List of Questions on Moldovan Renewable energy bidding project from interested companies
Question 1:
The document introduces that our company needs to provide the technical design of the Moldovan bidding project, grid connection application and other related documents,
Is it understandable that if we do not have a new energy project that has already been developed, we need to set up a consortium with local Moldovan developers (companies that have the right to develop the project) to bid for the project?
For question 1, our concern is:
(1) At this stage, we have not contacted any mature local energy development companies to form a consortium. It takes a process to understand the background of the cooperation details between the two sides, and the bidding time is quite tight this year.
(2) If there is the possibility that the Moldovan association, investment promotion or other organization help to introduce consortium partners?
In order to stimulate competition, at the stage of participating in the auction, the Regulation on the conduct of auctions for offering the status of large eligible producer, allows investors to participate in the auction even in the absence of certain permissive documents, such as the Connection Notice, land ownership documents, proof of change of land use, environmental agreement, provided that the investor submits a roadmap setting out the terms for obtaining these documents.
It is worth noting that in this case, in addition to the contract performance guarantee, the Tender Commission will also block the bid guarantee which will only be returned once the roadmap has been completed.
Another facilitating element is the mandatory condition of being registered in the Republic of Moldova, offering equal chances to obtain the status of large eligible producer, to all investors wishing to develop/build a plant for the production electricity from SRE, with the preservation of admissibility criteria that ensure the evaluation of investors from the point of view of integrity. Additionally, investors can enter into a consortium agreement or join together to participate in the auction and submit their bids. In this case, the associated investors are considered as one investor, and the authorized representative with whom they communicate during the bidding process is indicated in the offer. The legal entities, which are not registered in the Republic of Moldova, including consortia, which have been declared winners of the auction, within 60 calendar days from the moment of the announcement of the results by the Auction Commission, are obliged to go through the state registration procedure of the legal entity in the Republic of Moldova and to present to the Tenders Commission the copy of the enterprise registration decision or the extract issued by the state registration body, in order to approve the decision on offering the status of large eligible producer.
Please note that investors will have at least 2 months to examine the tender documentation before the opening of the bidding period. At the same time, the bidding peroiod will last at least 5 months, which is long enough to identify partners.
In the process of identifying partners the Ministry of Energy encourages cooperation with the public institution, Invest Moldova[1], chambers of commerce and industry as well as renewable energy and business associations.
Question 2:
The total number of bids in 2024, as well as the highest bid price documents, have been clear.
If our price did not win the bid may lead to the loss of investment with the consortium company in the early stage, what kind of the cooperation will the Moldova authorities could provide for the unsuccessful projects ? Such as signing a 15-year PPA contract with the lowest price of the winning-bidding price, or participating in the electricity spot trading market (non-PPA).
- If the offer was not declared the winner in the bidding process for the granting of the status of large eligible producer, the investor could sign a contract for the supply of electricity produced from renewable sources with an electricity supplier or trader under market conditions, at negotiated prices.
At the moment there are a series of investors who have developed projects strictly for the free market, others are exporting the electricity to Romania or Ukraine.
In addition the Renewable Energy Law establishes the mechanism of long term contracts of sale and purchase of electricity from renewable sources, which provides the follows:
Producers of electricity from renewable energy sources and universal service providers shall be entitled to negotiate and sign long-term take-or-pay contracts for electricity from renewable energy sources under the following conditions, which must be met cumulatively at the time of signature:
(a) the contract price is at least 10% lower than the lowest fixed price set in the most recent auction held under Article 35 for the same technology;
b) the contract does not exceed 15 years;
c) the electricity generating equipment used is not older than 48 months at the time of commissioning;
(d) the installed capacity per generating site does not exceed 18 MW.
(2) The total installed capacity for which long-term contracts for the sale and purchase of electricity from renewable energy sources may be negotiated shall be determined by the Government, in accordance with Article 10(e2), for each universal service provider in proportion to the market share held by that provider.
