An Energy Crisis Provides Opportunity in Moldova

Critical Questions by Leah Kieff

Published January 7, 2025

Until 2022, Moldova sourced 100 percent of its energy from Russian gas. This gas was delivered through Ukraine via Transnistria, which has existed as a breakaway region of Moldova since 1992. This followed an armed separatist conflict where Russian forces directly supported Transnistrian militia against the rest of Moldova. Currently, Moldova is receiving all its gas from non-Russian sources.

However, until this month Transnistria was receiving Russian gas and using that gas, among other things, to fuel the largest power plant in Moldova which provides electricity across Moldova. With Ukraine ending transportation of gas across its territory, Russia will no longer supply this gas to Transnistria. While it is being publicly messaged by Russia as an attempt to force Moldova into repayment of alleged debts, that is unlikely the primary reason. Shutting off gas to Transnistria creates instability across Moldova, which is likely Moscow's intent as a part of their hybrid war.

In mid-December, Moldova declared a state of emergency, and efforts remain ongoing to ensure energy access for all Moldovans this winter. While these questions will help the reader understand the current crisis, more depth on the Moldovan energy sector is available in CSIS's long-form report published in late 2024, Moldova's Energy Future.

Q1: What caused the current energy crisis?

A1: The simplest explanation for the current crisis is that Russia cut off gas supply to the Transnistrian region. Transnistria has historically received Russian gas for free, with Russia billing the Moldovan government in Chisinau for the costs of Transnistria's gas. This cessation of Russian gas is a problem not only for the residents of Transnistria but also for the functionality of the largest electrical plant in Moldova, which is located in Transnistria and was fueled by Russian gas until this month.

Russian gas had flowed to Transnistria via Ukraine, but as of this month, Kyiv has stopped the flow of Russian gas via their territory. Ukraine has made clear since 2023 that it will not be renewing its gas transit agreement with Russia when it expires. While there were alternative ways that Russia might have continued to provide gas to Transnistria, the likelihood of termination of supply or an alternative route for the gas that would require Transnistria to bear new costs for transport was known far in advance. But even knowing this the Moldovan government had not taken the necessary steps to plan for Transnistria to be without Russian gas starting in January of 2025. Perhaps the Moldovan government thought that Russia would provide to Transnistria via alternative routes, but regardless of why, this represents a significant gap in long-term advance contingency planning.

The current state of supply and cost of energy was also exacerbated to a degree by Moldova's largest and state-owned energy supplier, MoldovaGaz not having sufficient supplies in stock to fuel Moldova throughout the winter of 2025. The stockpile of fuel to support Moldova's needs throughout winter has already been remedied. However, the timing of purchase of the fuel will likely lead to Moldovans paying higher prices throughout the winter. These are not the only two reasons for the current crisis. Moldova's energy has long been insecure and this is not the first time in the last few decades that Moldova has had blackouts caused by Russia revoking supply. More on this is covered in our 2023 piece, "Winter is Coming for Moldova."

Q2: How does destabilizing Moldovan energy help Russia?

A2: Shutting off gas to Transnistria creates energy instability across Moldova, including but not limited to the Transnistrian region. This uncertainty over access and rapidly increasing costs breed discontent with the current pro-Western Moldovan government. This is especially true as the cost of living and high prices were already primary concerns for Moldovans.

The energy situation in Transnistria does not have a simple solution and forces the current Moldovan government to respond to a politically complicated and expensive problem immediately. This diverts their time and attention from other items on the agenda such as the reforms needed for Moldova to join the European Union or election security improvements needed following the unprecedented interference in the 2024 Moldovan presidential elections and in advance of the parliamentary elections this year.

The crisis caused by the cut-off of gas to Transnistria also allows Moscow to blame the current pro-western Moldovan government not only for the crisis itself but for the suffering of Transnistria's residents, the majority of whom are Russian-speaking. This follows previous efforts to use energy costs to sway the Moldovan electorate. In the lead-up to the October EU referendum in Moldova, a pro-Kremlin Moldovan oligarch, offered free gas this winter to Moldovans if the referendum failed. The EU referendum was proposed and championed by the current pro-Western Moldovan government.

Russia using energy as a tool to strong-arm, especially against post-Soviet states is not new. Historically, these efforts have led to short-term submission, but in the longer-term diversification of supply such as with Moldova in 2022. But this diversification, which did not include the Transnistrian region, may not be enough if Moscow can leverage the current crisis towards results in this year's Moldovan Parliamentary elections and beyond, as Moldova continues its pathway towards EU membership.

Q3: What is the situation in Moldova?

A3: In early December of 2024 the Moldovan prime minister asked for resignations from three senior energy officials, including the minister of energy, citing decisions they had made that allegedly exacerbated the energy crisis. During the same press conference where these resignations were announced the prime minister also asked the Moldovan Parliament to declare a state of emergency. Also in December of last year, the Moldovan government began releasing plans to ensure that critical infrastructure would have power.

As of January 2025, Moldova has been able to purchase enough electricity to compensate for the lack of supply from the plant in Transnistria. But energy costs are already rising rapidly and are significantly more expensive for citizens across the country. The Moldovan government is offering subsidies for some households to help offset the costs.

