provide the
the Republic of Moldova were supported by financing guarantees and predictability necessary to
lines and programmes launched by development the stakeholders involved. This would include,
partners. This is because local commercial banks are among others, the following essential elements:
cautious about investing in this sector, due to their an obligation to offtake renewable electricity;
high-risk perception of renewable energy projects, balancing obligations and costs; liability for non-
partly owing to their limited understanding of the compliance; payment security instruments; the
technology. transfer of obligations to a new central supplier;
liability for unplanned disconnection from the
In addition, the country’s financial and banking grid; arbitration clauses; and a stated duration
sector is comparatively small, with limited resources. for the agreement.
Frequent problems in the financing sector, evidenced
by the collapse of three large banks, have affected 2. Procedure for transparent assignment of the
the banking sector’s activities in general. Hence, central electricity supplier, as the mandate of
scaling up renewable energy investment under the the current one is due to expire on 1 January
new policy support environment may be challenging, 2021. In case of a change of the central supplier,
as the financial sector may have difficulty in providing a smooth transition needs to be ensured
funding for the investments needed to achieve a total allowing the transfer of all obligations to the
capacity addition of 168 MW. new entity without impeding existing PPAs. A
change of the off-taker increases the actual and
Cost of capital is critical for the financial viability perceived risks faced by potential investors.
of projects, yet, local commercial banks’ products
may not match the specific requirements of capital- 3. Design a procedure for the transfer of all
intensive renewables projects, even though these existing renewable energy producers to
banks are becoming highly interested in this sector. the support system, with this based on a
The loans offered tend to be short term and at a high contract for difference, which is envisaged to
interest rate. Further strengthening of the related be implemented when the electricity market
regulatory framework, particularly in those areas (day-ahead and intra-day markets) is declared
that strongly affect the bankability of renewable liquid by the regulator.
energy projects, would increase financial institutions’
confidence in the market. • Enhance the capacity of local banks to facilitate
the financing of renewable energy projects
• Improve the bankability of renewable energy
projects While large-scale renewable power plants can
access the necessary financial resources from
Under the project financing scheme, renewable abroad – through the contributions of either
energy projects are considered bankable only foreign investors or international financial
when lenders are confident that the expected institutions – small-scale projects are limited to
revenue stream of the project can ensure the funding opportunities from the local financial
repayment of the loan, as per the terms of the market. The total cost of planned small-scale
lending agreement. Despite recent efforts by renewable energy projects to be supported
the government, the current framework is not through the feed-in tariff (for a total of 55 MW)
perceived as sufficient, as it seems to expose has been assessed to amount to approximately
potential investors to several risks. Therefore, EUR 50 million. Additional capacity could also
additional actions are required to improve be introduced through net metering projects
the bankability of renewable energy projects, of up to 200 kW. The availability of financing
including: for such projects, however, may be obstructed
by the limited knowledge of the renewable 4.5 Public awareness
energy sector and poor understanding of the
support mechanisms among local lenders who Due to technological developments and rapidly falling
appraise projects. Thus, technical support in, for costs, renewables are a viable energy choice for a
example, developing bankable project proposals growing number of countries, cities, companies and
and in structured finance principles, including households. The deployment of renewable energy is also
project finance, can increase the capacities of an effective tool to fuel economic growth, create new
local commercial banks. This support could be employment opportunities, enhance human welfare
facilitated by international financial institutions and contribute to a climate-safe future. Renewables are
that are well placed to provide such technical already a significant source of new employment, with
assistance. In addition, aside from long-tenor renewable energy jobs standing today at 10.3 million,
concessional loans provided at below commercial worldwide. Only a limited number of stakeholders in the
rates to local financiers, international financial Republic of Moldova, however, are aware of the socio-
institutions, such as development finance economic benefits that renewable energy can offer.
institutions (DFIs), can utilise hybrid, on-lending
and syndication structures to facilitate a more As the use of biomass for heating is perceived positively
active involvement from local investors. Such in the country and has allowed the development of a
structures include: significant number of local businesses around this
sector, the most advanced efforts to increase public
1. Mezzanine finance, whereby a DFI’s claim is awareness have occurred in the field of bioenergy.
subordinated to senior debt (provided by the Nevertheless, more needs to be done to increase the
local financier), but still senior to equity claims public acceptance and use of renewable energy to
on project cashflows. facilitate its long-run development.
2. On-lending structures, whereby DFIs can use • Develop a national communication strategy on
their high credit rating to borrow internationally renewable energy sources
at low rates and then on-lend the funds to
local financiers via credit lines, at lower rates Public awareness is necessary to influence political
than such financiers would otherwise face. decisions on strategies for the country’s future
development. A national strategy is needed to raise
3. Syndications (or co-financing) with local awareness and boost understanding of renewable
financiers to help spread the risks and energy sources and their benefits across the Republic
returns. This would also spread knowledge of of Moldova. This would also help consumers make
renewable energy financial structuring among more informed decisions regarding energy supplies and
a wider group of capital providers. DFIs should benefit from the opportunities offered by the sector.
be careful not to displace (i.e., crowd out) the
local private sector, or distort the market, but The strategy should address several stakeholders,
to instead act to crowd-in local investors and including state authorities, civil society, the banking
hence kick-start the local market. community and donors. It could envisage necessary
actions to ensure proper ways to disseminate the
Finally, public capital, including that provided most up-to-date information on renewables and the
by the DFIs, could be used to help de-risk or ongoing energy transition (e.g., a dedicated website,
lower the risk of renewable energy projects. This with translations of authoritative publications
would lower the cost of capital for renewables, into local language). It could also improve the
via the provision of risk mitigation instruments. curriculum of schools and universities to reflect
Such instruments could include: partial risk the growing role of renewables. At the same time,
guarantees for uncertain grid access; credit intensified government communication efforts on
guarantees to lower the power off-taker non- ongoing legislative changes would be beneficial for
payment risk; liquidity facilities to bridge short- stakeholders. This is especially so for local financial
term cash flow problems; and currency hedging institutions, as they prepare the relevant mechanism
instruments, to name but a few. to finance renewable energy projects.

