The main challenges of energy independence of Georgia

Giuli Giguashvili

Doctor of Economics, Professor Gori State University, Gori, Georgia

Summary

Ensuring energy independence is the most significant challenge for the economy of Georgia. In order to overcome the problems related to energy independence and energy security, special importance is attached to the use of renewable energy resources. The research aims to assess the potential of renewable energy resources and determine the possibilities of their use for the sustainable economic development of Georgia. In the research process, statistical data analysis and comparative analysis were carried out; qualitative and quantitative research methods were used. 7s a result of the research, the main problems and challenges related to the energy independence of Georgia were highlighted, and all the positive and negative aspects related to the use of renewable energies were emphasized. The research presents possible ways of overcoming the challenges related to energy independence: improving the infrastructure of the energy sector; Improving the energy policy: improving the investment environment; creating a transparent and non-discriminatory legal framework; Deepening trade relations with the energy markets of the European Union, implementation of scientific research projects, etc., which in turn will contribute to the increase of energy independence and energy efficiency of the country, improvement of energy security and sustainable economic development.

Keywords: energy independence, renewable energy resources, sustainable development.

Introduction

Energetics is a guarantee of the social and economic well-being of any country, whose function is to provide the country's population and business sector with safe and affordable energy. Along with the growth of the population and production processes, the demand for energy increases, which consequently leads to a shortage of already limited resources and exacerbates the problems related to climate change. In order to solve the problem of exhaustible resources, the world began to find and use renewable energies: wave, wind, biomass, solar, geothermal, and hydropower. In order to effectively use the electric energy resources in Georgia, to increase the security and sustainability of electric energy, as well as to fully meet the increased demand for electricity in the country, the main priority is to perfect the policy of rational utilization of water, solar, wind and other types of renewable energy resources, update the existing legal base, bring it closer to the European Union directives, which, in turn, will contribute to the establishment of a competitive energy market, improvement of energy security and sustainable economic development. Unfortunately, in Georgia, renewable energy resources are still being utilized in small quantities, which is mainly due to the scarcity of technologies and financing, both from the state and the private sector [1].

Literature review

energy independence georgia

Results/Discussion

Strengthening the country's energy independence is particularly important for ensuring the national security of Georgia. In order to ensure energy security, Georgia's priority is to continue the diversification of energy sources and transportation ways. It is essential to promote the maximum utilization of internal resources, further modernization and development of the energy system, and integration into the regional energy infrastructure. Increasing the energy potential of Georgia has a positive impact on the country's security and economic development, as well as the well-being of its citizens [5].

Nowadays, the most significant challenge of the electric energy system of Georgia is the increase in demand, which we cannot meet with local generation sources [6].

Source: http://www.economy.ge/

During the last three years, the demand for energy grew by an average of 6.7% per year, and the generation in the same period increased by an average of 3.9%. Therefore, to fill the deficit, it is necessary to import from neighboring countries [7].

Table 2

Exported and Imported Electricity in 2019-2022 years (GWh)

Source: Georgian State Electrosystem (GSE)

Electricity is mainly imported from Russia and Azerbaijan. The export market for Georgian HPPs is mainly Turkey. An increase in electricity imports automatically implies an increase in demand for foreign currency (US dollars), as financial settlements with neighboring countries are made in foreign currency. In this regard, the pressure of the demand for foreign currency increases in proportion to the demand for natural gas needed for electricity generation in thermal power plants, which is met by 100% of imports. 90% of natural gas and oil products are imported from Azerbaijan, and 10% from Russia.

Due to its geographical location, Georgia also has splendid potential for the transit of electricity from neighboring countries. Transit is possible through the existing infrastructure: a) between Russia and Armenia; b) between Azerbaijan and Turkey; c) between Russia and Turkey; d) between Armenia-Iran and Turkey.

80% of electricity generation in Georgia comes from hydroelectric plants. In terms of water resources, Georgia is one of the wealthiest countries in Europe, with 14,0 m3 of fresh surface water per capita [7]. Only 20% of the economically feasible potential of electricity generation from rivers in Georgia has been utilized. Approximately 72% of the country's hydro resources are located in West Georgia, and the remaining 28% are in the East.

