The Romanian Commodity Exchange, through its subsidiary – BRM East Energy, accelerates the process of liberalization of the natural gas market in the Republic of Moldova, for the development of which the efficient functioning of the balancing market, the adaptation of fiscal policy to EU requirements, and the attraction of new players on the market are still needed. According to RCE President Gabriel Purice, the balancing market “will help to increase overall liquidity in the gas market as an indispensable first step in the development of spot and forward markets.” RCE is ready to provide the balancing entity in Moldova with such a functional electronic platform and the necessary tools to achieve this goal.

  

How do you assess the progress made by the Chisinau authorities in the process of reforming the energy sector and what are the main challenges they face in integrating into the European energy area?

Recent years have marked the beginning of a positive development, with Moldova taking important steps towards building an energy market aligned with European energy standards.

A significant milestone in this early stage is the institutional and functional unbundling of gas infrastructure companies, which has been beneficial in terms of decision-making independence and diversification of supply sources and routes. It is undoubtedly a key step towards increasing the country’s energy security.

The continuation and consolidation of the legislative process that has begun is imperative for the process of European regulatory harmonisation, as it is closely linked to EU accession negotiations and the country’s ability to attract new foreign investment in the sector.

At the same time, the legislative amendments to the Law No 108 on natural gas will oblige consumers to purchase gas on the free market, in a competitive and transparent discipline, from 01.01.2025. We are convinced that this amendment will be decisive in the development of a genuine, truly liquid market, with a major impact on the development of the country’s economy and to the benefit of economic entities and the population of the Republic of Moldova.

Without leaving the optimistic tone, we must point out that, naturally, there are still many aspects that can be improved in the process of modernization of the energy sector in the Republic of Moldova.

One of the most important challenges is the creation of a functioning balancing market, without which the functioning of the spot market is not possible. The natural next step is the introduction and use of modern trading instruments in current market activity, standard forward and futures contracts, as is the case in EU countries. At the same time, actions to diversify Moldova’s sources of supply must also be linked to making them competitive on stock exchange trading platforms, including by the central electricity supplier, a beneficiary of European loans.

At the same time, we consider it imperative to open up internationally and increase the number and volume of transactions for the purchase of natural gas from the European area, by using the existing transport infrastructure, such as the Iasi-Ungheni interconnection.

Last but not least, we believe that it is necessary to adapt the existing national legislation so that European companies authorised in this field, as is the practice in the EU, can participate directly in transactions on the wholesale gas market in the Republic of Moldova, without having to operate local entities in this area, making access more difficult and artificially increasing their operating costs. This would significantly speed up the liberalisation process, create the necessary conditions for obtaining attractive, competitive prices, and ultimately contribute to the country’s energy security.

 

How do you assess the involvement of the central authorities in Bucharest in supporting the development of a solid energy market in Moldova?

From our point of view and as far as we are concerned, the involvement of the central authorities in Bucharest, in particular the Ministry of Energy, beyond perhaps good intentions, is not the most inspired. Instead of supporting and coming into line with the voluntary efforts of Romanian actors interested in the Republic of Moldova and already present here, such as the Romanian Commodities Exchange, the Ministry of Energy is mainly concerned with the same insistent promotion of OPCOM, a state-run and protected institution within the country, for years in Romania.

The Romanian Commodity Exchange, as we have shown, has been investing in Moldova for three years. Without support and help, it has been involved in institutional building, it has shown that it is willing and able to help, it has contributed, at its own cost, to the foundations of the modern natural gas market in this country with a special significance, as we know, for Romania.

The Ministry of Energy, on the other hand, without consulting us or being interested in our opinion, initiated and signed a protocol with the counterpart ministry in Moldova to operationalise an OPCOM monopoly on the electricity exchange market, which is also being built in Moldova. Just as it did in Romania, ignoring the fact that – after years of efforts, including in court – the RCE has been fully authorised as a centralised energy market, and the nefarious monopoly has ceased de jure in Romania.

In order to better understand the attitude and preferences of the Romanian authorities, we mention that at the recent conference on the natural gas market organized by RCE in co-participation with the Moldovan authorities in Chisinau, the representative of the Ministry of Energy, to our astonishment, referred in his speech not to the gas market, but only to the electricity market, which was not mentioned at all at the conference, and not to the presence and efforts of the Romanian Commodities Exchange, but to the absent and obsessive OPCOM, which was neither present nor in question

It seems that the Ministry of Energy, regrettably, has not yet understood that in a market economy and in a democracy, it is not meant to be only the promoter of state institutions. Energy is an area of activity in which private economic operators are the main players, and they should be represented, on the basis of their merits and initiatives, or at least not obstructed by the authorities in advanced cross-border projects. To the benefit of external partners and even Romania itself.

 

What specific measures do you think should be implemented for the efficient development and functioning of the balancing market in the Republic of Moldova and how can these measures contribute to attracting new players to the market?

Providing balancing mechanisms has now become a condition for the functioning of energy markets. The best solution in this respect is to implement these mechanisms in turn through a market, i.e. a balancing market, as in Romania and other EU countries. In addition to its specific and dedicated function, this new market will help to increase overall liquidity on the natural gas market and is an essential first step in the development of the spot and forward markets. At the same time, it will implicitly allow all users to have access to competitive prices, contributing to the creation of a competitive environment, which will obviously attract new players to the market.

Based on its experience, RCE can provide the balancing entity in Moldova with such a functional electronic platform and the necessary tools to achieve this goal. Basically, this is one of our stated goals in the Republic of Moldova: to implement the same successful technical solution on the balancing market as in Romania, where as we know, the Romanian Commodity Exchange ensures in partnership with Transgaz the administration and operation of the balancing market of the natural gas market.

All these measures can only strengthen the Moldovan energy system and provide it with the necessary tools and conditions available in European countries, so that professionals in the field have the same conditions for participation as in their countries of origin and are thus motivated to access the Moldovan energy market.

 

How can BRM East Energy concretely contribute to the process of liberalization of the natural gas market in the Republic of Moldova and to the creation of an environment of fair and efficient competition between suppliers?

Over the last three years, Bursa Romana de Mărfuri has consistently invested in the development of BRM East Energy (BRM EE) and will continue to do so, wishing to offer users in the Republic of Moldova the same conditions and services as in Romania.

The simple fact that BRM EE operates and is a specialized stock exchange operator offering participants a market trading environment and solutions at European standards in the Republic of Moldova has created the necessary prerequisites for the development of a competitive environment in an economic context that was until recently monopolistic in the country.

Through its presence and activity in the Republic of Moldova, BRM East Energy actively contributes to the process of liberalization of the natural gas market in the Republic of Moldova and implicitly to the European path of modernization of the Moldovan economy, BRM EE platforms guaranteeing the transparency and fairness of gas sale-purchase auctions, obtaining a fair price for end consumers, as well as diversifying the sources of natural gas purchase and putting them in a real competition, thus increasing the energy security of the Republic of Moldova.

 

 

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The full interview will appear in the June 2024 printed edition of Energynomics Magazine.

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