Renewable Energy Law Gets into Force

Duminică, 08.04.2018 06:22   1713
The Law on Use of Energy from Renewable Sources entered into force in Moldova on March 25, 2018, following a round of postponed dates for enactment, to the joy of investors who would benefit from legislative incentive to build clean energy businesses.

This is translation from Romanian. The original story is HERE.
This law passed the Parliament vote in February 2016 and was set to take effect on March 25, 2017. Given that the country was not ready at that moment to comply with the measure, to cite the authorities, the lawmakers decided to adjourn its implementation for one year.
Adjournment for the sake of Government
The adoption and enforcement of a clean energy legislation was a commitment assumed by Moldova at the time it signed the free trade agreements with the European Union and with the EU Energy Community. The decision to wait with the practical application had been met with criticism in Brussels, which reminded the Government in Chisinau about its obligations. 
The Energy Community Secretariat said in a published report that Moldova was committed in 2016 to write the rules for tenders in the case of renewable energy projects and to simplify the administrative procedures as well as the cost methodology for connection to transportation networks and power grids.
It also underlined the need to introduce sustainability criteria and adequate incentives in the bio-fuel regulations. Lack of progress in this area impedes the further development of the agricultural potential of Moldova, which should be thus produce bio-fuels for itself rather than rely on imports in order to achieve the 2020 objective of supplying 10% of needed energy to the domestic market in bio-fuels. 
Passing rules five minutes before deadline
In spite of warnings from Brussels in late February 2018, Moldova had not been ready from the legislative or technical point of view for the clean energy business. 
“Out of all secondary regulatory acts, five were left into the responsibility of the Ministry of Economy and Infrastructure (MEI). Of these, one was approved in the form of a Government Decision, two were scrutinized by the National Anticorruption Center (CNA), another one is expected to arrive at CNA soon, and the last has been issued to the National Energy Regulatory Agency for review (ANRE),” State Secretary Vitalie Iurcu told a meeting of the parliamentary commission for economy, budget and finance on February 28, 2018.
Therefore, during the next month the Moldovan authorities hurried up to get mass production of backup regulations and decisions that would make the Law on Renewable Energy Sources functioning. Nonetheless, on March 25, 2018, Moldova enacted only the primary component of this law while the Ministry of Economy and Infrastructure has promised to obtain the Government’s approval in a short time.
In early March, the Parliament passed several amendments related to the same law in order to bring more clarity to investors in the renewable energy sector and to adjust the national regulatory framework to the EU acquis on electricity and natural gases. 
At the same time, Moldovan laws now define the notions “contract fulfillment guarantee”, “offer guarantee” and “participation guarantee.” The participation guarantee fee for one kilowatt of installed power is limited to maximum 2% of investment and the participation guarantee fee may not exceed  10% of investment.


Both fees are collected in the state budget. 
On March 13, 2018, ANRE set up the regulated tariff for electricity supplied by the state-owned Energocom SA, at 1.63 lei for one kilowatt per hour, without VAT. 
ANRE director-general Tudor Copaci told that 1.63 lei is the average tariff for orientation for which all power producers will be obliged to sell electricity, including clean energy producers. 
Projects of hundreds of millions of euros
The enforcement of the Law on Renewable Energy Sources will be welcomed by many investors with stand-by plans for Moldova. The French group Heliomed alone, for example, intends to invest around 100 million euros in the ex-Soviet republic’s energy sector. It has already rented two fields for a wind-mill farm totaling more than 100 megawatts. The law in question provides that investors with renewable energy projects that would generate electricity under a certain amount will be welcomed in accordance with the “first come, first served” principle. Those investors will be working under a same tariff for 15 years.
In the case of investors with bigger financial plans the tariff will be set up at an auction. 
The Government is most concerned about the stability of the domestic energy system. According to Călin Negură, head of the renewable energy policies at MEI, the authorities will open the internal market for renewable energy project on a gradual basis, via tenders, so that consumers pay the lowers prices and the system remained stabled. Moldova doesn’t really have power generating capacities of its own, he stressed. 
Renewable energy covers just 0.4% of needs
One year ago, former economy minister Octavian Calmâc, now economic advisor to Prime Minister Pavel Filip, was generously throwing right and left optimistic forecasts for 2017 about the Moldovan energy sector and specifically clean energy generation. 
“In the area of renewable electricity generation in 2017 we are expecting the mobilization of significant financial resources, around 120-150 million euros, which will be invested into wind-power farms and photo-voltaic panel fields; construction investments as such are expected to start in 2018,” the official was quoted as saying at a business forum, among others.
Given that the adjournment has frozen the investment plans, MEI would not venture into new optimistic forecasts.  
Carosam Sud SRL, for example, a branch of Heliomed, started in 2017 construction and operation of a 60-MW wind turbine field near Opaci village of the Causeni District. Overall it plans to install 24 turbines.
Another Heliomed-affiliated firm kicked off a similar project in the  Şoldănești District, for a 40-MW and more capacity. 
The French investors declined to comment on the adjournment of the renewable energy law implementation. 
ANRE reports show that Moldova produced only 17.8 million kilowatt per hour energy from renewable resources in 2016; this accounted for only 2.5% of the total domestic electricity production and less than 0.4% of the national consumption. Of all renewable energy, 78.7% was generated from biogas, 14% from wind, and 7.4% from solar light. 
Unused potential
A study published by the International Renewable Energy Agency says that Moldova has a potential of renewable power generation of more than 21 gigawatts. This would be ten fold more than the entire electricity production in operation in the country at present. The prospects are brighter for sun light panels, which would give the country up to 20 GW capacity at the lowest capital cost.  
In 2010-2015 Moldova spent around 107 million US dollars from international donors and lenders for energy efficiency and renewable energy measures, but dependence on energy imports - especially Russian gases - has remained high. 
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Acest articol a fost publicat cu susținerea fundației Național Endowment for Democracy în cadrul proiectului ”Promovarea responsabilității guvernării” și poate fi preluat pentru distribuire, publicare și citare fără careva limitări. Referința la sursă este obligatorie.
This article has been published thanks to the support of the National Endowment for Democracy as part of the Promoting Government Accountability Project and may be shared, republished or quoted without limitations. Reference to the source is mandatory.