The current year was one of the most important periods for Georgian power sector. 2016 year has faced many challenges, however currently energy sector has to deal with many other obstacles.
Developed power sector preconditions social and economic welfare. Consequently, main objective of energy strategy is to provide safe, clean and affordable energy for population of Georgia and business sector. In this respect, the key challenge of the energy strategy is to harmonize energy system development with economic development of the country and ensure sustainable development of the sector due to growth in energy consumption.
Active job is being performed in this direction and this is reflected in many aspects. Georgian energy strategy calls for employment of domestic energy resources and development of electricity trade opportunities.
Moreover, this year Georgia joined European Energy Union. Georgia has been striving for integration into European family for many years. This is the policy declared by the Authorities and consequently, integration into European and Euro-Atlantic structures is an irreversible process. Naturally, energy sector cannot miss this process. In October 2016 at the European Energy Union ministerial, the members signed a protocol on Georgia’s inclusion into foundation agreement of energy union. As a result, Georgia has become official and plenipotentiary member of the Energy Union.
The year of 2016 was also important in terms of introduction of alternative energy resources. Namely, Georgia’s first wind power station was built near Gori. Six wind-driven turbines with 3.45 megawatt installed generation each have been already installed. Total installed generation of the station is 20.7 megawatts. It should be noted that Georgia’s first wind power station has already started electricity generation within the united power system.
It should be noted that this year Georgian National Energy and Water Supply Regulatory Commission (GNERC) has considerably improved consumer rights protection issues. Namely, according to decisions taken at a public meeting of the commission on existing disputes between citizens in electricity, natural gas and water supply sectors, total of 4 018 458 GEL were written off from citizens. Naturally, this tendency improves quality of protection of citizens rights and consequently, we welcome GNERC has started this practice.
The year of 2016 was also very important in terms of improvement of international ratings. According to Doing Business 2017 report of World Bank (WB), Georgia has improved positions by 26 places in terms of electricity generation and moved to 39th place from 65th position. The report reads that electricity supply reliability has improved, because penalty sanctions were introduced for breaking determined norms of frequency of electricity supply disruption (SAIFI) and medium duration of electricity supply disruption (SAIDI). Moreover, awareness of citizens of planned cessation of electricity supply has been also improved. Naturally, the mentioned achievement is an important advancement, because improvement of positions in similar ratings gives a positive signal to investors, because free access to energy resources persuades investors to simpler take decisions on making investments.
As to investment projects implemented by the field companies for infrastructure improvement, it is worth noting that distribution companies operating in the power sector have spent quite huge funds. Namely, in 2016 JSC TELASI spent 18 575 135 GEL on 24 investment projects, while JSC Energo Pro Georgia implemented 71 investment projects and spent 37 716 948 GEL investments.
In the future, Georgia’s economic development perspectives may be considerably hampered because of energy deficiency in the event internal resources will not employed in optimal way. For the purpose of balancing dynamics of consumption of energy resources and improving parameters of energy security, it is necessary to carry out a number of measures such as: faster and more reasonable use of domestic energy resources, creating competitive market and investment environment, implementing energy efficient measures and diversifying imported energy carriers.
In the future, according to various scenario for energy sector development, Georgia’s annual energy consumption is expected to rise by 44-90% by 2026 and reach 231-305 thousand terajoules. In the same period, natural gas consumption may increase by 67-11%, oil products consumption may rise by 28-30% and electricity consumption may grow by 32-78%.
In Georgia nonindustrial sector is a main consumer of energy resources (household economies, private and state services, agriculture and so on) (about 44%). Major part of energy consumed by them is natural gas (39%) and electricity (32%). As to industry, its ratio in total energy balance is about 15% (distribution of resources: coal – 47%, electricity – 40% and natural gas – 13%). This is a very low indicator and it signifies development of industry sector will radically change the existing situation.
Today it should be noted that automatic regulators of the existing hydro power stations are outdated or disordered. A major part steam power stations are amortized. Consequently, in the existing situation rational employment of Georgia’s rich hydro resources acquires a special importance.
Namely, Georgia power sector development strategy should prioritize the construction of hydro accumulating stations that will considerably improve energy security and reduce dependence on imported energy in deficient period of winter.
Specific and efficient steps will accelerate the process of constructing hydro power plants on the river Enguri, namely, Khudoni, Nenskra and Namakhvani HPPs, in upper chain of the river Enguri basin.
Naturally, the mentioned stations will reduce seasonal deficit thanks to their seasonally regulated systems.
Besides the above-mentioned factors, challenges in natural gas sector are also very important.
Preparatory works are being actively carried out for gas storage tank construction that will ensure gas supply to consumers in emergency situations and reduce problems arisen from seasonal misbalance between supply and consumption.