Security of supply status quo. Challenges and future developments. 14 June 2018, Budapest, Hungary

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1 Security of supply status quo. Challenges and future developments 14 June 2018, Budapest, Hungary

2 General country presentation Republic of Moldova (Romanian: Republica Moldova), is a landlocked country in Eastern Europe, bordered by Romania to the west and Ukraine to the north, east, and south. Key figures Area 33,864 km 2 Population 2,998,235 Density 105/km census GDP 2017 (nominal) $8 billion Per capita $5,657

3 Energy consumption The final energy consumption of the Republic of Moldova in the 2017 year achieved a figure of TJ or 2525 ktoe ,00 90,00 80,00 8,46 12, ,00 60,00 26,53 50,00 40,00 33,28 30,00 Coal Natural gas Fuels Biofuels and waste 16,53 Electricity Heat 2,88 0,00 20,00 10,00

4 Dependence of the imports Republic of Moldova remains a state with a low rate of energy independence, being highly dependent of the imported energy and energy resources (74% in 2015) ,0 52,1 89,9 74,2 39, ,4 99, ,8 82,1 69,1 57,1 42, Total dependence of imports Coal Fuels Natural Gas EU 28 (2005) Republic of Moldova(2005) EU (2015) Republic of Moldova(2005)

5 High Energy Intensity Republic of Moldova has a high energy intensity, which is 3,3 times greater than the EU-28 average , ,3 149,2 137,6 400,7 120, Republic of Moldova EU - 28 Comparition of energy intensity of the RM and EU - 28 (ktoe/1000 Euro GDP)

6 Renewables Around 27% from the total energy used within the Republic of Moldova in 2016, comes from renewable energy sources (RES), the main share of it being used for heating (biomass heating in rural areas). 35,0 30,0 25,0 Real Target 20,0 15,0 17% 10,0 5,0 0,

7 Renewables Nr. Source Installed capacities, MW E H&C 1 Hydro 16,25 2 Solar 2,92 3 Wind 27,14 4 Biomass 112,57 Residential sector 67,54 Public sector 87,71 5 Biogas 5,71 TOTAL 52,02 112,57 2% 3% 10% 17% 68% Hydro Solar Wind Biomass Biogas Figures regarding the total installed capacities of renewable energy sources, MW (%, on graph)

8 Renewables Share of electricity generated by each type of renewable source used 0,1% Renewables capacity distribution 53,6% 1,5% 71,5% 23,4% 33,3% 11,6% 5,0% Solar Biogas Hydro Wind

9 EE-RES, GWh Renewables Pinst, kw Solar Biogas Hydro Wind Total installed capacity Evolution of electricity production (sold at regulated prices) from RES and of installed capacities

10 Legal requirements relating to security of supply Legal requirements relating to security of supply are described mainly in: Energy Law nr. 174/2017 Electricity Law nr. 107/2016 Natural gas Law nr. 108/2016

11 Legal requirements relating to security of supply Government Ensures security of supply of state Approves the Regulation on Exceptional Situations on the Energy Market, the Action Plan for Exceptional Situations in the Enegy Market Is entitled to impose public service obligations in order to finance the development, upgrading, operation and / or maintenance of strategic objects promotes within the limits of its competence regional and international cooperation in the field of energy

12 Legal requirements relating to security of supply National Agency for Energy Regulation Monitors the import of electricity, establishes the conditions for the export of electricity in case it is necessary to ensure the security of the electricity supply Ensures that regulated prices and tariffs provide incentives to increase efficiency and ensure security of supply

13 Legal requirements relating to security of supply License Holders License holder must meet security and continuity of supply obligations, otherwise the license may be suspended According to the investment plans, develop systems to ensure security of supply Producers operating fossil-based power plants are obliged to maintain fuel reserves at a sufficient level to ensure security of supply Monitors security of energy supply Shall draw up and submit by 31 March an annual report containing information on security of supply

14 General objectives of the National Energy Strategy Ensuring security of energy supply; Development of competitive markets and their regional and European integration; Ensuring the sustainability of the energy sector and combating climate change.

