Georgia’s net import of electricity in 2017 is expected to come in at 1,007.4GWh. By comparison, Georgia was a net exporter of electricity in 2016, albeit with only 80.1GWh of net export. Electricity export was up 22.6% y/y to 684.7GWh in 8M17, while imports more than doubled to 962.3GWh. Based on the updated annual forecast, electricity import in 2017 is expected to reach a historical high of 1,692.0GWh (+253.3% y/y), with net import of 1,007.4GWh.
Turkey remains the main export market, with a 41.4% share in total exports in 8M17. Exports to Turkey were down 3.6% y/y from an already low base in 8M16 (-15.9% y/y), largely due to lower average prices on the Turkish market. Electricity exports to Armenia and Russia posted significant growth. Export to Armenia was up 23.3% in 8M17, from an already high base in 8M16 (+57.4% y/y), and accounted for 20.1% of total electricity exports. Electricity export to Russia was up 77.5% y/y in 8M17 and accounted for 38.3% of total exports, with ESCO being the sole exporter. The reason behind the increase in export to Russia was an unexpected surplus of generation in June and July and inflexibility of other markets to import additional electricity on short notice. Overall, ESCO accounted for over half (53.6%) of the electricity exports in 8M17.
TPP tariffs were revised downward for the rest of 2017. The reductions varied from 6.9% for Mtkvari Energy (down to 11.358 tetri/kWh) to 25.4% forGPower (down to 10.537 tetri/kWh). The reason behind the reductions, as stated by GNERC, is the difference between planned and actual data, including exchange rates. While changes in US$ terms were insignificant for Mtkvari Energy and Gardabani CCGT, the tariff for Blocks 3 and 4, owned by Georgian International Energy Corporation Ltd (GIEC), was lowered 13.6% in US$ terms and 23.0% in GEL terms.
Georgia’s overall energy security was rated 3.7 out of 5, according to a study conducted by World Experience for Georgia, a non-profit organization specializing in energy security, economic sustainability, and environmental issues. The highest risk category (E) was assigned to natural gas, due to the highest import dependency (99.7% in 2016) and lack of reservoir capacity. The lowest risk category (A) was assigned to hydropower, taking into consideration variability, risks, and resilience associated with hydro supply.
Domestic consumption increased 14.4% y/y in August 2017. Consumption by eligible consumers, up 66.0% y/y, was a key driver, with Georgian Manganese doubling its consumption (+102.4% y/y) to 114.9GWh, a historic maximum for the company. Consumption of distribution companies, up 10.5% y/y, also played a significant role in overall growth. Consumption was up 8.6% y/y by Telasi, 11.7% y/y by Energo-Pro, and 8.7% y/y by Kakheti Energy Distribution. The Abkhazian region’s electricity usage was up 1.7% y/y and accounted for 11.2% of domestic consumption.
Electricity import accounted for 6.6% of total electricity supplied to the grid in August 2017. Domestic generation increased 8.1% y/y, with HPP generation up 5.5% y/y (85.2% of total). Thermal generation increased 31.3% y/y (7.5% of total) from the low base in 2016 (-33.9% y/y), while the new wind power plant accounted for 0.8% of total electricity supply. 2.3% of total electricity supply was exported. Deregulated HPPs posted a significant increase in generation (+37.6% y/y), due to the addition of Dariali HPP (108.0MW) and Khelvachauri HPP (47.5MW). The commissioning of Shuakhevi HPP (178.7MW) in late August 2017 will result in higher growth in this category in the coming months.
