Georgia had a positive trade balance in electricity trade in 1H22, first time in a decade, according to Electricity Market Watch - 1H22 recently published by Galt & Taggart.
In 1H22, export of electricity stood at US$ 55.8mn, import at US$ 34.7mn, resulting in positive trade balance of US$ 21.1mn, the report reads.
On the one hand, energy crisis and global price growth of energy products impacted Turkey, key export destination of Georgia – where prices tripled. On the other hand, the energy crisis did not affect our import providers - Russia and Azerbaijan - as they are price setters on the global energy market. Price of electricity import from Russia and Azerbaijan to Georgia increased, but not so significantly to cause any dramatic changes on local market prices. Therefore, Georgian companies benefited from current energy crisis with increased revenue from electricity exports to Turkey, while prices on local markets increased far below global trend:
* Prices of electricity in Turkey tripled y/y and went up to USc 14.5/kWh in Jun-22, in line with price surge of natural gas globally. Georgian exporters benefited from this growth – gaining historic high revenue of US$ 51.2mn from electricity export to Turkey in 1H22. Export of electricity in Turkey started in May and will probably continue until end of August with some limited volumes. Despite high demand and price growth expectation on Turkish market, export of electricity is limited by Georgian regulation - prohibiting electricity exports when electricity import is needed.
* Price of imported electricity also increased, but this growth was far below exported price. For example, price of electricity imported from Azerbaijan stood at USc 7.5/kWh in 1H22, up from USc 4.6/kWh in 1H21 (+62.1% y/y), while electricity export price is at USc 14.5/kWh.
* Balancing electricity price in Georgia increased by 21.9% y/y to USc 5.7/kWh. The main reason is growth of average import price, the report states.
