Moldova imports roughly ninety four percent (94%) of the resources necessary to cover its national energyconsumption. Improved energy efficiency therefore represents a path towards ending this dependency onimported energy and improving Moldova's energy security profile for the benefit of future generations.
The legal framework regulating energy efficiency in the Republic of Moldova mainly includes Law No.160/2007 on Renewable Energy which is applicable until 25 March 2017. After this date, new and moreprogressive legislation will be enforced, specifically Law No. 10/2016 on Promoting Renewable EnergyUse, which transposes Directive 2009/28/EC of the European Parliament and of the Council of 23 April2009 on the promotion of the use of energy from renewable sources and amending and subsequentlyrepealing Directives 2001/77/EC and 2003/30/EC. The latter essentially sets forth the primary regulationsconcerning renewable energy sector activities and methods of organising production and sale ofrenewable energy and fuel.
Law No. 142/2010 on Energy Efficiency ("Law") is meant to create an appropriate background for theimplementation of EU Directive 2006/32/EC of the European Parliament and the Council, from 5 April 2006on Energy End-use and Energy services, repealing Council Directive 93/76/EEC. The Law establishes thepremises for energy efficiency improvement, implicitly by supporting business structures involved indeveloping and implementing programmes, plans, energy services, and other energy efficiency measures.
Equally important is Government Decision No. 833/2011 approving the National Programme on EnergyEfficiency 2011-2020 and Government Decision No. 102/2013 approving the Energy Strategy of theRepublic of Moldova 2030, both outlining pertinent, specific targets regarding energy efficiency, along withother relevant normative documents and regulations.
Moreover, in November 2013, Moldova initialled the EU Association Agreement (AA), whereby energyefficiency is identified as a key area of cooperation, referring to domains such as: (i) energy policies andstrategies; (ii) development of competitive, transparent and non-discriminatory markets according to EUstandards and the Treaty Establishing the Energy Community; (iii) development of an attractive and stableinvestment climate by tackling institutional conditions, legal, tax and related aspects; (iv) energyinfrastructure and projects of common interests by facilitating investments through loans and grants; and(v) scientific and technical cooperation.
Even though the existing legislation is intended to increase energy efficiency and mitigate the negativeimpact of the energy sector on the environment, Moldova still remains open to regular dialogue in theseareas as it moves to align its legislation with the EU regulations and related international standards.
2. Specific Provisions of the Law
The main solutions envisaged by the relevant legislation are the following:
-Implementation of advanced energy production technologies, such as cogeneration and trigeneration,distribution, transportation and use of energy and fuels is to be accomplished by applying energyefficiency standards for installations, buildings, machinery and equipment, as well as compliancesupervision;
-Promoting of private initiative and energy service companies that contribute to optimising theexploitation of energy systems based on energy performance contracts;
-Support of cooperation between producers, transporters, distributors, suppliers and energy consumersin order to correlate the common interests and attain the objectives of State policy on energy efficiency;
-Training at all levels of decision-makers to identify and achieve energy efficiency measures;
-Raising awareness and involving the civil society in the decision processes regarding energy efficiencymeasures and their implementation;
-Compulsory energy audits in an exhaustive list of cases, under specific procedures and requirements,especially if the audits are financed by the Energy Efficiency Fund, or the State and public localauthority’s budget; and
-An institutional framework consisting of the following authorities: the Ministry of Economy, the Agencyfor Energy Efficiency, the Energy Efficiency Fund, the National Energy Regulatory Agency.
National Energy Efficiency Action Plans
The main objectives of the Energy Conservation Programme for the years 2003-2010 were: restoringelectricity supplies, preventing continuous collapse of the heating sector, increased consumption of naturalgas by substituting out of coal consumption (a rather rudimentary approach which served as a primarybasis for the next strategies, especially for drafting the legal regulatory framework to ultimately stimulateeffective energy consumption). The programme was to achieve annual savings of 43.4 ktep or eighteenpercent (18%) of the consumption in 2002 as reference year.
According to the provisions of the National Efficiency Action Plan for 2013-2015, all District and MunicipalCouncils (local authorities) must have developed and approved action plans and regional energy efficiencyprogrammes for further implementation. Moldova has committed to reduce final energy consumption in allsectors of its national economy by one point eight (1.8) percentage points (p.p.) annually compared to thereference year 2009. Thus, these proposed measures were considered to be quite innovative.
