Issue 5, 2014. October-November

   

Enabling the Lights to Burn Bright: Georgian Electricity Sector Tackles Issues of Quantity and Quality

It has been years since Georgia faced regular blackouts. But when the lights went off around the country in July, it was a stark reminder that the country's energy sector is still under development in terms of supply, reliability, and quality.

Lika Zhorzholiani

Georgia's power lines, Galt & Taggart Research (click for bigger image)


Blackouts: A Thing of the Past

When a sizeable part of Georgia went black in July - including Tbilisi - the three hours of darkness served as an unpleasant reminder of what living in the country used to be like: lights on, lights off - sometimes for days, often with no warning.

The problem with the electricity supply, however, is largely an issue of the past, according to SulkhanZumburidze, the chairman of the board of directors for the Georgian State Electrosystem.

Zumburidze told Investor.ge that the outage that caused the major blackout in July was the first massive system failure since 2010, when the country's Imereti transmission line was down for four hours and fifteen minutes.

"In the past, there have been such types of failures nine times but the consumers didn't feel them," he said, adding that employees have been trained to provide "fast restoration" when a blackout occurs.

To eliminate blackouts completely, Zumburidze said that it is imperative that the country create "alternative" transmission lines to the single line that currently connects the Enguri Hydro Power Plant - Georgia's largest source of power - to the country's Zestaphoni substation.

New and improved infrastructure will play a crucial role as Georgia grapples with issues of increased demand for more - and more reliable - electricity.

Georgia was ranked 52 out of 148 countries for the quality of its electricity supply in the 2013-2014 Global Competitiveness Report. In the previous year's report, the authors noted that economies "depend on electricity supplies that are free of interruptions and shortages so that businesses and factories can work unimpeded."

Steps need to be taken to improve Georgia's transmission network, noted a sector SWOT analysis that Bank of Georgia Research conducted in 2012, which found that "issues need to be addressed in terms of access, congestion, and tariffs."

Georgia and the European Bank of Reconstruction and Development (EBRD) are currently working to address some of Georgia's infrastructure problems. With co-financing from Germany's KfW and the European Union, they are building a new substation, Jvari-Khoga, and new transmission lines to help ease the pressure on the existing system. The project, which will be ready at the end of 2016, will help "support us in the sustainability of the power grid," Zumburidze told Investor.ge.

The EBRD has said the €60 million project will "strengthen the reliability and stability of the Georgian transmission network; pave the way for investments in more hydropower production in northwest Georgia; and improve capacity and reliability of the electricity system supplying areas of significant demand growth."

The infrastructure problems are not just a headache for households; Zumburidze noted that supplying major foreign investments, like the Poti Free Economic Zone, is "impossible" without the Jvari-Khorga project.

Tomorrow's Infrastructure Today

The Georgian State Electrosystem is also working on other projects to ease pressure on the system.

A six-year program, which focused on finding better ways to use the existing infrastructure, will soon be completed. And the €300 million Black Sea Power Transmission Lines project has also financed construction in vital areas. Transmission lines have also received a boost with a $18.5 million rehabilitation project and USAID has given the state $35 million to develop power system infrastructure.

"Modernized infrastructure will allow us to decrease[electricity] deficits in the winter and minimize [power outages]," Zumburidze said.

New Regulations to Tackle Quality Concerns

Building and rehabilitating infrastructure is just part of the solution where quality of supply is concerned, however.

The jumps in the quality of electricity that is provided - even if the lights never go off completely - creates problems for all users, from households trying to protect their refrigerators and computers, to factories and other producers that require a steady and consistent power supply for sensitive equipment.

In its latest energy policy, the Georgian Ministry of Energy said that "optimizing the country's energy consumption dynamics" is a priority. This includes energy transportation, allocation, consumption - and energy efficiency programs.

To that end, the Georgian National Energy and Water Supply Regulatory Commission is planning new regulations and laws that will help ensure a high-quality power supply for consumers.Power companies are required to inform their customers when the power supply will be disrupted or flowing at a reduced capacity. In addition, the commission can fine a power company if it does not resolve quality issues in a timely manner.

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