Energy Poverty in Moldova: Social Assistance versus Technical Capacitation

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Publishing date: Friday, 24 January 2020
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Moldova’s legal framework in energy sector has improved significantly in 2016-2018, but only marginally in mitigating the ‘energy poverty’. Newly adopted horizontal and sectoral legislation put an emphasis on liberalization of the energy sector, correcting and balancing the positions of different stakeholders on the market, and requesting energy efficiency measures. Undertaking the EU energy acquis as part of the legal approximation to the European Union (EU) and Energy Community solidified the conditions for a better functioning of regulatory framework and a more sustainable development of energy infrastructure. The changes aimed at rehabilitation the functioning of the interconnected energy sub-sectors, with the expectation that the self-regulating capacities of the market will generate benefits for operators, policy certainty for the decision-makers and the regulatory body, and guarantees of energy supplies to consumers. Only partially, the acquired legislation reflects the peculiarity of Moldovan market’s capacity to subsist because of purchasing precarity of consumers, caused by low social payments and reduced financial resources of households.

Even if, the legislation operates with the notion of “vulnerable consumer”, it lacks plausible solutions that would target and solve the issue of ‘energy poverty’ that affects large categories of population. Understood as a situation when ‘individuals or households are not able to adequately heat or provide other required energy services in their homes at affordable cost’, ‘energy poverty’ touches upon several interdependent elements. First, low individual or households’ incomes undermine their financial ability to obtain energy-related facilities. Second, this type of poverty results from frequent episodes of politicization of the tariff policy by the market regulatory body, which diminishes the predictability and sustainability of energy prices. Third, the condition of energy poverty combines the inadequate energy efficiency in the maintaining of the livelihood, and only recently this started to be addressed. The majority of these aspects are largely overlooked in the energy landscape of legislation and public policy in Moldova. Thus, the current paper aims at explaining ‘if’ and ‘how’ the state authorities define ‘energy poverty’ in the current normative and policy framework.

The starting point in examining the energy poverty represents the incursion into the national legal framework that governs energy sector. Next, a set of indirect statistics features the manifestation of the energy poverty. Subsequently, the particularities of the tariff policy are brought attention. The description of the existing policies targeting socially related deficiencies to cope with energy prices follows. In conclusion, the paper tailors specific policy recommendation to address the issue in a comprehensive, systemic and sustainable manner. 

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This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of the author and do not necessarily reflect the views of the European Union.

Tags: Natalia Chitii

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