Weekly Roundup: New Twists and Turns in the Energy Crisis

January 17th, 2025

The intertwined energy crises of Moldova and Transnistria¹ continue to dominate the headlines this week and will make up the majority of our roundup. These are emerging as 2 different stories. Firstly, how will Russian gas get to Transnistria to get the lights and heat back on and secondly, what does Moldova’s medium and long term energy situation look like? Let’s dive in.

Where’s the Russian(?) Gas?

As we previously wrote, Transnistrian “leader” Vadim Krasnoselsky traveled to Moscow and announced that free gas to the region would soon be resumed. No date or timeline was announced but statements from the region’s “authorities” continue to point towards January 20th as a possible date of resumption.

No word has come on the mechanism of the delivery but everyone has assumed that Russia will book transit capacity in the Trans-Balkan pipeline. According to analyst Andrei Curararu from Watchdog the Transnistrian authorities have been intentionally avoiding saying this because the Chisinau government has been suggesting this solution since November. He stated:

"This suggests that the solution to this crisis could have been earlier, and proves that Moscow deliberately provoked it. It is also unclear why Krasnoselsky did not go to Moscow earlier: in December, November, March. This is further proof that he is simply a puppet of the Kremlin,"

Russian gas piped across the Black Sea via Turkstream and then into the Trans-Balkan pipeline would still need to briefly cross into Ukraine in order to arrive in Transnistria. On multiple occasions the Moldovan government raised this issue with the Ukrainian government last year and received unofficial assurances that this would be allowed.

Ukraine’s Foreign Minister Andrii Sybiha called this into question this week when he stated in an interview that this question "needs to be studied.” He went on to state:

"However, I believe that the transit of Russian gas is completely unacceptable. For now, we are discussing the possibility of helping the Transnistrian region through joint actions by Ukraine and the EU. Let's focus on what we can do without Russian gas,"

In parallel with this negotiation process it has become clear that Russia may have something else in mind and this crisis may take another unexpected turn.

“Traitors” and Natural Gaz DC

On January 15th Deschide.md broke a story alleging that Arcadie Vicol, owner of the company Natural Gaz DC, was being investigated by the Security and Information Service (SIS) for treason. The story had few details but stated that Vicol was orchestrating an “obscure” scheme regarding the delivery of gas to Transnistria and was preparing to present himself as the “savior” of the region.

The story alleges that he is being investigated for treason on behalf of the Russian Federation.

Who is Arcadie Vicol?

Mr. Vicol owns the private natural gas supply company Natural Gaz DC. He formerly held senior administrative positions in the state companies Chisinau-Gaz, Moldovan Railways, Metalferos and MoldovaGaz. Vicol is considered to be closely associated with Vladimir Plahotniuc and has been investigated in the past by ZdG for orchestrating illicit schemes that helped drive Moldova Railways to the brink of bankruptcy under the oligarch’s rule.

Photo Source: Primul în Moldova

Treason or Business or… ?

Arcadie Vicol denies that there is any investigation and claims that he was not interrogated by SIS. He said "We had a conversation about the concluded contract, there were no accusations,"

Vicol claims that he had worked out the framework of a contract to supply 2-3 million cubic meters of natural gas per day to the Transnistrian region. This gas would be bought on the European spot markets and imported into Moldova paying associated taxes to the Moldovan state. It would then be sent to Transnistria. When asked by reporters about Krasnoselsky’s statements about Russia providing gas as humanitarian assistance Vicol claimed to know nothing about this situation.

Asked about these reports Prime Minister Recean stated that "I am aware of the interrogation. We will not allow anyone to become part of Russia's hybrid aggression here in Chisinau." The Prime Minister went on to confirm that an investigation is ongoing into Vicol and Natural Gaz DC and explained the situation saying:

"Russia does not want to supply gas to the left bank of the Dniester. Russia wants to destabilize the region and destabilize Moldova. According to the law, only Moldovagaz can supply gas to the left bank of the Dniester. Because, I emphasize, there is no free market on the left bank of the Dniester, but there is Russian occupation. It is important to understand why someone would need complex schemes if there is a well-written contract that must be fulfilled? This is Russia's operation: "Look, we want to supply natural gas after we ourselves refused to supply it, but Chisinau is against it,"

Arcadie Vicol also claimed that this business relationship had already been approved by the Energy Community Secretariat, the leadership of the EU’s Energy Community which seeks to integrate the energy markets of the EU and regional neighbors. The Energy Community categorically denied this statement saying that they have no role in contract negotiations or approvals.

On the same day² Russian news outlet Kommersant reported that the Russian government was planning to purchase gas for Transnistria on the European spot market via the company Natural Gaz DC. They reported that their sources claimed that up to 3 million cubic meters per day is being negotiated which could cost, at current market prices, around $164 million dollars to supply the region for the rest of January through April. This funding would come from the Russian state budget.

