TBC Capital published Electricity Market Overview. According to its forecast, electricity consumption in Georgia will reach 15.4 TWh by 2026.
"As for the expected electricity demand, it is closely linked to real GDP growth. The expectation is for consumption to stabilize at around 5% annual growth. This stabilization is expected to push the total consumption to c. 15.4 TWh by 2026", - the document reads.
According to TBC Capital, electricity generation in Georgia reached 14.2 TWh in 2022, a significant 12.6% YoY growth. Growth was observed in all generation types, with thermal generation making the most substantial contribution to the increase. In 9M 2023, generated electricity reached 11.2 TWh, a 2% annual increase. Thermal generation continued to grow, meanwhile, hydropower posted a minor 0.2% decrease and wind power increased by 2.6%.
Electricity consumption in Georgia reached an all-time high of 14.2 TWh in 2022, a 3.1% YoY increase. The increasing tendency halted in 9M 2023, with the electricity consumption decreasing by 8.3% YoY. The reduction was mainly driven by decreased demand from direct consumers due to reduced output of metallurgical factories and a noticeable decline in cryptocurrency mining. On the other hand, retail consumers slightly increased their consumption.
In 2022, 0.97 TWh of electricity was exported, with Turkey being the primary destination, resulting in revenue of USD 84.3 mln. During 9M of 2023, exports increased to 1.5 TWh, with the Turkish market remaining the primary destination, generating revenues of USD 103.3 mln.
From 2015 to 2022, a total of 1,031 MW of installed capacity was added, including two large gas-fired power plants and one wind power plant. The majority of remainder consisted of run-off river plants.
With halted renewable capacity additions, the government introduced Contract for Difference (CfD) as a support scheme for renewable project development. The private sector participated in the first capacity auction in February 2023, resulting in 26 renewable projects with a total installed capacity of 296 MW. Second capacity auction date is set for November 2023.
The regulatory changes aligning with the EU legislation have led to significant market reforms in Georgia. The unbundling of distribution system operators has been a major achievement. Further changes in the form of transitioning the electricity market to a new model has been postponed numerous times due to market readiness with the final date set to be in July 2024.
The new market model will comprise of the day-ahead market, intraday market, bilateral contracts market, and balancing market, making the Georgian electricity sector more competitive and efficient.
Georgia is investing in expanding transmission capacities to its neighboring countries, which will enhance the system’s reliability and cross border trade capabilities.
