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Energy in Georgia
23 August, 2012

 

A few words on energy in the rest of the world and on energy in Georgia; some differences, some some challenges, some ideas. Everybody around the world is discussing renewable energy and most of the very high growth companies around the world in the energy sector are renewable energy companies. Around the world, this summer is the hottest summer since climate records have been kept, and the number of unusually violent weather events, hurricanes, etc is increasing each year. The polar

ice caps are melting and sea levels are rising. Developed countries have all built in to their strategic planning some kind of recognition of this fact. But not Georgia. Why is not clear. Until recently many in the government would say openly that they don't believe in human caused climate change. But now that position is so widely ridiculed that rarely is it said out loud. But it is still said in private.

 

This is strange because of all the countries in the world that has the most to gain from conversations about renewable energy, Georgia tops the list. Georgia gets so much of its energy needs from hydropower stations, that it already is among the countries that has the highest percent of its energy from reusable sources. It also has more capacity to grow in this area than any other country in the world. With modest investments, Georgia could be completely self sufficient with power and export quite a bit. So far big deals have not been implemented mainly because the government didn't take advice about packaging the deals and tried to do it themselves and the deals fell through. There are some smaller stations going up and that is great, but what is needed is one or maybe two very large projects. That will  allow the sector to turn the corner and could bring in substantial revenue.

 

In the US particularly, but elsewhere as well, gas is becoming more and more popular. That is because it burns cleanly, much cleaner than coal or oil. The US has increased its gas production significantly in the last several years by a controversial process called "fracking". However people feel about the process and its environmental consequences, the process has led to an increase in supply, global demand hasn't gone up so prices have gone down. This has really hurt Gasprom's and therefore the Kremlin's revenues by the way. There is still interest in gas transit from Baku to Eastern Turkey, via Georgia but prices are low, and particularly the Central Asians are looking more and more to China as a reliable partner; more reliable than Russia.

 

Georgia still has an informally centrally organised gasoline distribution system. This doesn't work well. Gas is not highly taxed compared to some places but is still expensive in terms of revenues received. It is also incredibly dirty. There was a recent investigative piece that showed that all Georgian gasoline still has lead in it, which is a horrible health risk, particularly for children. When lead in gasoline was made illegal in the US, some say that it lead to a noticeable increase in average IQ. Some transparency in the gasoline market, both its pricing and its contents would be a good thing for Georgia's market.

 

Although there is public discussion about energy supply, there is very much less discussion about consumption of gasoline and other hydrocarbons as well as consumption of electricity. Only a few policies could very much lower Georgia's energy consumption. Recently Mayor Bloomburg in New York passed a law that periodically experts need to asses and publish how much electricity and other energy resources each building in the city uses. This was a smart thing to do. The first study was just published and is open to the public. t was good at showing who is using how much and creating some competition among buildings and builders. The New York City government very much encourages people to retrofit old buildings as well as build new buildings in a much more efficient way and these tests put numbers to these goals. Also people want to rent apartments in the buildings that are the most energy efficient. In Georgia there is still no uniform building code, so people more or less build what they want. These building codes could very much be written to prioritize efficient energy use both for new but also for old buildings.

 

The same goes for gasoline consumption. With its completely deregulated car market, the government is taking great pride in all the used cars being sold in Tbilisi now, but all these cars are clogging the roads. While the world's major cities are cutting the numbers of cars on the streets, Georgia is increasing that number. For how long? And what is the plan with public transport and how it relates to cars? What happened with the trams that were supposed to go down Rustaveli and on Chavchavade in Vake? And with the governments fleet of electric cars that was announced some time back and then forgotten?

 

There are so many countries that find themselves with almost unsolvable energy problems. And the worst is actually having oil, thankfully Georgia doesn't have any. And yet Georgia has such natural gifts, we should all think carefully about how we use these gifts, what we can do to increase energy supply but also do lower demand. And while we are at it, can somebody figure out how we can get twenty four hour electricity in Mtatsminda?

 

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