The electricity sector in Georgia - Introduction

Over the last decade, the electricity sector in Georgia has been transformed. The sector is deregulated and unbundled into generation, transmission and distribution companies. An independent regulator sets tariffs, and the Ministry of Energy is largely confined to policy related matters. Generation assets are owned in part by the Georgian state and municipalities, but by private interests as well, with more privatisation deals in the pipeline.

Generation of electricity is dominated by hydropower plants (HPPs), while gas-fired power stations and imports meet peak demand.

The newly created market maker, Energy System Commercial Operater (ESCO), is responsible for ensuring grid stability. ESCO is also responsible for contracting for electricity export and import. ESCO is a commercial entity owned by the Georgian state, though the Government plans to privatise it in the coming years.

The backbone of the transmission grid is the 500-kV line connecting the main generation assets in Georgia with the Russian transmission network. The line is partly owned by RAO UES (50%) and partly by the Georgian state (50%). The government also owns the transmission company, Georgian State Electrosystem (GSE), which is responsible for operating and maintaining the 35-300-kV grid and ensuring that new generation facilities are connected to the grid.

There are five distribution companies in Georgia. Two have approximately 1 million customers each: Telasi (responsible for Tbilisi and 75% owned by RAO UES) and UEDC (responsible for distribution outside Tbilisi and fully owned by Energo Pro). Adjara and Kakheti are smaller distribution companies, both in the process of being integrated into UEDC after being purchased by Energo Pro. There is also a state-owned distribution company in Abkhazia, outside the control of the central Government in Tbilisi.

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