IQuestion 3:
Is the winning-bidding PPA price for a 15-year contract period tied to EUR or USD? Example: the winning price is 75 EUR/MWH and the monthly exchange rate for the Moldovan currency is bound to the local currency.
The National Agency for Energy Regulation adjusts the fixed/exercise prices established in the auction depending on the evolution of the exchange rate of the national currency against the US dollar, in accordance with the methodology approved by the Agency.
Question 4:
After the PPA is awarded, is the power sale and purchase contract signed with the Moldovan Electricity Authority, or with the designated power distribution company ?
If we sign the contract with the designated distribution company, could you provide the company's name?
Also, how could Moldova protect the investor's profit if the distribution company has the operational problems that could not perform the contract ?
Producers who have obtained the status of large eligible producer, sign the contract for the purchase of electricity[2] produced from renewable sources with the central electricity supplier* (ENERGOCOM JSC[3]).
* central electricity supplier – supplier designated by the Government to procure electricity from eligible power plants that produce from renewable energy sources, as well as electricity produced by urban heating power plants, and supply it to the electricity market at prices regulated, approved by the National Agency for Energy Regulation, under the conditions of this law.
In order to ensure that ENERGOCOM JSC will have the means to cover its obligation as central electricity supplier, the RES law establishes that the costs related to support schemes and the activity of the central electricity supplier shall be recovered through the regulated price for electricity from renewable sources approved by the National Agency for Energy Regulation imposed and paid by all electricity suppliers supplying electricity to final consumers.
ENERGOCOM JSC shall act in accordance with the rules of corporate governance, shall have financial credibility, keeps separate accounting accounts in its accounting system for each of the economic activities carried out and avoids cross-subsidisation between them.
ENERGOCOM JSC shall have financial means (cash) equivalent to the forecast payments for a period of one month for large eligible producers established in the tender procedures and small eligible producers in accordance with the signed contracts.
Question 5:
Is there any restriction or sanction lists by Moldovan authorities on the use of Chinese new energy equipment?
Is it possible to obtain loan financing from local banks for investment in new energy projects in Moldova?
- There are no restrictions on the use of energy equipment in China. Persons who are going to build power plants with used equipment or with new equipment manufactured more than 36 months before the plant's commissioning cannot participate in the auction and to meet a list of IEC standards that will be available for public consultations starting from next week.
In the Republic of Moldova, it is possible to obtain financing through loans from local banks for investments in energy projects however the investors may approach local banks to discus the financing terms.
Question 6:
Is the Moldovan Ministry of Energy only tendering the EPC（Engineering Procurement Construction） contract to hire a construction company to build the projects, or is the Ministry offering those projects for sale and trying to find buyer of the projects?
After having participated in the tender and obtained the status of large eligible producer, the producer shall, for 15 years from the commissioning of the power plant, have the right to sell the entire quantity of electricity delivered to the electricity grids at the fixed price set in the tender.
Technically the owner and operator of the plant will be the investor or the members of a consortium, The government through ENERGOCOM JSC will be the beneficiary of the electricity the project will generate.
Question 7:
If the Ministry is offering the projects for sale, then could you please provide more information about: grid connection requirement, sale of electricity, regulation, etc.? That is to say, if our Fund invest/buy those projects and become an owner, then what requirements should we attain to have those projects connected to Moldovan electricity grid? To which institution should we apply for grid connection? Can we sell the electricity produced from the projects freely to companies in Moldova, or we could only sell the electricity to the electricity transmission company in Moldova?
The Government does not offer the projects for sale.
The grid connection permit is issued by the Transmission System operator MOLDELECTRICA SC[4].
The electricity produced from the projects which are not benefiting of large eligible producer status can be sold to energy traders or electricity suppliers (at the moment there are 81 companies who hold the electricity supplier licence), in addition the investor can apply at the National Agency for Energy Regulation of the Republic of Moldova (ANRE)[5] to obtain the electricity supplier license which will grant the possibility to supply the electricity directly to other companies/ consumers.
