CEIC News@lert: Georgia’s Expanding Electricity Generation Sector

25 March, 2014 - HIGHLIGHTS Georgia is ranked eighth out of 189 countries according to the World Bank’s Ease of Doing Business Index 2014. This, coupled with the country’s huge capacity for natural resource electricity generation, makes Georgia an attractive investment location for energy companies. The abundance of hydro resources makes the hydroelectric power plants a dominant component of the energy market with high potential for further expansion. The hydroelectric sector accounted for 78.5% of all electricity supply in Georgia in 2013. Through deregulation of the electricity sector in recent years, state-owned companies are being privatized while the market is increasingly opening up to private investors. Increased competition and foreign participation in the Georgian electricity generation sector are still the main goals for policymakers. Monthly data on electricity supply can be useful when assessing the most recent developments in the sector and analyzing the seasonal trends. Gross electricity supply amounted to 894.1 GWh in February 2014, increasing by 8.2% compared to the same month of the previous year. The total figure encompasses electricity generated in thermal and hydro plants, as well as imported electricity. The major contributor to the increase was the thermoelectric sector, where generation increased by 16.7% on an annual basis, while the hydro plant production increased by 2.1% during the same period. Imports of electricity usually increase at the beginning of the year, due to the seasonally low capacity utilization at the hydro plants. The trend continues until April when the generation at hydro plants gradually starts to gain pace and reaches its peak during the summer months. Depending on the climate conditions and level of domestic demand, the country is usually left with spare electric capacity during that time of the year and this is exported to neighbouring countries. The annual disaggregation of export and import data shows a deteriorating electricity trade balance during the past two years, contrary to the previous persistent trend of positive balances. That is mainly attributable to the adverse climate conditions during 2012 and 2013 and rising domestic consumption. It is estimated that Georgia has vast water resources that are not yet fully utilized in electricity production, thus the prospects of the country’s energy sector seem promising. By further stimulating private investment in the sector, the country is trying to increase its electricity production volumes and supply, not only for use in the domestic market but also for exporting to neighbouring countries. Important measures have been taken in the direction of creating an attractive investment environment and the results are clearly visible, with the country’s high Ease of Doing Business ranking leaving most EU countries behind. Moreover, apart from utilizing new hydro power sources, more sustainable and effective manufacturing processes can be implemented in order to conserve electricity consumption. Wind energy is another potential resource in Georgia that can generate substantial amounts of electricity. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
25th March 2014 CEIC News@lert: Georgia’s Expanding Electricity Generation Sector

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