Issue 6, 2017. December-January



Sally White

Biomass is moving up on Georgia's official list of energy priorities and Georgia's embryonic biomass sector is hoping that now the time is right to get funding and start working.
While there are a few privately owned biomass fuel plants, and municipal district heating based on biomass is being revived, the industry is still tiny.

Looking to the Balkans, Ukraine ... and Scotland

One potential source of financing for the nascent industry is the European Bank for Reconstruction and Development (EBRD), which has been spending millions on biomass-plant and district heating in Ukraine and the Balkans.

Another enviable model is the Baltic project. Funded by the region's pension funds and insurance companies and the European Investment Bank, it was announced a few weeks ago that the investors would build a 16-million-euro Lithuanian biomass plant. The plan is for it to provide 10 per cent of the energy needed to heat Vilnius.

As yet, not a lot has progressed in Georgia on sustainable biomass consumption beyond surveys, plans, forums, conferences and the workshops stage. So it comes as something of a surprise when international biomass energy expert, Neil Harrison of UK consultants re:heat, says "a good country model for Georgia would be Scotland!"

His notes that, currently, Georgia, much like Scotland, has been short of a formal structure on which to build a biomass industry to diversify energy sources.

For example, district heating projects can be clustered to create scale for a business that can attract international aid and investment-to be really effective, the sums of money required run into the many millions of dollars.

Small plants can be networked or formed into co-operatives with the same aim.

He is a great believer in "empowerment from the grass roots to get things going." Here is where government incentives and direction are required. He knows what he is talking about, his company having worked across Europe, Africa and Asia.

As he adds: "You need enough places from which to make a start-there are many opportunities, but you need scale. Then you have to create structures to build a market for private investment and for support from the likes of the EU, EBRD, USAID or UNDP." Scotland has been going that route, and it could be Georgia's next step.

Scotland also has had the challenge of clarifying who is running the country's bioenergy strategy and thus drawing up an enforceable program of penalties and incentives.

As in Georgia, the territory is covered by several government bodies. (The merging of the Ministries of Economy and Energy to form the Ministry of Economy and Sustainable Development removes some of the overlap.)

Additionally, there are local stake-holders in the form of municipalities and a lot of private and commercial vested interests in the land. Not to speak of the political implications in Georgia surrounding wood, an energy source thousands currently use for free-solar, wind and water are so much simpler.

"So, in these conditions it is harder to know what is going on and harder to make things happen," he says after having spent some months in Georgia advising the United Nations Development Programme (UNDP).

Moving away from Unsustainable Biomass

Officially, Georgia is currently meeting 11 percent of its energy needs from biomass. Harrison notes, however, that this is not the sustainable type of biomass the Georgian government and the EU are promoting.

"It is all the energy created across the country from consumption of any kind of wood and other materials," Harrison points out, adding that this includes illegally logged wood and forest debris as well.

While Georgia is seeking to create a cleaner energy industry by building wind power and hydro plants and promoting small-scale solar generation, is it is currently a huge burner of wood. A study funded by the UNDP shows that "more than 70 per cent of the rural population still relies on firewood and illegal logging for their heating needs."

The study adds that "unsustainable annual consumption [of wood]... costs Georgia around GEL446 million every year." Worse still, this wood is often consumed while still wet, is not only inefficient when it comes to heat generation, but its smoke is bad for people's health.

The solution the internationally directed Georgian biomass programs are seeking is the production of briquettes made from wood, agricultural and municipal waste-a million and a half tons of agricultural residues and more than one million cubic meters of forest residues are produced every year. A UNDP report estimates that 70 percent of residential energy could be supplied from this residue, and so could systems for hospitals and government departments.

Plus, biomass energy production could create hundreds of badly needed jobs.

A Million-Dollar Investment

Action so far has included the following: the UNDP put up $1 million for a four-year biomass program, including support for three pilot biomass plants to start briquette production in Manavi, Tbilisi and Akhmeta. The UNDP supports the Georgian Biomass Association, which is tasked with further advancing Georgian biomass use.

Municipalities have been discussing the use of biomass in new and revived district heating systems along the lines developed in the Baltics.

The ideas put forth for encouraging a commercial biomass market listed in a recent UNDP report included:

- loan guarantees
- tax rebates
- investment grants
- state funding
- renewable energy targets
- developing a holistic forest sector
- help for foreign investors via investment guidelines

There may be opportunities for grants, such as from Lithuania's climate change bilateral cooperation programme. Experts from the Lithuanian Biomass Energy Association visited Georgia this summer-biomass is that country's most common source of renewable energy, and Lithuania hopes to lead the EU in biofuel production by 2020.

Other gaps, which have arisen in analysis by Zaal Kheladze, director of New Technology Center (which manages the Biomass Association of Georgia) is the lack general knowledge on the subject.

There is, he says "A deficit of knowledge on the academic and consumer level - educational establishments do not provide enough knowledge on the subject." So, people do not understand what is at stake here.

Georgia's Deputy Minister of Environment and Natural Resources Ekaterina Grigalava has stressed "the importance of cooperation between the state and private sector."

"With good policies and proactive business approaches, Georgia will achieve tremendous success producing and utilizing on renewable energy," Grigalava said.