Domestic electricity consumption was flat in April 2016 and up 1.3% y/y in 4M16. The high consumption growth by the Abkhazian Region in previous months leveled off in March 2016 and usage was down 12.5% y/y in April 2016. Excluding the Abkhazian Region, domestic consumption was up 2.8% y/y in April 2016, largely due to a 6.6% y/y increase in greater Tbilisi area consumption. Consumption by Energo-Pro subscribers was up 3.5% y/y, while Kakheti Energy Distribution (KED) subscriber usage was down 2.5% y/y. Consumption by Georgian Manganese was flat (+0.9% y/y) in April 2016. With the resumption of mining operations on May 20th, we expect GM’s consumption to rise significantly in June as compared to the consumption figures in 2015. The increase will have a notable effect on the domestic consumption figure, as GM represents roughly 10% of total consumption. There were no electricity exports in April 2016.
Domestic generation In April 2016 was down 3.4% y/y on the back of lower HPP output. Electricity generation by Enguri and Vardnili, the country’s largest HPPs (41% of total installed capacity), was down 31.0% y/y due to low precipitation. TPP generation was up significantly (+36.5% y/y). 79.0% of thermal generation fell on Gardabani CCPP, followed by Tbilsresi (Units 3 and 4) and Tkibuli coal. Imports decreased 41.3% y/y, with 93.4% coming from Russia at an average price of USc 5.2/kWh. Generation by deregulated HPPs increased 18.4% y/y and the share of deregulated HPPs in the hydro mix increased to 16.9% (vs 13.0% in April 2015). Generation by deregulated HPPs has been on the rise over the last few years as a result of robust development in the hydro generation sector and we expect the upward trend to persist.
The weighted average market clearing price in Turkey increased 13.2% y/y in US$ terms, after decreasing for 13 straight months, but the increase is largely due to the low base of April 2015, when the market clearing price was down over 50% y/y. Nonetheless, the increase is a positive sign for investors in the energy sector with an eye on the Turkish market. In Georgia, the balancing electricity price decreased 22.8% y/y to USc 4.7. 17.6% of total electricity supplied to the grid was traded on the wholesale market (via ESCO), with the rest traded via bilateral contracts. 70% of the balancing electricity price was made up of HPP generation, while TPPs and imports made up 14.2% and 16.1%, respectively.
