Weekly Roundup: State of Energy Emergency
December 12, 2024
Moldova Prepares for a State of Emergency
Today Prime Minister Recean asked parliament to declare a state of emergency in the energy sector. The parliament is considering the request and is expected to vote on a state of emergency today.
This declaration followed a government decision on December 11th to propose a state of emergency to parliament and the approval of a crisis management plan. The government conducted an energy threat assessment based on the ENTSO-E European standard that identified around 3 dozen threats to national energy security.1 These considered various crisis scenarios including Russia cutting off gas to Transnistria, unseasonably cold weather, shortages in electricity, sabotage, human error and more.
The #1 threat identified, ruled as “very high” probability, was a cutoff of natural gas supplies to Transnistria and resulting electricity shortage.
As discussed in our previous article, a partial or total shutdown of the MGRES power plant in Transnistria due to a lack of gas would force Moldova to import most of its electricity from Romania via power lines that run through Ukraine. In the first part of December Moldova is getting 37% of its electricity from MGRES, 35% from Romania and 27% from local production - mostly Thermoelectric plants. MGRES provides substantial load on the Romania - Ukraine - Moldova transmission system and if it is shut down both Moldova and Ukraine will face a much more unstable power grid. Strikes on infrastructure in Ukraine will further unbalance this system and could potentially cut off both countries from Romania while the system undergoes repairs.
In his appeal to parliament Prime Minister Recean highlighted the risks facing the country from January 1st saying:
"A much more complicated situation may arise than in November 2022, when the Russian Federation's bombing of Ukraine significantly damaged the neighboring country's energy infrastructure. As a result, Ukraine stopped exporting electricity, and MGRES completely stopped supplying electricity to the Right Bank,"
Recall that November 2022 saw nationwide blackouts in Moldova.
The government’s crisis management plan clearly envisions the possibility of rolling blackouts. In it, they create a priority list of infrastructure that will receive power in the case of planned outages due to power shortfalls. The priority list is as follows:
Hospitals, medical centers, the national Blood Transfusion Center, the National Agency for Public Health, orphanages and kindergartens
Central heating stations, natural gas metering and pumping systems
Energy and Utility dispatchers
Government, parliament, key ministries (related to security)
The airport and other national infrastructure
Moldova’s hospitals began testing generator capacity this week in preparation for total power outages.
On December 11th Transnistria also declared a state of emergency in the energy sector. The plan envisions rolling blackouts depending on demand, calls on companies to conserve energy and gives the “authorities” the power to break contracts and stop energy exports.
The Messaging War
Underlying the headlines, which are focused on the technical details of the energy crisis and what steps are (or aren’t) being taken, there is a fundamentally political problem. This entire crisis is artificially generated by the Kremlin as part of their attack on Moldova. We don’t know what the Kremlin’s political aim is or how far they are willing to go. It is possible that they will only reduce gas flows to Transnistria enough to cause electrical shortages in Moldova. It is possible that they will cut off the gas entirely and trigger a humanitarian crisis in Transnistria in addition to the electrical shortages in Moldova. We don’t know, but it seems fair to assume that the main goal is to pin the blame for this mess on the Moldovan government.
In this, they are succeeding. The Prime Minister’s sacking of top energy officials last week has ignited a feeling of crisis and blame casting. Victor Binzari, CEO of Energocom had resisted calls for him to resign but was removed this week by the company’s board of directors. There is a widespread feeling that someone made a huge mistake by not sufficiently stockpiling gas for the winter months.2
This feeling of crisis has been compounded by complaints about the government’s new energy bill compensation plan for the winter. This plan requires people to apply online where they receive a status ranging from “Very Vulnerable” to “Not Vulnerable” based on a variety of criteria. This year compensation is given as a cash payment around 2 weeks after the bill is paid - a plan that allows people to first experience sticker shock and then become furious that their compensation is too low.3
With compensation just coming out for November people have furiously taken to social networks posting about pensioners, veterans, poor people, etc are all getting 300 lei or nothing at all. The government had previously signaled that compensation would be between 300 and 800 lei without much clarity as to how the determination was made.
One of the more humorous posts was from journalist Maxim Pulber:
"If last year I was in the category of average vulnerability, now I am invulnerable. My income has not increased (significantly) (…), I live in the same two-room apartment, (…), but it seems that life in Moldova has hardened me so much that I have become simply invulnerable,"
The government has scrambled to try explain what is going on - namely that the gas tariff in November was 13.12 lei / cubic meter and that based on an estimated household consumption a 300 lei compensation brings the price down to 11 lei / cubic meter. Prices for gas will go up in December so compensation will also go up to maintain the 11 lei / cubic meter price. This is cheaper than last year (12 lei / cubic meter) so people should be happy.
They aren’t.
In a highly complex scenario the person with the easiest story - and a clear person to blame - usually carries the day. Russia’s story is simple - if Moldova just asks politely for gas (and accepts major political conditions) everything is fine! The Moldovan government is to blame.4 Transnistria is also now blaming the Moldovan government for Russia threatening to cut off the region’s free gas supply. There is no comparably simple political message coming from the Moldovan government which seems to be in a state of disarray.
