The electricity sector in Georgia had an outstanding year with record high export revenues of US$ 84.3mn and a positive trade balance of US$ 43.2mn. Growth in electricity exports revenues reflected high prices as Georgia remained net importer in kWh terms with a net import of 0.6 TWh, reads the recent publication of Galt & Taggart on Georgia's Energy Sector - Electricity Market Watch | FY22.
According to the publication, "prices on local market increased far below global trend, rising by only 5.5% to USc 5.7/kWh. Georgia was not impacted by global energy crisis, due to a high share of hydro generation in the supply mix, a regulated market structure, the availability of “social gas” for thermal power plants, and a moderate increase in import prices from Russia and Azerbaijan.
Electricity consumption increased by 3.3% y/y to 14.2 TWh, with a 9.8% y/y increase in 1H22 and a 2.7% y/y decrease in 2H22 due to reduced production at Georgian Manganese, metallurgical and data mining companies. In 2022, HPPs accounted for 68.3% of total supply mix, TPPs for 21.5%, wind power plant for 0.6% and 9.7% was imported electricity.
First capacity auction for 300MW of renewable energy was announced on February 10, 2023. Bids are collected within 45 calendar days. Auction winners will sign contract for difference agreement with ESCO for 15 years of power plant’s operation (see auction details here and here).
7 small hydro power plants were commissioned in 2022, with a total installed capacity of 26.9MW. The largest was the 10.0MW Nakra HPP, while the smallest was the 0.9MW Berali HPP. As of end-2022, Georgia's total installed capacity is 4.5GW, of which HPPs account for 3.4GW, wind power plant for 0.02GW, and 1.1GW are thermal power plants. With the introduction of a Contract for Differences (CFD) as a new support mechanism for the development of renewable energy, we anticipate an increase in investor interest and acceleration of capacity additions in coming years," the report reads.
