Reliable Heat and Light in Moldova's Homes and Hospitals

Moldova has few energy resources. To supply citizens, businesses and government with power, the country has to import oil, natural gas, coal and electricity. And Moldova has had to adjust to a dramatic shift from Soviet times, when cheap energy discounted the need for energy efficient homes and commercial buildings, and the politics of giving people free energy trumped the economics of delivery and use.

The post-Soviet shift to higher energy prices meant that for most of the 1990s hospitals, schools and other social institutions left their dwellers shivering in the cold. Once wealthy state-owned industrial facilities went bankrupt or put locks on their doors altogether, while citizens—many of them impoverished—faced power cuts and struggled to pay utility bills.

Solving these challenges fell to Moldova's policymakers. A steady supply of electricity was needed for citizens and industry—in order for industry to be productive and competitive. And the state had to find ways to heat social institutions and to make heat and light affordable for the home user. At first, domestic consumers' utility bills were subsidized, which accrued a large public debt.

Making existing buildings more energy efficient is one solution that the Moldovan Government has been working on with support from the World Bank and the government of Sweden. The Energy II project is improving heating and lighting systems in public buildings. New boilers, windows and other improvements have been made in 23 schools and 12 medical institutions, benefiting over 27,000 students and teachers, and about 1.2 million patients, staff and visitors.

One beneficiary, the main hospital in the town of Orhei, received about $650,000 to modernize its heating system.

Orhei hospital was once a cold place where hospital staff filled old soda bottles with hot water and stuffed them into cribs to keep newborns warm. Today, with a new heating system and a modern boiler, this is history.

The project also improved the quality and reliability of Moldova's electricity supply. It invested in Moldelectrica – the country's national power transmission and dispatch operator – so it could upgrade its equipment, including high voltage circuit breakers at priority substations, modern metering systems, and a new SCADA (Supervisory Control and Data Acquisition) and telecommunications system to relay power more reliably, safer, and with fewer losses.

New equipment and upgrades mean more reliable power transmission and dispatch, facilitated remote control of substations to ensure that dispatch is consistent with commercial contracts, modern metering to provide reliable measurement of energy flows on the electricity market, and, that repairs are made faster and are safer for personnel.

"Certainly, labor security has also improved significantly… The life of the regular consumer changed, we ensure a more viable electricity supply," says Dorin Raileanu, Chief Engineer at the Central Branch of Moldelectrica.

Outage rates in the transmission system have been reduced by 59 percent, non-technical losses have been reduced to almost 0 percent and Moldelectrica's technical losses have been reduced by about 5.65 percent. A new metering management system makes it easier for the company to bill consumers and track their payment records.

Moldova's dependence on foreign energy supplies will continue to raise new challenges for the country's political leadership. As energy prices go up the government is targeting heating subsidies to reach the most vulnerable. But reforming the sector is no easy task.

Moldovan companies still need to produce more cheaply using less energy to remain competitive. Large investments in modern equipment are needed, and make this a difficult challenge. The need to reform the residential heating system is ever more pressing, with large energy losses and weak management.