Domestic consumption increased 6.8% y/y in July 2016, with DNOs and eligible consumers the major growth drivers. DNO consumption increased 5.6% y/y, with the greater Tbilisi area posting an impressive 17.5% y/y growth rate from an already high base in July 2015 (+ 5.7% y/y). Usage of Energo-Pro subscribers was flat (+0.7% y/y), while Kakheti Energy Distribution usage was down 3.2% y/y. Consumption of eligible consumers was up 12.1% y/y, with Georgian Manganese (+25.9% y/y) driving the growth, while GWP’s consumption decreased 3.9% y/y. GM’s high growth can largely be attributed to the low base in July 2015, when consumption was down 28.5% y/y due to unfavorable conditions on global ferro-alloy markets. Consumption of the Abkhazian region was up 9.2% y/y, after strong growth in June (+14.8% y/y) and three consecutive months of flat or negative growth figures before that.
Electricity exports decreased 22.3% y/y in July 2016, with Russia driving the decline. Exports to Russia decreased 93.7% y/y to 4.0gWh in July 2015, while exports to Turkey increased 21.9% y/y to 99.0 gWh, partly compensating for the drop in exports to Russia. This dynamic can be explained by the fact that average export prices to Turkey were up and average market price for electricity on the Russian market (USc 2-3/kWh) was below both Georgian and Turkish prices. Furthermore, domestic consumption in Georgia increased, while generation was largely flat, incentivizing the generators to either sell their electricity domestically or export to Turkey, before exporting to Russia. Subsequently, 76.8% of exports were directed to Turkey, 3.1% to Russia, 17.6% to Armenia (+5.8% y/y), and the rest, a negligible amount, to Azerbaijan.
Domestic consumption needs were fully met by domestic hydrogeneration in July 2016. Total generation was up 1.7% y/y, with regulated HPP generation increasing 33.5% y/y (36.2% of total hydrogeneration). Generation by Enguri and Vardnili was down 10.4% y/y due to lower water levels, while generation by deregulated HPPs increased 23.6% y/y. TPP generation in July 2016 was negligible, but TPPs remained on stand-by for the entire month to support system capacity, except for Unit 9, which remained on standby for 10 days only. The GC fee more than doubled in comparison to June 2016 (+114.3% m/m), due to Gardabani CCPP’s higher GC fee. Electricity imports in June 2016 were negligible.
Average export price of Georgian electricity to Turkey increased 10.8% y/y (USc 5.0/kWh) in July 2016, despite a 7.0% y/y decrease in the market clearing price on the Turkish market (USc 4.8/kWh). Notably, Turkish prices decreased further from a significantly low base. The weighted average wholesale price in Georgia was down 4.7% y/y to USc 3.8. 2.5% of total electricity supplied to the grid was traded through the market operator, with the rest traded through bilateral contracts. The average export price of Georgian electricity was USc 5.0/kWh (+33.4% y/y).