Meanwhile, the National Efficiency Action Plan for 2011-2020 targets natural gas reduction in the energystructure and increasing the corresponding renewable energy quota, by stimulating the use of energy fromrenewable sources (RES) relative to total gross domestic consumption: twenty percent (20%) in 2020, withan interim target of ten percent (10%) in 2015; and ensuring the percentage of all fuels will include, bio-fuels of ten percent (10%) in 2020, with an interim target of four percent (4%).
As far as energy efficiency is concerned, the State intends to:
-reduce energy intensity by ten percent (10%) in 2020;
-reduce losses in transmission and distribution by up to eleven percent (11%) in 2020 (thirteen percent(13%) in 2015) for electricity, by thirty nine percent (39%) in 2020 (twenty percent (20%) in 2015) forgas, and by five percent (5%) in 2020 (two percent (2%) in 2015) for heat;
-reduce emissions of greenhouse gases (compared with 1990) by twenty five percent (25%) in 2020;
-reduce energy consumption in buildings by twenty percent (20%) in 2020; and
-increase the share of energy efficient renovated public buildings by ten percent (10%) in 2020.
Preliminary calculations indicate that energy efficiency is two point six (2.6) times lower than in theEuropean Union, resulting in significant financial losses. Therefore, national targets for improving energyefficiency and increasing the use of renewable sources for 2020 are set at ambitious levels. Specifically,these targets are set in accordance with the European Union while following the decisions,recommendations of the Energy Community, with Moldova recognising the benefits and undertaking theefforts.
The strategy targets 2020 as the year by which Moldova will achieve full integration into the internalenergy market of the European Union. Therefore, the country's legislation will be timely harmonised withthe Energy Community acquis and converged with the EU acquis, thus ensuring legal and regulatorycompatibility with these markets.
The Energy Strategy for 2030 reflects the European targets and sets highly progressive objectives,particularly oriented towards attracting investments, emergence of competitive markets as well as ensuringincreased use of renewable energy (scenarios for long-term availability of technology for carbon captureand storage); improving energy efficiency; introduction of smart electricity grids, etc.
Sectoral Operational Programmes
One of the most important implemented programmes (2011-2014), aimed to contribute to the creation of asustainable and competitive renewable energy production, called the Energy and Biomass Project, whichwas oriented especially towards the heating system and households in rural areas. It laid the foundationfor the creation of functional biomass markets that remained viable even after its implementation.
Training programmes and a special national awareness campaign combined with school educationprogrammes were intended to change consumers' attitude towards renewable energy. Financial supportwas allocated by the European Commission and UNDP Moldova. Modern biomass based central systemswere installed in 123 public institutions located in rural areas, the costs for heating was reduced by at leastthirty percent (30%) for more than 37,000 inhabitants.
Regarding wind power, until 2014 some 25 wind projects were installed, along with 4 other investmentprojects in this domain. These wind plants however, have a low installed power, and are used mostly forsmall enterprises, farms, and vineyards. Also, 10 wind units, of 10 kW each, were installed forexperimental purposes by the Technical University of Moldova. A country wind map has been executed inorder to facilitate and stimulate new projects in the field.
With regard to solar energy, a Japanese project for the Institute of Oncology has been implemented. Solarpanels were installed, both on the roof and on the ground (on a surface area of 8,000 m²), with a capacitycovering thirty percent (30%) of the total necessary amount for this Institute. The number of solarcollectors is continuously growing since Moldova enjoys an average of 240 sunny days per year.
One of the most successful and recognised events promoting energy efficiency in the Republic of Moldovais the "Eco-Energetic Gala". The goal of the contest is to support initiatives in the production,transportation, distribution and promotion of modern technology in the field of renewable energy.
The Agency of Regional Development implemented various Regional Energy Efficiency Programmes forSectorial Development.
EBRD provides funds through two credit methods: MoSEFF and MoREEFF. The financing line MoSEFFcombined a credit line of EUR 43 million, with a grant component ranging between five percent (5%) totwenty percent (20%) for lending Moldovan companies through EBRD partner banks (local banks). Eligibleprojects must identify targets to reduce primary energy consumption, reduce CO2 emissions and improvethe rational use of energy resources in industrial, agribusiness and commercial buildings.
MoSEFF also provides technical assistance for projects through Fichtner – a leading German company inthe field of engineering and consulting. To make investment in energy efficiency and renewable energysources more attractive, MoSEFF provides grants for eligible projects. The main objective of these grantsis to ensure economic viability and feasibility of high-quality projects. Another objective is to encourage theapplication of advanced technologies in Moldova. This is achieved by offering higher grants for projectsusing the Best Available Techniques (BAT).