References
ANRE (2018), Report on the activity of the National Energy Regulatory Agency in 2017, National Energy
Regulatory Agency, Chişinău, www.anre.md/files/raport/Raport anual de activitate a ANRE in anul 2017.pdf
(accessed 31 December 2018).
ANRE (2017), Decision No. 342 from 4 September 2017, National Energy Regulatory Agency, Chişinău,
http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=371365 (accessed 31 December 2018).
ANRE (2016), Annual electricity reports 2011-2016, National Energy Regulatory Agency, Chişinău.
www.anre.md/
Ceban, V. (2015), Development of renewable energy in the Republic of Moldova: realities, capacities,
options, perspectives, [Dezvoltarea energiei regenerabile în Republica Moldova: realităţi, capacităţi, opţiuni,
perspective], Association for External Politics, Foreign Policy Association, Chişinău.
EBRD (European Bank for Reconstruction and Development) et al. (2018), Competitive Selection and
Support for Renewable Energy: Policy Guidelines, EBRD and Development and Energy Community
Secretariat, in collaboration with IRENA, Vienna, 2018.
https://irena.org/-/media/Files/IRENA/Agency/Regional-Group/Europe/EBRD-EnCS-IRENA-RE-Auction-
Guidelines-2018---FINAL.pdf?la=en&hash=D38AE032CE412F784A687A113648E6488C22B81F.
EEA (2017), Report on the activity of the Energy Efficiency Agency in 2017, Energy Efficiency Agency,
Chişinău, https://mei.gov.md/sites/default/files/document/attachments/raportul_agentiei_pentru_
eficienta_energetica_pentru_anul_2017.pdf (accessed September 2018).
EEA (2016), Letter to National Bureau of Statistics No. 29-445 of August 17, 2016, Energy Efficiency Agency,
Chişinău, unpublished.
EnC (2018), Annual Implementation Report 2017/2018, Energy Community Secretariat, Vienna.
www.energy-community.org/dam/jcr:05c644e0-3909-4c26-84f5-e1cdb63e1af4/ECS_IR2018.pdf.
Energypost (2017), “Trading biomass like oil: Lithuania shows how it can be done”, Energypost.eu,
https://energypost.eu/trading-biomass-like-oil-lithuania-shows-how-it-can-be-done/
GCF (2017), “GCF gives green light to largest climate project to date in EBRD partnership”, Green
Climate Fund, www.greenclimate.fund/-/gcf-gives-green-light-to-largest-climate-project-to-date-in-ebrd-
partnership (accessed 31 December 2018).
Gropa (2017), Victor Gropa, Estimation of the impact of wind power on the system power of the Republic
of Moldova, Technical University of Moldova, Chişinău, www.cnaa.md/en/thesis/52069/
IRENA (International Renewable Energy Agency) (2019), Global levelised cost of electricity from utility-
scale renewable power generation technologies, preliminary results for 2018, IRENA Renewable Cost
Database, unpublished.
IRENA (2018a), Renewable capacity statistics 2018, Abu Dhabi,
www.irena.org/publications/2018/Mar/Renewable-Capacity-Statistics-2018.
IRENA (2018b), Renewable Power Generation Costs in 2017, IRENA, Abu Dhabi,
www.irena.org/publications/2018/Jan/Renewable-power-generation-costs-in-2017.
IRENA (2018c), Power System Flexibility for the Energy Transition, Part 1: Overview for policy makers, IRENA,
Abu Dhabi, www.irena.org/publications/2018/Nov/Power-system-flexibility-for-the-energy-transition.
IRENA, IEA and REN21 (2018), Renewable Energy Policies in a Time of Transition, IRENA, OECD/IEA and REN21,
www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_IEA_REN21_Policies_2018.pdf.
IRENA et al. (2017), Cost-competitive renewable power generation: Potential across South East Europe,
International Renewable Energy Agency, Joanneum Research and University of Ljubljana, Abu Dhabi,
www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/IRENA_Cost-competitive_power_
potential_SEE_2017.pdf.
IRENA and CEM (2015), Renewable Energy Auctions – A Guide to Design, IRENA, Abu Dhabi,
www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/Jun/IRENA_Renewable_Energy_
Auctions_A_Guide_to_Design_2015.pdf.
Lupusor, A. et al. (2016), Moldova Economic Growth Analysis, Expert-Grup, Chişinău,
www.expert-grup.org/media/k2/attachments/MEGA_XIV_-_April_2016_EN.pdf.
MoEI (2018a), Overview of the energy sector and renewable energy developments in the Republic of
Moldova, presented by Mr Denis Tumuruc, Deputy head of Energy Policies Department, Ministry of Economy
and Infrastructure, at the Expert Consultation Workshop, 4 June 2018, MoEI, Chişinău, unpublished.
MoEI (2018b), General overview of the sector and its competitive advantages, presented by Mr. Vitalie
Iurcu, State Secretary, Ministry of Economy and Infrastructure, at the Moldova Business Week, 28 November
2018, MoEI, Chişinău, www.mbw.md/en/presentations/ (accessed 31 December 2018).
MoEI (2018c), Renewable energy share for 2017, MoEI, Chişinău, unpublished.
MoEI (2018d), Information provided by Ministry of Economy and Infrastructure, December 2018,
unpublished.
MoEI (2017), Security of Supply Statement of the Republic of Moldova, MoEI, Chişinău.
www.energy-community.org/dam/jcr:038ab4ac-868f-4103-92c3-006fd19a9f0b/2017_SoS_ML.pdf
Moldelectrica (2018), Indicatorii tehnico-economici, www.moldelectrica.md/ro/network/annual_report
NBM (National Bank of Moldova) (2018), Official exchange rates for years 2013-2017, NBM, Chişinău,
www.bnm.md/en/content/official-exchange-rates (accessed 31 December 2018).
NBS (National Bureau of Statistics) (2018), Energy balance of the Republic of Moldova for 2017 year,
NBS, Chişinău, www.statistica.md/public/files/publicatii_electronice/balanta_energetica/BE_2018_eng.pdf
NBS (2017), Population and demographic processes, NBS, Chişinău, http://statbank.statistica.md/
pxweb/pxweb/en/20 Populatia si procesele demografice/20 Populatia si procesele demografice__
POP010/?rxid=b2ff27d7-0b96-43c9-934b-42e1a2a9a774 (accessed 31 December 2018).
NBS (2012), Energy balance of the Republic of Moldova for 2011, NBS, Chişinău,
www.statistica.md/public/files/publicatii_electronice/balanta_energetica/BE_2012_eng.pdf.
OEC (2016), Observatory of Economic Complexity, https://atlas.media.mit.edu/en/profile/country/
mda/#Economic_Complexity_Ranking (accessed 31 December 2018).
UNDP (United Nations Development Programme) (2018a), Energy and Biomass (Phase 1), UNDP Moldova,
www.md.undp.org/content/moldova/en/home/operations/projects/climate_environment_energy/
proiecte-finalizate/moldova-energy-and-biomass-project01.html (accessed 31 December 2018).
UNDP (2018b), Energy and Biomass (Phase 2), UNDP Moldova, www.md.undp.org/content/moldova/en/
home/projects/moldova-energy-and-biomass-project2.html (accessed 31 December 2018).
UNDP (2017), Energy and Biomass Newsletter, No. 36, November-December 2017, www.md.undp.org/
content/moldova/en/home/library/climate_environment_energy/energy-and-biomass-newsletter/energy-
and-biomass-newsletter--no-36.html (accessed 31 December 2018).
UNDP and ECS (2016), Energy consumption in households, Results of the Survey on energy consumption,
UNDP Energy and Biomass Project and Energy Community Secretariat, www.md.undp.org/content/dam/
moldova/docs/Publications/Energy consumption households.pdf (accessed 31 December 2018).

