Author: Corneliu Ciurea
An apparently harmless and slightly publicized event in neighboring Ukraine, produced in September, may cause extremely harmful effects in the Republic of Moldova and affect energy security. It is about amending the legislation in the energy field, operated in September by the Verkhovna Rada of Ukraine, due to which our neighbor started buying electricity from Russia.
Pro-Russian deputies from the Verkhovna Rada endanger the energy security of their own country
On September 18, 2019 the Verkhovna Rada of Ukraine amended the legislation in the field of electricity, which allowed the sudden increase of imports from Russia. According to statistical data, the volume of electricity purchased by Ukraine from Russia increased in October by 2 times and in November by 3 times. Such intensification of electricity imports from Russia, considered by Ukrainians as an aggressor country, has been described by some Ukrainian MPs as “state crime”. This initiative was promoted by the chairman of the Parliamentary Committee on Energy Problems of the Verkhovna Rada, Andrei Gherus, a politician with pro-Russian sympathies and a close friend of the Kolomoiskii oligarch. Although, subsequently, Gherus denied interest in this decision and pleaded that imports are not profitable, the exponential increase in Russian electricity supplies has put down not only Ukrainian society but also officials in the European Union. According to the Europeans, this decision of the Verkhovna Rada contradicts the agreements signed in the European Union Association Agreement.
What are Russia’s interests in the energy sector?
Through the changes made in September, Ukraine helps volens nolens Russia in implementing an older strategy that declares energy resources as the spearhead of Moscow in the war with Europe. Russia’s goal has always been to get rid of the humiliating role of Europe’s “underdeveloped supplier of raw materials” and to turn into an energy superpower, capable of dictating to the world’s states their own political and economic conditions. An element of this strategy is to minimize the export of raw materials with little added value, such as natural gas, which reduced Russia to the role of periphery. For this, Russia was to implement two stratagems: firstly to gain access to the natural gas distribution networks, the last link in the entire production chain and which offers the highest added value; secondly, to give up the export of natural gas in favor of finished products with higher labor productivity, such as electricity.
The first stratagem failed lamentably – the Energy Package 3, conceived by the EU, demonopolized the process of supplying natural gas and liberalized the energy market, putting Gazprom in great difficulty. Moldova remains the only country in which such a monopoly continues to exist, but once the Energy package 3 is implemented, we will also highlight this disproportionate influence of Russians on the energy market.
Unfortunately, by the decision of the Verkhovna Rada in September, Ukraine encourages Russia to advance the second strategy – the export of finished products with high added value. Thus, by selling electricity to Ukraine at low prices, Russia removes Ukraine from the European market with clear prices and rules of play and returns Ukraine to an electricity market with ambiguous and non-transparent prices. How Ukraine’s energy security will be affected in the future and the process of electricity price formation is yet to be analyzed. From a political point of view, however, this decision seems to be a disaster that virtually nullifies Ukraine’s efforts in Brussels to maintain sanctions against Russia. You cannot ask for sanctions against Moscow and at the same time buy electricity from an aggressor country.
The real stake, however, is Transnistria
The decision of the Verkhovna Rada can hit us from another direction – Transnistria. Today, Russian gas supplies to the Cuciurgan Power Station are seriously endangered due to the deadlock in negotiations between Gazprom and Naftogaz companies on the transit of Russian gas on the territory of Ukraine after 2020. The Russians cannot admit to stopping the operation of this station – by blocking its activity, Transnistria will remain without electricity. Such an eventuality will greatly undermine Moscow’s positions in negotiations with Kiev and force it to make important concessions for fear of losing this geopolitical slump in Eastern Europe. Therefore, the decision of the Verkhovna Rada to accept electricity imports from Russia resolves this difficulty immediately and can be seen as a tool woven with the ability of Russian siloviki (literally translated as “people of force”, originated with the phrase “institutions of force”, which appeared in the earlier Boris Yeltsin era to denote the military-style uniformed services, including the military proper, the police, national security organizations, and some other structures) to make a “break” to Transnistria with the hands of Ukrainians. Thus, negotiations with Ukraine’s Naftogas will continue to be frozen and electricity will be exported incessantly to Transnistria through the territory of the neighboring country.
Such a situation will fall extremely badly in Moldova and will constitute a new signal for the strengthening of the pro-Russian vector in Chisinau. Given that Ukraine gives its aggressor a green light and ensures free access in Transnistria, the pro-western party in Moldova will receive a new kick that will suggest the failure of the country’s pro-European course.