To date, 2,036 loans have been granted for energy efficiency projects through the MoREEFF programmewith a total value of EUR 6,817,436 and investment incentives of EUR 1,871,905. The projects concernenergy efficient windows, insulation of walls and floors, solar water heating, biomass boilers and stoves,heat pumps systems, etc. Therefore due to MoREEFF, around 15,509 MWh/per year was saved andfunding projects helped to reduce CO2 emissions by 3.521 tons per year.
There are numerous opportunities for energy efficiency advancement: (i) in buildings (building envelope,electrical appliances, lighting options, maintenance of the energy system, energy management); (ii)opportunities for municipal energy efficiency (street lighting systems, waste water treatment); and (iii)opportunities for using wind energy, biomass and biogas systems, solar water heaters, heat pumps, etc.
Obligations set forth by the law refer to energy managers, energy service rendering, energy reports,supervision, monitoring and reporting.
District and Municipal Councils must appoint certified energy managers responsible for planning andmonitoring the implementation of measures to improve energy efficiency, including those contained inprogrammes to improve energy efficiency, energy savings record.
Energy managers carry out energy consumption analyses at least once a year in order to determinepossible interventions for improving energy consumption, in accordance with the standard developed bythe Energy Efficiency Agency ("Agency"). Energy distributors and suppliers present data reports onenergy consumption to the Agency every three (3) years, in order to develop the national plan, followingand filing out a standard form.
Energy Service Companies provide energy services based on energy performance contracts, in which thefollowing is to be stipulated:
-primary energy consumption before the services rendered that are the subject of the contract;
-the energy savings guaranteed and procedures for achieving them;
-arrangements for works financing; and
-ways to recover investments made by the company’s management, or, where appropriate, by thirdparties.
Energy distributors, distribution system operators as well as energy suppliers will not undertake anyactivity that would hinder the development of the energy services market and conduct other measures toimprove energy efficiency.
Compulsory insurance of metrology records for the entire volume of energy resources extracted,transformed, transported, stored, distributed and consumed is to be made by approved measuringinstruments, metrologically verified and included in the State Register of measuring instruments permittedfor use in the Republic of Moldova. Energy savings in the country are calculated based on a methodologyapproved by the Government.
The Agency carries out supervision and monitoring of energy efficiency improvement programmes fornational and local action plans and their implementation.
The Moldovan Tax Code provides incentives in order to consolidate the efforts towards sustainabilitycombined with economic growth.
The Government Decision on the Regulation of Energy Audit No. 884/2012 is the legal basis fordetermining the objectives, sequence of audit phases in all economy sectors, as well as preparation,execution and results presentation.
For instance, it should be noted that companies are required to cover the costs for audits, as these willeventually be recuperated though efficiency savings.
The cost of the energy audit is determined under conditions of free competition and transparency anddepends upon the volume and complexity of the audited subject.
There are no established criteria on how large a company must be in order to be audited, but it can beconcluded that it is not addressed/recommended to small or medium enterprises. In the Republic ofMoldova a large enterprise has more than 250 employees and has profits exceeding MDL 50 million.
The applicants must submit the following documents for auditing: the specification book; commercial andtechnical reports on energy resources; contracts with energy suppliers; supply schemes and accounting ofenergy resources; invoices for the consumption of energy resources; construction execution projects; dailyschedules, weekly and monthly tasks; data on production volumes, prices and tariffs; the technicaldocumentation of technological and auxiliary equipment (technological schemes, diagrams, maps regime,operating specifications, regulations, etc.); reports on repairs, commissioning, testing and energyefficiency measures; long-term programmes for more efficient use of energy resources; and the projectdocumentation for technological improvements and organisational development plans of the company. Theinformation collected will be registered in a questionnaire drawn up by the energy auditor who willselectively check the veracity of information provided by the customer. In preparing the questionnaire, theguidelines stipulated by the law will be used, where appropriate.
In order to attract investments for the development and modernisation of the energy sector, an InformationCentre for information in the field of renewable energy and energy efficiency was instituted under theEnergy Efficiency Agency. A statistical database on energy efficiency and renewable energy sources, aswell as the communication strategy developed and implemented energy efficiency and renewable energysources were also created, making it possible to conduct various events, seminars, workshops andtrainings in the field.
National Programme for Energy Efficiency 2011-2020, approved by Government Decision No.833/2011, generally encourages the best allocation of resources and aims to provide a stable integratedframework with the following general sectorial objectives:
-The electricity sector
-stimulating investments in electricity production;
-promotion of electricity production from RES; and
-promotion of household appliances and energy-related products which correspond to the EU energyefficiency standards.