A third of the electricity produced in the country comes from the largest Enguri HPP, having installed and operating capacities of 1,300 MW and 1,200 MW, respectively. This plant, in tandem with Vardnili Cascade HPPs (the second largest hydropower facility in Georgia) and other relatively lower capacity HPPs, compose the pool of regulated hydropower plants with a total installed capacity of about 1,990 MW. By the end of 2019, the total installed capacity will equal 4247 MW, which includes the installed capacity of HPPs 3300 MW and the installed capacity of thermal power plants of 925 MW. It is anticipated that in 2020-2030, additional capacity of new HPPs will be added, which will provide the increase of total installed capacity from the existing 4247 MW to 5014 MW by 2022, 5984 MW by 2024, and 7945 MW by 2030 [6].

The maximum utilization of existing abundant hydro resources appears to be one of the priority directions of the state, however, in recent times, the negative attitude towards hydroelectric plants has intensified in Georgia so much that we constantly need to justify how beneficial the construction of new hydroelectric plants is to counterbalance the damage they cause to the environment and people; Is it true or not that the construction of hydroelectric power plants contradicts the principles of sustainable development? Unfortunately, the construction of hydroelectric dams does lead to the flooding of large amounts of agricultural land and forests; It negatively affects the microclimate, increases humidity, changes the landscape, and increases the risk of activation of landslide processes. Based on the above, during the construction of HPPs, all expected risks should be taken into account so that they can be minimized and the country's hydro resources can be used wisely and justified.

Studies confirm that, on average, the effect of the construction of a 1 MW power plant on GDP in a 10-year period is 2.16 million US dollars, while in the case of its non-construction, this effect is almost 3.5 times less - 0.62 million US dollars. In addition, HPPs provide a much higher level of security and electricity supply to the country in the long term [8:12].

Along with hydro resources, Georgia is rich in renewable energy sources such as wind energy, solar energy, geothermal energy, and biomass [3]:

Wind energy. Georgia has significant wind energy potential. The most favorable areas for wind power plants are located in the highlands of the Caucasus, on the plateau of southern Georgia (Javakheti region), and in the Southern part of the Black Sea coast. The total duration of working wind speed in these areas varies from 1400 to 7100 hours per year. The potential of wind energy in the country is absolutely untapped. To clarify its data, it is necessary to conduct additional studies.

Solar power. Due to the geographical location of Georgia, the rate of solar radiation is relatively high. Some regions of the country are characterized by 250-280 sunny days per year, which is about 6,000-6,780 sunny hours per year. The complete annual potential of solar energy in Georgia is equivalent to 34 thousand tons of conditional heating. Like wind energy, solar potential in the country is a bit exploited.

Geothermal energy. According to the conducted hydro-geological research, the annual potential of the geothermal waters of Georgia is 250 million m3; Today, there are more than 250 natural and artificial water deposits in Georgia, where the average temperature of geothermal water ranges from 30°C to 110°C, the total daily discharge is estimated at 160,000 m3. Geothermal waters have a small share in the country's energy balance. They are mainly used for household or agricultural purposes (greenhouses).

Biomass. Biomass is an important source of energy in Georgia. The total area of the state forest is 2456 thousand hectares, including 2314 thousand hectares covered with forest. The total wood stock in Georgia is 452 million m3, which is 0.13% of the world's wood stock. The energy potential of Georgian forests is about 0,8 billion kilowatt-hours.

Georgia has quite scarce reserves of traditional energy sources: coal, oil, and natural gas [3]:

Natural gas. Twenty-five deposits have been identified and studied in Georgia. The total amount of gas resources (conditional, prospective, and prognostic) in the fields is 4 billion m3. It can be assumed that in the future, the natural gas of Georgia's deposits will occupy an influential place in the heating and energy balance of the state, for which it is a necessary and urgent measure to continue the exploration of gas deposits.

Oil. Oil exploration is actively underway in Georgia. The total number of estimated resources is about 600 million tons (4.5 billion barrels).

Coal. Coal deposits in Georgia are mainly located in three regions: Tkibuli, Tkvarcheli, and Akhaltsikhe. The total amount of industrial coal reserves is approximately 372 million tons. Currently, coal is used in Georgia for industrial, commercial, and household purposes.