UNDP (2010), Project Document, UNDP, www.md.undp.org/content/moldova/en/home/projects/
moldova-energy-and-biomass-project2.html and www.md.undp.org/content/dam/moldova/docs/Project
Documents/ProDoc_Biomass.pdf (accessed 31 December 2018).
UNECE (United Nations Economic Commission for Europe) (2009), Republic of Moldova: National
Energy Policy Information for Regional Analysis, Financing Energy Efficiency Investments for Climate
Change Mitigation, UNECE, New York and Geneva, https://docs.google.com/viewer?docex=1&url=http://
www.clima.md/public/102/en/EnergyPolicyInformationForRegionalAnalysisMoldova.pdf
UNFCCC (United Nations Framework Convention on Climate Change) (2017), The Interim NDC Registry,
UNFCCC, www4.unfccc.int/ndcregistry/Pages/All.aspx (accessed 31 December 2018).
WB (World Bank) (2018a), Doing Business 2019, The World Bank Group,
www.doingbusiness.org/en/data/exploreeconomies/moldova (accessed 31 December 2018).
WB (2018b), GDP per capita indicator, WB. Creative Commons Attribution 4.0 International License (CC BY 4.0),
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=MD (accessed 31 December 2018).
WB (2015), Moldova Electric Power Market Options Sector Study, WB, Washington DC,
www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwjqkKrCic3eAhUDixoKH-
cPeDvYQFjAAegQICRAC&url=http%3A%2F%2Fmd.one.un.org%2Fcontent%2Fdam%2Funct%2Fmoldo-
va%2Fdocs%2Fdevmeetings%2F2015%2F4june%2FMoldova_ELectric_Power_Market_Options_Study.
pptx&usg=AOvVaw17xHzDhXkSxB0Nhp6GOdKf (accessed 31 December 2018).
Annex. Key development steps for
renewable energy projects in the
Republic of Moldova
Renewable energy power plants Renewable energy power
with capacity of 5 MW and higher for plants with capacity below 5 MW
public consumption and 20 MW and for public consumption and below
No. higher for internal use 20 MW for internal use
Key development steps
Establishing the business

