Georgia Eyes Regional Electricity Market
23 May, 2013
Georgia Eyes  Regional  Electricity  Market
Georgian government works hard to blueprint the EU electricity trade pattern in Georgia in order to get access to the regional market that will boost investments in Georgian hydro-power sector and also make Georgia’s electricity system safer.
Georgia with its ample hydro resources but limited market size can attract investments to develop hydropower sector only if gets an access to the regional market. Electricity trade regional prospects and opportunities to Georgia were discussed at the two-day conference About Trans-Border Electricity
Trade held on May 15-16, 2013 in Tbilisi under initiative of the USAID supported Hydropower Investment Promotion Project (HIPP). “The conference summoned over 160 representatives both Georgians and foreigners mainly investors and electricity traders operating at Turkish market,” Giorgi Chikovani, Investments promotion Advisor at Deloitte Consulting and Deputy Chief of Party USAID in charge with the HIPP, said in the interview to Georgian Journal.
Turkey with its fast growing economy [taking a leading share in the OECD economic growth lately] and enhancing electricity consumption is the first target export market to Georgia at the moment. “The final target is the EU market”, Marika Valishvili, Deputy Minister of Energy of Georgia, said. But to become the EU regional electricity trader Georgia needs to adopt the unified market rules from all possible points of view including the infrastructure and legislation.
To get in line with the targeted market rules HIPP assists Georgian authority to adopt a new electricity market model [GEMM 2015] by 2015 that will unfold both Turkish and European market gates to Georgia. According to Chikovani, the new model is supposed to boost investments in Georgian energy generation for it offers transparent rules of game at the market and insures access to the regional market such as hourly balance, transmission lines access, auctions etc. Works are conducted in four main directions such as drafting code on electricity networks of Georgia streamlined with Turkish one [that will be through in two months and sent to Turkish side for streamlining], development of balance market, legislation changes and electricity trans-border trade rules. Turkish market will be kind of transitional period embracing approximately 5-7 years, Valishvili said. Besides, Turkey in its aspiration to the EU membership has already made significant steps to harmonize its rules with the EU ones and partnership with Turkey will get Georgian electricity trade closer to the EU. Gradually both Georgia and Turkey will streamline their electricity trade rules with the EU rules and become integrated parts of the latter.
Of this integration Georgia expects to hit two main goals: to give an impetus to its hydropower development and increase the country’s energy security.
“Georgia is a small market and its electricity-generation potential will be limited and not interesting to investors if we do not join a bigger market,” Valishvili elaborated to GJ. “For example if we invest in hydropower to add 5 thousand megawatt to our generation Georgian economy cannot consume that much electricity and it will be non-profitable while 5 thousand megawatt is the minimum additional consumption to Turkey per year. The point is the bigger is the market you are connected to, the safer is your electricity network and the higher your energy security. Georgia most probably will not become an EU member for many years ahead but to be an integral part of the EU electricity system is quite possible meanwhile that reduces security risks popping up on the national level.”
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