Georgia Alternative Energy

Sector outlook

With a view to reduce its dependence on imported oil and gas, Georgia promotes the development of hydropower and other renewable sources to replace thermal generation. The country is endowed with a huge potential for hydropower production (32 TWh or 7.27 MWh per capita). While there is substantial potential for other renewable sources such as wind, solar, biomass, and geothermal, they lag far behind in terms of cost-effectiveness.

Net importer of electricity before 2003, Georgia is now self sufficient and became a net exporter of electricity to Turkey, Azerbaijan, Russia and Armenia after 2007.

Strategic direction/ specific schemes and incentives

The government liberalised the energy sector and launched specific programmes for alternative energy:

  • Programme "Renewable Energy 2008": preparation of a list of HPPs to be built under the Build-Own-Operate (BOO) model, elimination of tariffs, grid connection fees and export license requirements for newly built HPPs, priority access to Turkey, guaranteed purchase for 3 winter months, increased profit from the sale of carbon credits, no license requirement for HPPs of less than 13MW;  

Business opportunities

  • Development of greenfield HPPs under the BOO model: prefeasibility studies for 43 small and medium HPPs (each up to 100 MW) and interactive map of potential other HPPs on the website of the Ministry of Energy and Natural Resources of Georgia, bigger projects subject to government’s resolution; 
  • Development of geothermal energy (700-800 GWh), notably for heating greenhouses; 
  • Development of wind (estimated achievable potential of 5 TWh), biomass (3-4 TWh), solar (60-120 GWh), energy (estimated achievable potential of 60-120 GWh)  
  • Provision of modern technology and expertise on energy efficiency for the industrial and residential sectors

Some success stories

Energo-Pro (Czech Republic), which established its Georgian subsidiary in 2007, now owns 10 HPPs and has 5,200 employees.

Georgian Urban Energy, the Georgian subsidiary of the Turkey’s Anadolu Group, will build and operate a 87 MW HPP in Paravani, with co-financing from EBRD and IFC. The company will also build a 32-kilometer transmission line connecting the HPP to the power distribution system at a new substation near Agara that will be constructed as part of another project.

Useful links and contacts

Georgian Chamber of Commerce and Industry

Georgian National Investment Agency

Ministry of Energy and Natural Resources of Georgia

Georgian Energy Efficiency Center

This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of EUROCHAMBRES and can in no way be taken to reflect the views of the European Union.

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