In the near future, efficient use of renewable energy sources may provide an additional 20 TWh of output, which provides the opportunity to save approximately 7 million tons of fossil fuels. The full use of Georgia's renewable energy resources will significantly contribute to the climate change mitigation process in the country.

Actual data on prospective generation objects and consumption growth forecast is sent by the Ministry of Economy and Sustainable Development to GSE by official letter on annual basis. Such information is included in the latest approved ten-year plan (TYNDP 2020-2030) that is presented in the table below [6]:

Table 3.

Forecasted installed capacities by generation type (MW)

Source: http://www.economy.ge/

It should be noted that the Government of Georgia implements a policy aimed at reducing the country's dependence on foreign energy resources and sustainable development of the sector. According to the information of the Ministry of Economy and Sustainable Development of Georgia, it is necessary to build new hydropower plants, use renewable energy sources, including wind and sun, introduce new technologies, and implement strategically important infrastructure projects [9].

The World Energy Trilemma Index is an indicator of countries' energy policy evaluation, which is expressed in the following three dimensions: energy security, energy equality, and environmental sustainability of energy systems.

According to the energy trilemma index, Georgia ranks 77th among 128 countries of the world with a total score of 63.1 and CBC2 evaluation. Georgia's rating of B (75/100) in the dimension of energy equality is due to the availability and low prices of electricity and other fuels. A low score on the energy security dimension is a result of limited supplies and growing dependence on imports.

Across Europe (43 countries), according to the energy trilemma index, Georgia is the third country from the bottom and is ahead of Moldova and Bosnia- Herzegovina. According to this index, Georgia lags behind all its neighbors. It should be noted that Switzerland is at the top of the list, whose energy locomotive is hydropower [8:15].

Conclusion and recommendations

Thus, it is necessary to reduce energy dependence by using its own energy resources for energy and the national security of Georgia. It is important to make maximum use of energy possibilities; Full utilization of local, renewable energy sources; An increase in public and private sector investment to build new power plants, solar panels, and biomass processing plants; Development of a long-term action strategy in the direction of resource utilization of renewable energy sources; rehabilitation, modernization, the transformation of existing facilities and bringing them closer to modern standards; Diversification of energy suppliers. It is significant to strengthen the institutional potential in the direction of the use and encouragement of energy from renewable sources and implement the institutional reforms planned by the legislation.

References:

[1] Giguashvili, G., Azmaiparashvili, M., Makasarashvili, T., & Khorguashvili, T. (2022). Aspects of Sustainable Economic Development in Post-Pandemic Georgia. ISJ Theoretical & Applied Science, 02(106), 573-580. http://s-o-i.org/1.1/TAS-02-106-60.

[2] Law of Georgia "ON PROMOTING THE GENERATION AND CONSUMPTION OF ENERGY FROM RENEWABLE SOURCES" (2019), https://matsne.gov.ge/ka/document/view/4737 753?publication=1.

[3] National Renewable Energy Action Plan (NREAP) (2019), http://www.economy.ge/up loads/files/2017/energy/samoqmedo_gegma/ganakhlebadi_energiis_erovnuli_samoqm edo_gegma_2020.pdf.

[4] Law on Energy and Water Supply (2019), https://www.matsne.gov.ge/ka/document/ view/4747785?publication=6.

[5] Concept of National Security of Georgia (2005), https://mfa.gov.ge/MainNav/Foreign Policy/NationalSecurityConcept.aspx?lang=ka-GE.

[6] MINISTRY OF ECONOMY AND SUSTAINABLE DEVELOPMENT OF GEORGIA, Georgia - Security of Supply Statement in Electricity Sector (2021), http://www.economy.ge/up loads/files/2017/energy/security_of_supply_statement_electricity/security_of_supply_sta tement_electricity_2021_eng.pdf.

[7] Georgian State Electrosystem (GSE) (2022), https://www.gse.com.ge/for-customers/ data-from-the-power-system/key-figures-2010-2022.

[8] An Analysis of the Economic Impact of Local Renewable Energy Resource Development and Its Role in Energy Security (2020), https://gegroup.org/assets/project_presentation/ Final_Report.pdf.

[9] MINISTRY OF ECONOMY AND SUSTAINABLE DEVELOPMENT OF GEORGIA, The main directions of energy policy (In Georgian), http://www.economy.ge/index.php?page= ecopolitic&s=63.

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