Current market structure in the power sector of Georgia, regulatory environment, introduction of the key players in generation, transmission and distribution, potential of the future development of the Georgian power sector and KPMG’s experience and capabilities in the field
For over the past decade, the Government of Georgia has been actively promoting the development of the power sector, with various incentives and favorable terms offered to investors. As the power sector has been one of the key strategic development areas for Georgia, the Ministry of Energy, in cooperation with the Georgian National Energy and Water Regulatory Commission (GNERC) has developed Georgia’s Energy Strategy for 2016-2025, oriented mainly at liberalization of the market, switching to EU standards and modernization and development of the transmission and distribution infrastructure.
International investors’ interest towards Georgia has been increasing over the past decade resulting in the energy sector being the second largest sector according to the flows of FDI. Starting from 2011 till Q3, 2016 the power sector has attracted more than 1 billion US Dollars of foreign direct investments, representing 17% of total FDI, surpassed only by transportation and communication sector.
A liberalised and deregulated market allows renewable energy generators to operate freely on the Build-Own-Operate (BOO) principle, with investors being free to choose the market they wish to operate in.
Local energy demand is forecast to grow steadily in line with the GDP of the country, with further opportunities to export to neighbouring countries suffering from structural power deficits or expensive power generation. Over the past nine years electricity generation in Georgia has increased by more than 30%, while demand increased by 33% during the same period.
As of today, most of Georgia’s hydro power potential is yet untapped (around 75%) with more than 60 potential hydro power projects being at the pre-feasibility study level. Currently, there are more than 70 power stations with total installed capacity of 3,724 MW, out of which 75% comes from hydro power plants.
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