Competent institution: Public Services Agency
1
Other institutions involved: National Commission for Financial Market (only in the case of Joint
Stock Companies), State Tax Service of the Republic of Moldova
Registration of property rights

2 Competent institution: Public Services Agency
Other institutions involved: State Property Agency
Change of land destination from agricultural land to land for construction purposes
Competent institution: Government of Moldova or Local Public Administration
2.1 Other institutions involved: Central or local public authorities, Design Institute for Territorial
Planning, State Environmental Inspectorate of Moldova, General Inspectorate for Emergency
Situations, National Public Health Agency, Public Services Agency
Urban Planning Certificate for Design Documentation
Competent institution: Local public authority
3 Other institutions involved: National Public Health Agency, Agency for Environment
(Protection), General Inspectorate for Emergency Situations, Design institute “Urbanproiect”22
or “Chişinăuproiect”23
Technical conditions for connection to utility networks

Competent institution: All responsible utility companies (water supply and sewage, electrical,
3.1
gas, heat, telecommunications distribution networks and other utilities)
Other institutions involved: Local public authority
Networks Routing Plan

3.2 Competent institution: Local public authority
Other institutions involved: Not applicable
Topographical study and geotechnical prospecting

3.3 Competent institution: Licensed institutions
22 For all localities except Chisinau city.

23 Only for Chisinau city.

Environmental Permit/ Environmental Impact Assessment24

3.4 Competent institution: Agency for Environment (Protection)
Detailed designing
4 Competent institution: Licensed institutions
Detailed design verification and approval

Competent institution: Agency for Technical Supervision, chief architect from the local public
4.1
authority and experts or institutions authorised for verification of design documentations
Other institutions involved: State Environmental Inspectorate, National Public Health Agency
Construction authorisation
Competent institution: Local public authority
5
Other institutions involved: Agency for Technical Supervision, Agency for Environment
(Protection)
Obtaining the fixed price or fixed tariff25

6 Competent institution: Government of Moldova, ANRE
Approval to build a new renewable energy

power plant with capacity above 20 MW and
increase in capacities above 2026
6.1 Competent institution: Government Not applicable
of Moldova, Ministry of Economy and
Infrastructure
Communication of construction works launch

7 Competent institution: Agency for Technical Supervision
Other institutions involved: Agency of Inspection and Restoration of Monuments
Power plant construction

