Thursday, January 11, 2007

Electricity Crisis in Moldova: a Single Extraordinary Event or Should We Expect More?

The recent electricity crisis that occurred in the rural areas of Moldova as a result of a strong snowstorm (3-4 January) revealed a high degree of vulnerability of the country’s electricity networks to extreme natural phenomena, which due to global warming, are expected to become more frequent and severe in the future. According to official data , about 500 settlements in the southern and central parts of the country have been cut off from power. Although the raion (district) centers were reconnected quickly, many rural areas are still in darkness.

Some consider this situation as the worst energy crisis in the last twenty years. Although all discussions in the media are focused on how the private power supplier, Union Fenosa, and Government dealt with the crisis, I’m more concerned about the causes that triggered this situation. One obvious reason is the unusually bad weather conditions. However, given that we cannot change the weather and such conditions might occur pretty often in the future, having electricity poles fall like domino all over the country does not appear as an attractive scenario at all. Secondly, the power infrastructure, like any other type of infrastructure in the poorest country in Europe, must be pretty old and worn-out. According to my knowledge, the Spanish private supplier, Union Fenosa, was supposed to make significant investments in the electricity infrastructure. According to the severity of the crisis, the investment has been either of low quality or extremely limited. I wonder as to how the Government regulates and monitors such investments of one of the largest monopolies and most important public utilities in the country. Thirdly, based on the experience of other under-developed countries, it wouldn’t be far-fetched to assume that neither the Government nor the supplier had a well-rehearsed and operational emergency plan to be used in such situations, therefore the great delay in restoring power supply to final consumers. In my view, these could be the main factors (but not the only ones) that contributed to the ongoing electricity crisis in Moldova. In order to avoid such situations in the future, these factors should be addressed immediately and effectively by both Government and power supplier.

Comments:

Tom , January 13, 2007  

We have a problem with power in the US too. In the 80s, power generation was deregulated and now it’s very efficient with an oversupply of capacity. But the transmission grid is still highly regulated, so it’s a bad business to be in and there’s no investment in it. There was a huge blackout in the Northeast a few years ago and nothing has really been improved in the grid.