15 Interconnections Existing voltage levels (Transportation grid): 110, 330 and 440 kv 7x330 kv and 11x110 kv electrical interconnection lines with Ukraine energy system (developed interface); 1x400 kv and 3x110 interconnection lines with the Romanian electrical energy system (weak developed interface); ENTSO-E - asynchronous operation (only island operation); IPS/UPS synchronous operation Installed generation capacities 3014,4 MW (operational around 2194,4 MW) Right bank 408,4 MW Left bank 2606 MW

16 Interconnections The interconnection of Moldova's power system with the Romanian system and correspondingly with the European Electricity Transmission System (ENTSO-E) is a priority of the state's energy policy. The Energy Strategy of the Republic of Moldova until 2030 expressly states that for the Republic of Moldova, joining the ENTSO-E network signifies access to the EU internal market and is of vital importance in the medium term. For this, "Moldelectrica" and NEK Ukrenergo signed a Memorandum on common access to ENTSO-E, "Transelectrica" SA (Romania) being a supporting party. In 2016, was finalized the feasibility study on the projects for the development of the "Back to Back" and 400 kv Vulcăneşti- Chişinău LEA, MW, and the need for further development of the "Back to Back" and the 400 kv Bălţi- Suceava LEA, MW

17 Interconnections The main share of the imported natural gas comes from Russian Federation, the transportation grid of the natural gas is still mainly developed on the eastern part of the Republic of Moldova. The main issue which is one of the most important objectives of the National Energy Strategy of the Republic of Moldova is the diversification of the import sources. From this reason with the support of Romania was finalized the construction of the gas interconnection Iasi (Romania) Ungheni (Moldova) which has a capacity of 1,4 billion m3/year. In 2015 the quantity of the imported natural gas from Romania was about 1 million m3 (1% from total country consumption). From this reason the interconnection line will be exteded till Chisinau, where are consumed approx. 50% of the entire natural gas in RM. The works should be finished in 2019.

18 New legal framework on renewables In order to promote the use of the renewable energy sources and to achieve the targets stated in the National Energy Strategy of the Republic of Moldova (17% renewables until 2030), in by the Parliament was adopted the Law nr. 10 Regarding promotion of use of energy from renewable sources, which entered into force after 2 years, in April 2018, and abrogated the previous Law on renewables. The new legal framework provides 2 clear and transparent support schemes for energy producers which are using renewable energy sources, namely: 1. Fixed tariff - established according to art. 14 for the eligible producer who owns or is about to hold power plants with cumulative power not exceeding the capacity limit set in accordance with art. 10, e) but not less than 10 kilowatts; 2. Fixed price established in the auction, according to art. 35 for the eligible producer who owns or is about to own power plants with cumulative power greater than the capacity limit established in accordance with art. 10, e);

19 Renewables support schemes Fixed tariff The support scheme for small RES producers In the case of small producers of RES electricity, the eligible producer status is offered to all applicants who meet the conditions set out in the Rules on confirmation of the approved producer status approved by the Government, by applying the principle "first-come, firstserved". Support schemes FIXED PRICE FIXED TARIFF Producers who have been confirmed as eligible producers will have the right to conclude an electricity trading contract with the Central electricity supplier for a period of 15 years at a fixed tariff approved ex-ante by ANRE. 10 kw Capacity Limit X kw Generation capacity, kw

20 Renewables support schemes Fixed price The support scheme for large RES producers Support schemes The RES electricity generators, with capacities higher than the limit set by the Government, who will want to benefit from the support scheme, can obtain the status of eligible producer following the participation and the winning in the auction. FIXED PRICE FIXED TARIFF After winning the auction (by presenting prices smaller that ceiling price) the RES producer can deliver the electricity to the Central Supplier for 15 years. 10 kw Capacity Limit X kw Generation capacity, kw

21 Net metering mechanism The support scheme for the final consumers Support schemes Net metering - The final consumer holding a power plant (Pel <200 kw), which produces electricity from renewable sources for his own use and who has concluded a contract for the supply of electricity at a regulated price with the Supplier, has the right to deliver to the grid the electricity surplus produced and the supplier is obliged to conclude a contract for the application of the net metering mechanism. FIXED PRICE FIXED TARIFF 0 kw 200 kw Capacity limit, X kw Generation capacity, kw NET METERING

22 ALL IN ONE REPRESENTATION of the support schemes 0 kw 200 kw Net Metering INSTALLED CAPACITY FIXED TARIFF 10 kw X kw Capacity limit established by Government according to the art. 10 e); FIXED PRICE (established in the action)

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