Kommersant was unable to find a reason that the Kremlin would choose to purchase European gas for Transnistria rather than send their own gas through the Trans-Balkan pipeline. Experts interviewed by the outlet speculated that it would save time by bypassing complex transit negotiations. Also, it would transfer the responsibility for subsidizing Transnistria away from GazProm (which is struggling) directly to Russian taxpayers. It would also be much much more expensive.

The next day Kremlin press secretary Dmitry Peskov stated that Russia is prepared to help Transnistria with gas but requires Chisinau’s “participation.” He did not elaborate except to say that the Moldovan government has shown “no readiness to do this.”³

Speculation aside, no one seems to know what is going on here.

Moldova Faces a Medium / Long Term Crisis

To date the majority⁴ of the territory of Moldova controlled by the constitutional government has not faced any blackouts - planned or unplanned. At the same time higher energy prices came into effect on January 10th and both businesses and government institutions have begun to conserve power more aggressively. The Academy of Economic Studies of Moldova (ASEM) announced that they would shift to distance learning starting January 13th and continuing through March 30th. Businesses and state buildings have noticeably reduced lighting at night.

The national energy regulator ANRE announced that differentiated pricing will come into effect on January 20th for those with modern meters. Under this scheme prices will be cheaper at non-peak hours. Energy companies such as Premier Energy have stated that they do not yet know how many such meters their customers have and what the mechanism for implementing this process will be. There is also no word on where and how to buy such electric meters.

No matter how Transnistria manages to get gas from Russia there will not be enough provided to produce electricity for cheap export to Moldova. Prime Minister Recean highlighted this saying:

"It is clear that this volume will not be enough for the Right Bank to have access to cheaper energy. This is aimed at drawing us into a scenario of escalation and conflict. This is what the Kremlin is trying to achieve. Chisinau will not accept this game; it is important for us to maintain peace and stability,"

He went on to say that the ultimate goal is to bring a pro-Russian government to power in parliamentary elections and to use Moldova as a potential springboard for attacks against Ukraine.

Reacting to rising inflation the National Bank announced an increase in the base interest rate from 3.6% to 5.6%. Inflation in December was 6.97% with monthly increases in inflation driven 27.6% by the increase in gas prices. Increased electricity prices are expected to further drive up inflation in January well above the National Bank’s target of 5% ±1.5%.

In addition to increased prices and inflation, Moldova faces a potential shortfall of electrical capacity in Spring. Previously, the energy crisis was driven by gas supplies and therefore primarily affected winter heating season. Now, with the crisis in electricity there is an additional challenge. As of January 15th electrical imports from Romania constituted 59% of Moldova’s energy needs. Energocom has struggled, but managed, to reserve enough capacity for the country when importing between 50% and 60% of the country’s power needs.

However, an additional 33% of power consumption comes from Thermo-electric plants. These plants produce electricity as a byproduct of operating central heating and hot water supply systems. When the Thermo-electric plants reduce capacity in warm weather a new electrical shortfall will occur. Spring and summer also bring better weather for solar power but at peak consumption times of morning and evening this does not help.

The Ministry of Energy commented on questions about this situation by stating that Norway is preparing to donate a gas turbine for electrical generation. They didn’t provide more information about the system except that similar systems had been donated to Ukraine and were in operation there. The Ministry of Energy also noted that “island connections” whereby elements of Moldova would be independently connected to Romania via their 110 kV lines could take pressure off of the main 300 kV lines. Island connections have not had to be used so far this winter and it is noteworthy that it is possible that Moldova will need them in warmer weather rather than colder.

Moldova’s high voltage electrical transmission lines. The purple lines running to Romania represent the 110 kV high voltage lines that could be used for island connections. Map used with permission from IEA

This all means that both Moldova and the Transnistria region are staring down long term crises. Moldova will race to complete the Vulcănești - Chișinău high voltage line which is said to be on schedule for operating in December 2025. At the same time higher energy prices may be here to stay. In Transnistria, the gas may (or may not) soon turn back on. But without enough gas to generate electricity to sell to Moldova the region will face substantial budget shortfalls.

Other Energy News:

Unbelievably there is yet more news on the energy front - here’s a roundup of the top stories:

• Residents of some villages in the security zone are angry about being connected to the Moldovan grid. During President Sandu’s visit to Moldovan villages that are caught up in Transnistria’s rolling blackouts due to their infrastructure connections she was met with angry gatherings in some villages. Residents were furious that they would have to pay the same rates in the future as the rest of Moldova and demanded that they be allowed to keep the highly subsidized energy of the Transnistria region.⁵ Later, on January 17th crowds of villagers protested and blocked the installation of power lines in their communities demanding a continuation of cheap (nearly free) energy. MoldovaGaz projects that all these villages will be connected to the gas network in 3 months. Electrical connections will be faster and are already in process drawing these limited protests.

