Energy

Energy Consumption

Georgia’s primary energy supply is dominated by imports. Domestic energy production consists mainly of hydropower and bioenergy, with small amounts of coal (up to 2018), and oil and gas production. Virtually all the natural gas and almost 90% of the coal consumed domestically in 2018 were imported, and although two small refineries recently commenced operations, Georgia currently relies almost fully on oil product imports as well. Natural gas and oil products together formed over two-thirds of the total primary energy supply in 2018. Transport was the largest energy-consuming sector in 2018, responsible for 31% of total final consumption.

Fossil fuels make up 75% of Georgia Oil and natural gas are the main energy sources in final consumption. While oil products are used mostly in the transport sector, natural gas consumption is more diverse, as it is used for electricity generation (17% of total generation in 2018), in industry and in the residential sector. Transport was the largest consuming sector in 2018, responsible for 31% of total final consumption, followed by the residential and industrial sectors at 25%.

Electricity Demand

There are two principal sources for generating electricity in Georgia: Hydroelectric power plants (HPPs) - the primary source of electricity, and thermal power plants (TPPs). From 2007 to 2011, Georgia was net electricity exporter. Starting from 2012, the country has become a net importer of electricity, with the only exception being 2016. With the completion of the HPPs currently under construction exports are expected to grow in the summer period. However, without additional power plants, Georgia’s generation capacity will not be sufficient to meet domestic demand in the long term, as per capita electricity consumption and industrial sector continue to grow. According to estimates, the deficit by 2025 will reach more than 3 TWh. 

Hydropower plants

As of now, there are 19 licensed and about 50 small, deregulated HPPs operating in the country. The largest source of power generation is the Enguri HPP, which is responsible for the third of all power generated in the country. The Enguri HPP, along with the Vardnili HPP, that have large dams and can respond to change in demand, are considered as regulatory plants. 

Thermal power plants

Thermal power plants in Gardabani, are sources of guaranteed capacity. Their main purpose is to fill the lack of electricity in the system. Considering that TPPs ensure the stability of Georgia’s electric energy system, they have to be on standby in order to generate energy should the need arise. 

Electricity Grid Infrastructure

Georgia has well developed transmission grid infrastructure. The whole territory of Georgia is covered with over 3,000 km of high, medium and low voltage lines and about 100 substations. In 2013, a new 400 KV line with HVDC back-to-back substation connecting Georgia with Turkey was commissioned, adding to already significant transmission capacity with all neighbouring countries. As of now, cross-border transmission capacity stands at about 5,000 MW.

Transmitters

There are three electricity transmission licensees in Georgia: JSC Georgian State Electrosystem (GSE) (100% of stocks belong to JSC Partnership Fund), Energotrans Ltd (a subsidiary of GSE) and JSC Sakrusenergo (owned by the Ministry of Energy of Georgia and the United Energy System of Russia).

Investment opportunities

Hydropower

The abundant water resources of Georgia carry a significant potential of generating hydroelectric energy. The maximum potential capacity of Georgia’s 300 rivers fit for hydroelectric energy generation is around 15,000 MW, and annual generation is estimated at 50 billion KWh. 80% of exploitable water resources are not being used. Low costs of hydroenergy increases its competitiveness and stirs investors’ interests in its favour. Agreements on new HPPs are concluded on BOO (build, own, operate) basis. Also, new hydroelectric power plants are deregulated.

Solar

Due to the geographical location of Georgia, in most regions of the country, there are 250-280 sunny days in a year, which is approximately 1,900-2,200 hours per year. The annual radiation of the sun varies depending on regions from 1,250-1,800 KWh/m2, while the average sun radiation equals 4.2 KWh/m2.

Wind

Success story of wind power in Georgia is Qartli 1 project, which was the first wind power plant project in Georgia, in the area of Gori and Kareli municipalities, with installed capacity of 20.7 MW and annually generated electricity equivalent to 84,100 mWh. Qartli Wind Farm was awarded as a best Renewable Energy Deal of 2016 by EMEA Finance. The project was privatized by the end of 2019.