Market liberalization in MoldovaMarket liberalization in Moldova-main challenges--main challenges-

Chisinau, May 16, 2013

Veronica MuruziucVeronica Muruziuc

Seventh Partnership Activity

MOLDOVAN POWER MARKET -SPECIFICS-

• Power market opening:- From 1 January 2013, all non-household customers

were declared eligible (Electricity Act);- The power market for households will be opened from

1 January 2015 (Electricity Act);- Only one active eligible customer.

• Lack of generation capacity:- 70% of electricity imported from Ukraine and

Transnistrian Power plant;

MOLDOVAN POWER MARKET -SPECIFICS-

- 30% covered by producers from the right side of Dniestr.

•Moldovan TSO, Moldelectrica, is a state company and is functionally and legally unbundled;

•The 3 DSOs performing their activity on a given area carry out both activities of distribution and supply of electricity at regulated tariffs;

Gas Natural Fenosa

Distribution and supply at regulated tariffs

RED Nord

RED Nord Vest

Cross-border exchanges

from Ukraine

Cross-border exchanges

from Ukraine

Independent power producers

Transnistria

8 licensees for supply at non-regulated

tariffs

Legend: Electricity

flows

Contractual, financial flows (billing and payment)

Tariff customersTariff customers

1292719

TSO Moldelectrica

TSO Moldelectrica11

Regulated Producer

HPPCostesti1

Eligible customersall non-householdsEligible customersall non-households

Only one active

CHP-North

Regulated Producers

CHP-1

CHP-2

Cross-border exchanges to

Romania in island mode

Cross-border exchanges to

Romania in island mode

Non-regulated CHPs of Sugar

Refineries

Only one active

Picador-Grup

MOLDOVAN POWER MARKET -SPECIFICS-

MOLDOVAN NATURAL GAS MARKET - SPECIFICS -

• Natural gas market is fully opened;

• No active supplier at non-regulated tariffs;

• No active alternative suppliers: natural gas is imported from Russia.

MOLDOVAN NATURAL GAS MARKET - SPECIFICS -

• Moldovan TSO, Moldovatransgaz, a daughter company of Moldovagaz, is functionally and legally unbundled;

• The 25 DSOs performing their activity on a given area carry out both activities of distribution and supply of natural at regulated tariffs.

Moldovagaz

Moldovatransgaz

TSO

Import

Tiraspoltransgaz

TSO Final Customer (all customers are eligible but no one have the

possibility to buy)

1 ProducerDSO

S&PSO

Import flows from RussianFederation (via Ukraine)

Cross-border flows to Romania(natural gas from Russian Federation to Romania)

„Darnic-gaz“ JSC

Technical Link Commercial Link

12 Distribution Companies (DC)

To DCs connected to Moldovatransgaz

network

To DCs connected to the neworks of Moldovagaz-

daughter DCs

1 Supplier at non-regulated

tarfiis

MOLDOVAN NATURAL GAS MARKET - SPECIFICS -

COMMITMENTS UNDER TCE• In march 2010 Moldova signed the Energy

Community Accession Protocol:- Under the treaty Moldova had to transpose the

so-called “second energy package”.• According to the Ministerial Council Decision

from 6 October 2011, by 1-st January 2015, the Energy Community Contracting parties should transpose the so-called “third energy package”:

- Directive No. 2009/72/EC; - Directive No. 2009/73/EC;

COMMITMENTS UNDER TCE- Regulation No. 714/2009; - Regulation No. 715/2009.

• The scope of the “second energy package” and of the “third energy package” - ensure liberalization of energy markets.

TCE Contracting parties

MAIN CHALLENGES

• Given specifics of the natural gas and power markets in Moldova, the main challenges regarding liberalization of energy markets are:

- To ensure effective unbundling of TSO from producers and suppliers in the natural gas sector;

- To establish procedure for switching suppliers by customers, in maximum 3 weeks (in both electricity and natural gas sectors);

MAIN CHALLENGES

- To encourage the entrance of new suppliers on the energy markets:- introduction of obligation for non-household customers to

buy electricity from the market (could be an option?);

- To establish a day-ahead market: - At the level of Energy Community a SEE WMO Report was

developed. One of the conclusions was that until Moldova joins ENTSO-E (in about 8 years according to the Report) , the possibility to create a common market with Ukraine should be considered.

- To establish a balancing market, an ancillary services market.

THANK YOU.

Veronica Muruziuc Legal consultant National Agency for Energy Regulation Tel. +373 22 852 934E-mail: vmuruziuc@anre.md 90, Columna str., 2012, Chisinau, Republic of Moldova