8 Competent institution: Licensed company
24 Thermal power plants, industrial and heating boiler plants with capacity of 300 MW and above; complex hydrotechnical structures (ports, big dams and water storage
facilities); industrial sewage and wastewater treatment facilities in urban and rural areas, with a discharge of 10,000 cubic metres per day and higher; waste treatment and
incineration plants; any construction activity in river basins, within river and water basin protection areas; power transmission lines with a voltage level of 330 kV and higher,
wind farms with a height bigger than 20m, etc.
25 The difference between “fixed tariffs” and “fixed prices” supporting schemes is being determined by the power plant capacity and capacity limits set by the Government
through its decision no. 689 as of 11.07.2018
26 According to a MoEI initiative on amending national legislation related to power generation, launched in 2018, renewable energy project developers that won the tender
receive the government approval mentioned at pt. 6.1 automatically (ex officio).
Connection to power transmission or distribution network

9 Competent institution: Power transmission and/or distribution company
Testing and acceptance

Competent institution: Beneficiary/Investor
Other institutions involved: ANRE, Agency for Technical Supervision, National Public Health
10 Agency, State Environmental Inspectorate, Power Transmission or Distribution Company,
Local Public Authority, General Inspectorate for Emergency Situations, Designing Institution,
Construction Licensed Company, National Bureau of Statistics, Territorial State Tax
Inspectorate, Central Electricity Supplier
Power generation licence

11 Competent institution: ANRE Not applicable
Signing of the electricity supply contract

Competent institution: Central Electricity Supplier
11.1
Licence registration with the system operator27

Competent institution: Power transmission
11.2 Not applicable
company
Entering into force of the electricity supply contract and into operational phase
Competent institution: Central Electricity Supplier
12
Source: MoEI (2018d)
27 Moldelectrica, which holds the license for electricity transmission and dispatch services in the Republic of Moldova.

IRENA RRA Moldova 2019 EN

Uploaded by

Copyright:

Available Formats

IRENA RRA Moldova 2019 EN

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IRENA RRA Moldova 2019 EN

Uploaded by

Copyright:

Available Formats

Copyright © IRENA 2019

II Renewables Readiness Assessment

Republic of Moldova III

IV Renewables Readiness Assessment

1.2 Renewables Readiness Assessment 2

2.2 Legal and regulatory framework 6

2.3 Energy development plans 8

2.4 Power system 9

2.5 Organisational structure of the energy sector 14

3. Renewable energy development 17

3.2 Renewable energy support mechanisms in the power sector 24

3.3 Financing of renewable energy 28

VI Renewables Readiness Assessment

4.2 Regulatory environment for renewable power investments 33

4.4 Financing of renewables 37

4.5 Public awareness 38

Annex. Key development steps for renewable energy

Republic of Moldova VII

VIII Renewables Readiness Assessment

X Renewables Readiness Assessment

The 2017 report from the International Renewable Energy Agency

At the same time, the Republic of Moldova heavily depends on

Despite abundant resources, deployment of renewables has been

The deployment of biomass continues to provide employment

In recent years, the Republic of Moldova has stepped up efforts

XII Renewables Readiness Assessment

Republic of Moldova XIII

XIV Renewables Readiness Assessment

The deployment of renewables is an effective tool

A national strategy is needed to raise awareness

This strategy should address several stakeholders,

XVI Renewables Readiness Assessment

The Republic of Moldova, with its capital city of Chisinau, is a land-

After gaining independence on 27 August 1991, following the collapse

Several reforms carried out in recent years have positively impacted

In 2010, the Republic of Moldova joined the Energy Community, an

The country has recently been experiencing economic recovery,

MDL to USD exchange rate

2 Renewables Readiness Assessment

Box 1. IRENA’s South East Europe Initiative

As part of IRENA’s increasing engagement with Figure 2. High-Level Meeting on Renewable

The meeting served as a platform to discuss the

The meeting resulted in the issuance of the Abu

4 Renewables Readiness Assessment

The total primary energy supply of the Republic of Moldova

Final energy consumption in 2017 was 2 671 ktoe, equivalent to

776 812 937

962 930 885 834 850 816 837 836

116 120 116 150 95 102 75 105

Source: NBS (2018)

Residential Industry MGRES Local CHPs

Source: NBS (2018) Source: ANRE (2018)

6 Renewables Readiness Assessment

Figure 6. Objectives of the Energy Strategy until 2030

Developing competitive Ensuring sustainability of the

4 The document is under revision – as of December 2018.

8 Renewables Readiness Assessment

Power generation of 610 MW (MoEI, 2017). The maximum load for

Solar water heaters, “Povestea” kindergarten in Nisporeni