Ukraine energy ministry warned over planned Moldova electricity export ban

LONDON (ICIS)–The Energy Community has raised major concerns about proposals by the Ukrainian energy ministry to ban electricity exports which could leave neighbouring Moldova in the dark from 1 October.

In a letter seen by ICIS and addressed to the Ukrainian energy minister German Galushchenko, the Energy Community warned that if an export ban implemented by the ministry were to “treat individual parties differently without a technical justification or based only on an economic or political rationale, this would amount to an outright discrimination.”

The Energy Community, an EU affiliated institution which has been working with Ukraine and Moldova to help them implement energy market reform, said if the Ukrainian energy ministry were to ban exports, Moldova would be in a vulnerable position, with its “situation deteriorating further and rapidly.”

The Ukrainian energy ministry is in the process of banning exports of electricity amid expectations the country would need to ration supplies after the 6GW Zaporizhizhia power plants stopped working following its occupation by Russia.

Ukraine and neighbouring Moldova completely disconnected from the Russian grid in February and synchronised with the continental region of the European Network of Transmission System Operators for Electricity (ENTSO-E) in mid-March.

Although Ukraine started limited commercial exports of electricity to neighbouring ENTSO-E countries, Romania and Slovakia in June, commercial flows to Moldova had been ongoing before as the country depends on Ukraine for supplies.

MOLDOVAN VULNERABILITIES

Moldova has historically relied on the 2.5GW M-GRES gas-fired power plant (Cuciurgani) in Transnistria, a breakaway region under strong Russian influence. However, the ENTSO-E synchronisation and imports from Ukraine had been helping it to limit its dependence on the plant.

“We are particularly concerned about Moldova, which according to our information would be cut off from Ukrainian electricity already on 1 October and thus ahead of other parties,” the Energy Community letter said.

“Beyond the legal implications, this would inflict particular harm on the Moldovan system and its customers. As you know, Moldova is in an extreme situation of dependence when it comes to electricity supply and has been relying on trade with Ukraine for a significant share of its supply mix over the past months,” it said.

Moldova, which depends almost entirely on Russian gas supplies, also faces a real risk in having its gas supplies cut off from 1 October amid claims the country may not be able to pay soaring gas prices.

Moldova was forced to declare state of emergency in October 2021 after Russia’s Gazprom reduced supplies by 40% of the country’s monthly winter consumption amid similar payment disputes.

The Energy Community letter further warned the Ukrainian ministry of energy that any measures it may take should be notified to the Energy Community and that decisions taken in response to a sudden supply crisis would cause “the least disturbance in the functioning of the internal energy markets and does not go beyond what is strictly necessary to remedy the situation.”

A source close to the ministry of energy said Ukraine was under daily unpredictable Russian shelling.

“It becomes clear that with the start of the heating season, critical infrastructure will be the main target. The ministry and the industry are doing everything possible to correct the potential consequences of the attacks as quickly as possible,” the source said.

“Ukraine is interested in increasing electricity exports. However, in the conditions of war, it is difficult to predict any scenarios. The main priorities remain the provision of energy to Ukrainians and the fulfilment of conditions.”