Galt&Taggart, a leading investment banking and investment management services company in Georgia, has published Georgia’s energy market review with a number of important highlights:
Contract for Differences (CFD) issued based on capacity auctions is a new support program for renewable energy projects that the government has launched. By the end of 2022, the regulatory framework for the suggested support mechanism is anticipated to be completed.
In 2022, export earnings reached an all-time high. Electricity exports totaled $84.3 million in 10M22, while import costs were just $40.7 million, creating a $43.6 million surplus in trade. On the one hand, the energy crisis and the increase in the price of energy items globally had an impact on Turkey, our main export market, where prices tripled. However, local market prices rose far more slowly than export prices. High share of hydro generation in supply mix, regulated market structure, and relatively moderate increase in import prices are the main reasons for maintaining low prices on the local market. This is because our main import suppliers, Russia and Azerbaijan, set their prices independently of global trends. Consequently, Georgian businesses saw a rise in revenue as a result of the present energy crisis.
Despite having a positive trade balance in US dollars, Georgia has continued to import energy for the past 10 months, and further imports are anticipated by the end of 2022. Due to the previously indicated price growth in Turkey, demand for electricity increased from domestic customers by 5.3% annually and from export markets by 153.7% y/y. Due to increasing hydro generation (caused by this year’s favorable hydrology) and thermal generation, the expansion in electricity demand (local consumption plus export) was largely met (supported by social gas).
On March 31, 2023, organized markets will finally begin. It was anticipated that the day-ahead market, balancing, and auxiliary services market will launch later than the originally planned date of September 1, 2022. Officially cited factors included authorities’ concern that a worldwide price crisis would affect the Georgian market as well as market participants’ lack of readiness, particularly with regard to supplementary services and balancing markets. As time goes on, the specifics of impending structured marketplaces are taking shape. Many questions have already been addressed, but some are still open. For instance, whether there will be acceptable limits for imbalances, whether importers and thermal power plants will trade directly on the day-ahead market and at what price.
By using this site, you confirm that you accept our Terms and Conditions as well as our Cookies Policy AcceptRead More
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.