• Prime Minister Recean has announced that Moldova is preparing to sue GazProm. He stated that the government is “drawing up a list of potential lawyers” who will begin the process of repatriating stolen energy assets. It is not clear if the government plans to move forward with an attempt to nationalize MoldovaGaz but one target of the suit is likely to be MGRES which was illegally privatized and sold to a Russian company by the Transnistrian “authorities.”

• President Sandu and the government are facing major criticism for allowing Krasnoselsky to transit Moldovan territory. Online posts and journalists questions have demanded to know why he was not arrested under the terms of Moldova’s law on separatism. Prime Minister Recean stated that the goal of the government is to solve the current crisis saying:

"We adhere to the framework of the conflict resolution and respect it. The most important thing now is to make decisions aimed at preventing genocide⁶ and the humanitarian crisis that is happening in the 21st century. Today, citizens are without electricity for nine hours a day, they do not have access to drinking water and heating. We must do everything necessary to help these people get out of the crisis,"

• The Ministry of Economy has announced an energy compensation plan for businesses. Minister Alaiba said that companies will be able to claim compensation of up to 50% of their electrical bills for between 3 and 6 months. How much compensation and how long will depend on the resources available to the government. He stated that "Priority will be given to companies that make essential products: food products, milk, meat, eggs, bread and others . Support will also be extended to other sectors in the manufacturing industry, such as: manufacturers of footwear, clothing, furniture, electrical components and others." Currently there is no way to apply for compensation if a company rents their property and pays for their energy through their landlord. The government is aware of this problem but has not yet announced a plan to address it.

• The government has alleged that Ilan Shor is offering 1000 lei in energy compensation to residents of Gagauzia, Orhei and Taraclia. The Chief of the National Police Viorel Cernăuțanu stated that police are investigating and documenting the movement of this financing. He said that this is a case of money laundering and illicit party financing - not humanitarian aid.

• Ukrainian President Volodymyr Zelenskyy stated that Ukraine is prepared to assist Transnistria with coal. He further stated that “so far we have not seen a response from those who actually control the situation on the left bank of the Dniester. If they play along with Russia, that is one thing, but it is quite another thing if they really want to help the people in Transnistria."

• The Bureau of Reintegration invited the Transnistrian “authorities” to a meeting to discuss the crisis. The hoped for 1+1 format meeting would have discussed the provision of Ukrainian coal, a needs assessment for Transnistrian hospitals, the creation of a crisis working group and a mechanism to allow ambulances to easily pass through the “border.⁷” The Bureau of Reintegration claims that the Transnistrian side refused to meet, though the Transnistrians claimed that it was all a (petty) argument over where to meet.⁸

• The Ministry of Energy announced a tender for the purchase of battery based electrical storage. The tender envisions purchasing 74 MW of battery storage capacity to help strengthen Moldova’s grid (and assist in using renewable energy). The tender is anticipated to cost $85 million dollars and will be funded by USAID. Installation is planned for September 2026.

• Transnistria has revised their estimates on gas consumption. Previously they had projected that the reserves in the pipes would last until January 20th but with lower daily consumption than expected they now believe reserves will last until February at the current rate.

1. Note: As we’ve done before with articles about Transnistria we will sometimes say “Moldova” and “Transnistria” as a way to indicate the parts of Moldovan territory controlled by Chisinau and Tiraspol respectively. This is easier for most readers than “left bank” vs “right bank” and is simply a convienent shorthand. All territory in question is Moldova.

2. All of this, Krasnoselsky’s return from Moscow press conference, the publishing the interview with the Ukrainian Minister of Foreign Affairs, the report about Treason, etc - took place on January 15th. Wow, the news moves fast these days.

3. What “this” is remained unclear

4. The exception being villages in the security zone connected to the Transnistrian power grid

5. This situation has also created some grumbles from people in the rest of Moldova who just realized that some villages have had highly subsidized electricity for years. In cases where this power was purchased through the Moldovan grid state subsides were transferred on a bank card to residents and paid for by taxpayers so that their power would be equalized with nearby villages in Transnistria. This situation has lasted decades and was a strategic choice made by all Moldovan governments so that the economic appeal of nearly free energy didn’t result in more villages trying to defect to Transnistria. The current crisis is creating a situation where all of these assumptions are crashing into the reality of a rapidly changing macro energy situation.

6. “Genocide” is an interesting turn of phrase here and to my knowledge has not been used by the Moldovan government previously. It is not clear what exactly the Prime Minister is alleging.

7. These are currently blocked as Transnistria claims they have no medical crisis.

8. The 1+1 meetings are supposed to meet in a rotating location between Chisinau and Tiraspol. Since the passage of the law on separatism (which has never been enforced - most notably this week) Transnistrian “foreign minister” Vitaly Ignatiev has refused to set foot in Moldova claiming that he fears arrest. So meetings have been held in a rotation between being in Tiraspol and meeting on Zoom. The Moldovan side suggested either meeting in Chisinau or on Zoom. The Transnistrians insisted that everyone meet in Bender. Now there’s no meeting.