The price of balance electricity reached 15.85 tetri in October, marking an annual increase of around 4.5%. According to sector representatives, the primary factor driving this rise is the growing number of new power plants operating under guaranteed purchase agreements.
As Merab Lominadze, founder of ET SYNERGY, explained to BMG, the terms of these agreements, now extended to cover the summer period as well, require the state to buy electricity at elevated prices. As a result, instead of benefiting from lower seasonal costs typically associated with abundant hydro resources, the market saw a record price increase.
“Practically the only reason is the high-priced guaranteed purchase agreements (PPAs) under which several stations have already begun operating, especially over the past two years,” Lominadze said. “It is also important that PPA terms have been amended so that the state guarantees purchases even during summer months. Therefore, at a time when ESCO prices should have dropped significantly, we instead saw an increase and record figures compared to previous years.”
Maia Melikidze, Executive Director of the Renewable Energy Development Association (GREDA), believes the price increase stems from a combination of factors, most notably Georgia’s import dependence and ongoing energy deficit.
“In reality, electricity is a deficient product, we see this clearly. Georgia is an import-dependent country, and when a product is in deficit, price increases are inevitable,” Melikidze stated.
