Moldovans can save MDL65 million annually on electricity, a behavioral experiment shows

How do we help the population during an energy crisis, when tariffs are constantly rising and the state and suppliers are looking for options to secure provisions, even at high prices? The first thought is for the government to pay subsidies and compensation to all or at least those affected by energy poverty. But the government does not have its own money except the funds collected as taxes and fees from taxpayers. Respectively, before spending, methods that do not require additional costs should be employed.

Given that the cheapest energy is the one you haven’t consumed, the EU-funded “Addressing the impacts of the energy crisis in the Republic of Moldova” programme implemented by UNDP Moldova aims to reduce the energy costs of domestic consumers through a social experiment. The experiment was conducted in partnership with Premier Energy, the electricity supplier, in 2019 and, during the COVID-19 pandemic in 2020, on a smaller scale.

In February 2022, the experiment was scaled up nation-wide, with about 300,000 customers with high consumption receiving letters or emails from the energy supplier urging them to take simple actions that would lead to energy savings. The printing and sending of letters were funded by the EU programme.

“We started from the calculation of an average consumption of 140 kW/h monthly for a household. Consumers received statistics, which compare their data with those of the more energy efficient consumers in their community, as well as tips and solutions for saving energy, while encouraging them to pay their bills online, as a safety measure in the conditions of the pandemic, but also for time efficiency. In addition, Premier Energy’s monthly bill has been improved and contains more useful information to reduce consumption,” says Dumitru Vasilescu, Policy Specialist at UNDP Moldova.

The behavioral programme achieved virtually the same results as similar experiments conducted by Opower, a company in U.S. Among its advisory board members, the company has Robert Cialdini, business writer and the author of “The Psychology of Persuasion”.

The Opower experiment is a follow-up to the one pursued by Robert Cialdini a few decades ago. Having identified simple actions that contribute towards the reduction of energy consumption, he formulated four messages regarding:

  1. environmental protection (protect the environment by conserving energy);
  2. social responsibility (contribute to energy conservation for future generations);
  3. self-interest (save money by conserving energy);
  4. descriptive norms (do as your neighbors who consume less energy).

In the end of the experiment, it was found that three out of four groups of consumers spent even more energy in the following period, except for those who were urged to follow their neighbors with lower consumption. The experiment was conducted repeatedly and the one in Moldova confirms: neighbors remain the best motivation.

“The exercise conducted in collaboration with the EU and UNDP Moldova demonstrates that our domestic customers, who received letters on their level of electricity consumption, managed to achieve an average decrease of 1.33% in energy consumption, i.e. 2.64 kWh/month. If this savings system was maintained for all household customers at country level for one year, the total savings for the annual electricity bill could exceed 65 million lei. We are happy to be able to contribute to the energy efficiency of our customers,” emphasizes Jose Luis Gomez Pascual, Country Manager of Premier Energy Moldova.

In the United States, households receiving such letters cut their consumption by 1.4-3.3%, and the average was 2% or 0.62 kWh per day. In Moldova, the decrease ranged between 1.33% in rural areas and small towns and 3.8% in Chisinau municipality.

“For the moment, things seem difficult, but with a smart, reasonable energy saving we will get through this difficult period more easily, until things stabilize internationally. Importantly, we should be aware that, with small steps, we make big savings. In addition to the responsible savings that each of us should make, we are working on applying several energy alternatives, so that this is no longer a burden on the consumer.”

Constantin Borosan, State Secretary at the Ministry of Infrastructure and Regional Development

A recent UNDP analysis shows that 60% of Moldova’s population lives in energy poverty, spending more than 10% of their budgets on energy bills. “Addressing the impacts of the energy crisis in the Republic of Moldova” programme will support the acceleration of the transition towards green energy by promoting energy efficiency and renewable solutions provided by the EU Green Deal.

With a budget of €10 million allocated by the European Union, the programme will launch a campaign to replace old appliances with new and energy-efficient ones, finance the installation of photovoltaic panels in households and several hospitals, as well as the replacement of district heating systems in many blocks of flats with much more efficient horizontal distribution systems.

Furthermore, the programme envisages support for the transposition of the EU Third Energy Package into both primary and secondary legislation, as well as a series of Directives and Regulations of “Clean Energy for all Europeans” package, which addresses the energy performance of buildings, renewable energy, energy efficiency, good governance, and the design of the electricity market design.