-Natural gas sector
-examination of the National Gasification Programme through the use of the opportunities offered byRES. Local authorities, with the support of Energy Efficiency Agency will study the potential andpossibility and use of biogas for public buildings; and
-examining the possibility of using the difference in pressures from the transmission and distributionof natural gas for electricity production.
-Thermal energy sector
-reducing losses in transportation and distribution systems;
-optimising the existing capacity of production of thermal energy;
-use of renewable thermal energy purposes;
-promotion of cogeneration as a measure to save energy. To this end, the central public authorityresponsible for managing the thermal energy sector will promote high-efficiency cogenerationbased on useful heat demand. Efficient use of energy from cogeneration will contributepositively to the security of energy supply, considering the potential benefits of cogenerationwith regard to saving primary energy, avoiding network losses and reducing emissions,especially greenhouse gas emissions;
-reducing and optimising energy use heat to final customers;
-diversification of energy for hot water, heating and cooling;
-improving the regulating of indoor climate; and
-effective promotion of new technologies and equipment designed to help reducing heatconsumption.
-stimulating investment in the industrial sector regarding technological retooling plants with low yield;and
-use of equipment, machinery and technology with lower power consumption.
-The construction sector
-rational use of natural resources, petroleum products, natural gas and solid fuels;
-reducing carbon dioxide emissions;
-management of energy demand in buildings;
-improving the security of energy supplies in the medium- and long-term;
-the development of administrative, legal and financial potential, in order to enable widespreadimplementation of a complex of energy efficiency measures in housing; and
-public and private sector incentives for investments in energy efficiency in housing.
-The transport sector
-promoting bio-fuels as a blending component for traditional fuels, which will contribute to a gradualreduction in CO2 emissions and dependency upon imported energy;
-increasing safety and economic efficiency and ecological road transport by promoting efficient tyresin terms of fuel consumption, safer and low noise levels; and
-reducing the consumption of electricity and liquid fuel to electric transport and rail transport byreplacing old units with new more efficient ones in terms of energy.
-informing individuals and businesses about best practices, costs and benefits of efficient equipmentand tools, renewable energy, etc.; and
-launching programmes to improve street lighting, rehabilitation of publicly owned buildings andsocial facilities, construction of passive or low energy consumption or close to zero, and the use ofrenewable energy for heating social objects, etc.
In order to reduce its dependence upon energy imports and the impact of the energy sector on climatechange, the national programme provides the following key objectives for Moldova, relative to thereference year 2009:
-streamlining global consumption of primary energy to twenty percent (20%) by 2020;
-increasing the amount of renewable energy in the total energy mix from six percent (6%) in 2010 totwenty percent (20%) in 2020;
-increasing the share of bio-fuels to at least ten percent (10%) of all fuels by 2020; and
-reduction by 2020 of greenhouse gas emissions by at least twenty five percent (25%) compared to1990.
The expected economic effect following the completion of the programme is characterised by theachievement of the following targets relative to the reference year 2009 and taking into account theincrease of energy consumption by 2020, calculated based on trends in the last five (5) years:
-National target for energy savings
According to the energy efficiency goals of the EU and given the commitments of the Republic of Moldovaaligned with the acquis communautaire, the programme identifies as the national target for energy savingsin the long-term, by 2020, amounting to twenty percent (20%) which represents 14,167,857 TJ and willhelp reduce greenhouse gas emissions by 761,498.7 tons effect CO2eq.
-Intermediate target for energy savings:
Intermediate energy saving target will be reached by 2016 is established in the amount of nine percent(9%) which is equivalent to 6,021,350 TJ and will help reduce greenhouse effect gas emissions by323,637.5 tons of CO2eq.
-The annual energy saving target is set at the level of one point eight percent (1.8%), compared to theyear 2009.
State policy in the field of renewable energy is implemented through national, sectorial and localprogrammes. Their implementation is monitored by the Ministry of Economy.
Finally, the State policy in the field of RES, according to national policy documents, is reflected in:
-continuous adjustment of national legislative framework to European Union norms and standards;
-promotion of energy from renewable sources, energy efficiency and energy saving through schemesand support measures in accordance with best international practices; and
-ensuring social and territorial cohesion, as well as access of individuals and businesses to informationon the production and use of renewable energy and energy efficiency.
The Republic of Moldova reaffirms its strong commitment towards building a modern welfare state withinnature’s limits, by safeguarding the environment and by building a functional infrastructure for the useRES.
Given the fact, that Moldova is not an EU Member State and rather recently acknowledged the importanceof addressing ways to implement environmentally-sound, cost-effective and logistically-feasible measures,there is great hope and emphasis within the country to achieve these ambitious targets.