The combination of high prices, efficient Russian propaganda and government mistakes is looking to cost PAS dearly this winter.
Other Important Stories
To say that the impending energy crisis and Romanian elections have been the dominant stories of the past weeks would be a major understatement. At the same time there are other stories that are important for us to keep track of. Here’s a quick roundup of the most important news:
Moldova expresses support for Georgian protestors. President Sandu has expressed clear support for the protestors in Georgia saying that "Georgians are Europeans” and that “Moldova condemns violence against peaceful demonstrators and stands in solidarity with President Salome Zourabichvili and the Georgian people in their fight for freedom." Protests continue to roil Georgia after elections that the EU does not recognize as free and fair resulted in a pro-Russian government that stopped all steps towards EU membership.
More drones continue to crash in Moldova. As before these appear to be radar decoys without an explosive payload. The EU has promised Moldova delivery of unspecified anti-drone systems in the future.
Prime Minister Recean responded to a question about whether the country will ban Tiktok following the events of the Romanian election saying:
"We work with all platforms, including TikTok. We have already seen improvements in cooperation with TikTok, Facebook, Instagram, and even Telegram. […] As long as we cooperate, these platforms are welcome. We should not completely close platforms if they correct themselves, respond to requests from authorities or society to close an account that, for example, promotes lies, or an account that distorts reality, or an account that promotes war,"
President Sandu was awarded with the Reinhard Mohn Prize for “exemplary commitment to the protection and promotion of democracy.” The President stated that the award “confirms the courage of Moldovan citizens who fought for democracy.” She says that she will donate the bulk of the 100,000 euro prize to projects in her native village of Risipeni.
MP Vasile Bolea of the Pobeda (Victory) block may be removed from parliament. Investigators have found major discrepancies between his expenditures and income and have referred the case to prosecutors. If convicted he faces confiscation of property, loss of his mandate5 and a ban on holding public office for 3 years. Bolea denies the results of the investigation and plans to challenge them.
Representatives of the extra-parliamentary Impreuna Block of pro-EU opposition parties called for the resignation of Prime Minister Recean. Party representatives called on MoldovaGaz CEO Vadim Ceban for “deliberate sabotage, aimed at creating an energy crisis and then a political crisis” and called on the Prime Minister to resign for providing the CEO with “political cover.”
Chisinau Mayor Ion Ceban began a city hall meeting by reading a list of the names of 8 journalists and vloggers and attacking them saying:
"I keep looking at the media, at the 'trolls' of the Action and Solidarity party, I invite these clowns, who kiss the authorities' ****, to go to the districts and villages of Moldova and see how things are there. [...] I ask these citizens and other PAS dogs to come out and see what is really happening in Moldova while they are trying to change the diapers of this government, full of you know what, and then express their opinion,"
The mayor’s attacks were condemned by a long list of press associations who called on the mayor to stop attacking the free press, and for those journalists named to seek remedy in court.
The government has proposed a new law regulating operations of the Constitutional Court (CC). Under the proposals, which were developed in part based on European Union norms and recommendations, the CC would gain more autonomy to set their own rules and procedures. Judges of the CC would be required to resign their memberships in political parties and could face new sanctions for ethical breaches up to and including removal from the court. Judges would also see increased pensions, new powers of oversight regarding international treaties and a right to appeal to the European Court of Human Rights for advisory opinions in areas affecting European Convention on Human Rights.
The Bucharest Stock Exchange will open a new exchange in Moldova called the Chisinau Stock Exchange. The Ministry of Economy announced this news and that the government will participate in the creation of the exchange as a shareholder. The new exchange will provide opportunities for for Moldovan companies to access financing and for Moldovan investors, individual and institutional, to invest in the economy.6
The only threats from the ENTSO-E framework that were ruled out totally were volcanic eruptions and nuclear accidents. So we have that going for us.
This is a simplification, Moldova isn’t short of natural gas. Sure, there isn’t enough at good prices - which is a problem. But the country won’t run out of gas. Transnistria *is* at risk of running out of gas. If Moldova had lots more gas stockpiled it is conceivable that some could be sold to Transnistria in exchange for electricity - but they would need to be a willing partner. More critically, if Moldova was fully prepared for this eventuality the Kremlin wouldn’t be pushing these buttons (they would find others). This is not to say there isn’t fault in the Moldovan government (it seems there is) but that the core issue isn’t gas or electricity, it’s Russia.
The old system factored right into the bill saying how much the government saved you. The new system is technically much better - easier to implement, cheaper administration, better handling of edge cases (people heating with wood, etc). But it is proving to be politically disastrous.
Ironically, Georgia’s breakaway region of Abkhazia is currently experiencing the Russian “solution” to this problem. Abkhazia recently refused to sign Russian legislation giving preferential investment and property rights over the region to Russian oligarchs. Russia then cutoff all aid to their client region including all energy exports - which, like Transnistria, were previously highly subsidized / free. Abkhazia now has power for 2 hours 20 minutes twice a day with schools and other institutions closed indefinitely.
This assumes that he would be convicted before the elections in Summer. Based on prosecutors past track records the chance of him being convicted before parliamentary elections in 2029 seems doubtful.
If you’re curious about Moldova’s own failed experiment with a stock exchange see my article from 2021.