Q4: How does Transnistria fit into the current crisis? What about Ukraine?

A4: Tiraspol also declared a state of emergency in mid-December of last year and discussions are happening between Tiraspol and Chisinau. It is in neither Chisinau's nor Tiraspol's interest to have Transnistria without energy. MoldovaGaz has offered to facilitate, but not fund, the purchase of gas on the open markets to supply Tiraspol. Transnistria rejected this offer.

But without purchasing gas from alternative sources, Transnistria is left without a gas supply. Currently, almost all industries in Transnistria are shut down, and Moldova's largest electrical plant, which is in Transnistria, is without a gas supply. The plant is switching to coal, rather than gas, and is expected to be able to run on coal through February. However, the current plant's operational status only provides enough electricity for residents of Transnistria, not Transnistrian industry or Moldova outside of the Transnistrian region. And even with this limited supply, there are already rolling blackouts in Transnistria. Chisinau has been preparing to ensure that support can be provided to the most vulnerable populations in Transnistria.

Ukraine also has an interest in Transnistrian stability for several reasons, including that a portion of its electrical grid transits via a hub in Transnistria. Since Russia's 2022 invasion of Ukraine, Russia's targeted attacks on Ukrainian energy infrastructure have reduced this domestic production capacity by almost half, with the recent Russian barrage targeting Ukrainian energy infrastructure at the end of 2024 further lowering their production capabilities. In the past Ukrainian outages have had a ripple effect in Moldova, and this is likely to be exacerbated by the power plant in Transnistria's instability. This means that Ukraine's ability to help Moldova in this crisis is extremely limited and that energy capacities across the region are likely to be stressed and prices higher this winter.

Q5: What does solving the Transnistrian energy supply look like?

A5: Solving the supply issue is not simply a question of energy-it requires a broader political solution one that raises more fundamental questions. Currently, no United Nations members recognize Transnistria as a sovereign country (a grouping that includes Moldova and Russia). The Moldovan government claims the territory of Transnistria as a part of Moldova. Additionally, over two-thirds of Transnistrian's residents have Moldovan citizenship. This leaves Chisinau on the hook for figuring out a solution to the energy situation in the Transnistrian region.

In the short term, there are no easy or cheap solutions. The Transnistrian government until this month had relied on revenue from gas sales to fund their budget. Regional businesses are predicated on below-market prices of gas and electricity. And residents are used to paying these discounted rates as well. This means that not only will subsidies be required to keep those living in the region from freezing while figuring out how to start having them pay market rates, but also that it is likely that there will be broad-scale bankruptcies of businesses across the region.

Weathering the current energy crisis provides an opportunity for Chisinau to not only help the population of Transnistria in the short-term, but also towards reintegration of Transnistria. In regards to energy, this must include a pathway to ensure the energy infrastructure in Transnistria is collaboratively integrated with Moldovan systems and secured. Security in this instance means both physical, as well as assuring the continued supply and operations. The integration of energy here should also include the Transnistrian government as a partner in the unbundling of the current ownership structure of Moldovagaz, as well as plans for TiraspolTransgaz's future.

A recent poll of Transnistrians found that approximately 45 percent support reintegration with Moldova. But, regardless of public opinion, efforts to reintegrate Transnistria are made more complex by a variety of factors. These include but are not limited to the presence of a small contingent of Russian troops, the Transnistrian oligarchs, as well as the linguistic, economic, and political realities of reintegrating Transnistria's population into Moldova. More on the history, potential challenges, and pathways towards reintegration of Transnistria is covered in the 2024 piece, "How Do You Solve a Problem Like Transnistria?"

Q6: What does solving Moldovan energy look like?

A6: Moldova increasing connections and electricity transport from Romania will help ease the crisis of the moment, but will still not provide enough electricity to support all of Moldova if the plant in Transnistria goes offline. Later this year the Vulcanesti-Chisinau power line is expected to be online, providing enough electricity via Romania to support all of Moldova, excluding the Transnistrian region. But while a good step, this is not enough to ensure Moldovan energy security.

There is also a need for impartial oversight across the energy sector. This will help ensure that these industries, which are currently largely state-owned are free from both real and the appearance of corruption. Furthermore, Moldova must commit to an aggressive timeline to unbundle the gas sector. The most recent crisis further demonstrates the necessity of Russia's state-owned Gazprom being removed from a controlling interest in Moldova's gas company Moldovagaz. There is also a need to continue exploring and implementing solutions to generate energy within Moldova.

These changes-increased oversight, transparency, and unbundling must all be a part of a publicly disclosed plan including costs and timelines for implementation to ensure that energy is secure. This does not mean that the plan must be fully implemented by the winter of 2026, but that it should be well underway. The plan being transparent will not only be helpful for Moldovans in planning for their costs and supply but also in countering the disinformation around energy supplies. Furthermore, such a plan would help Moldova's many partners and allies, including the United States and the European Union in understanding a timeline for aid in this sector.

Leah Kieff is a senior associate (non-resident) with the Project on Prosperity and Development at the Center for Strategic and International Studies in Washington, D.C.

Programs & Projects