This presentation was presented by Norberto Pignatti during the annual SITE Development Day 2021 conference at Stockholm School of Economics via Zoom. Disclaimer: SITE has the permission from Norberto Pignatti to upload this presentation slide.

1. Energy Transition, Climate Policies, and
Politics in Georgia
Norberto Pignatti
International School of Economics at Tbilisi State University (ISET)
ISET Policy Institute
Development Day 2021 – December 8th 2021

2. ISET 2
Georgia
• Small country
between Eastern
Europe and Western
Asia
• Mountainous and
with abundance of
rivers
• Latitude: between
41° and 44° N
• Longitude: between
40° and 47° E
• Population: 3.7
Million (approx.
2020)

3. ISET 3
Energy needs, imports and domestic production
45%
26%
15%
5%
5%
2%
1% 1%
Shares of TPES in 2019, by source
Natural Gas Oil products
Hydro Coal
Biofuel & Waste Electricity
Crude Oil Geothermal, solar etc
70%
22%
3%
3%
1% 1%
Shares of domestic energy production in 2019, by source
Hydro
Biofuel & Waste
Crude Oil
Geothermal, solar
etc
Natural Gas
57,6%
33,5%
5,9%
3,0% 0,1%
Shares of imported energy in 2019, by source
Natural Gas
Oil products
Coal
Electricity
21%
79%

4. ISET 4
Potential gains from Energy Transition?
1.Increased Energy Security
2.Reduced dependency from foreign energy sources
3.Export potential
4.Health and environmental gains

5. ISET 5
Government Goals?
• Increase the share of final energy consumption from renewable energy
sources from 20.5% in 2019 to 35% by 2030
• 35% reduction in total GHG emissions by 2030 compared to 1990 levels

6. ISET 6
Potential for Energy Transition?
Abundance of renewable energy sources and growing government
attention (National Renewable Energy Action Plan - 2019)
• Hydropower: total production potential of 50 TWh per year of which
approximately 22% is currently utilized in terms of capacity.
• Wind: total production potential estimated to be 4 TWh per year. Less than 2%
of potential capacity is currently installed.
• Solar: average annual electricity generation potential estimated at about 1 TWh.
Almost no installed capacity currently exists.
• Biomass: The achievable potential is estimated at 3-4 TWh/year. Currently about
0.1% is utilized.
• Large potential also for geothermal energy.

7. ISET 7
Energy needs and domestic production over time
Source: Geostat
0
1 000
2 000
3 000
4 000
5 000
6 000
2013 2014 2015 2016 2017 2018 2019
ktoe
Domestic Production Consumption

8. ISET 8
Domestic sources over time
0
100
200
300
400
500
600
700
800
900
2013 2014 2015 2016 2017 2018 2019
ktoe
Coal Crude Oil Natural Gas Hydro Geothermal, solar etc Biofuel & Waste
Source: Geostat

9. ISET 9
Obstacles to Energy Transition?
Government
Subsidies to fossil fuels (e.g. gas
for TPP and residential
consumers) and HPPs
Low (regulated) prices
Distorted market signals
(Past) Limited transparency and
inclusiveness in discussions about energy
challenges and choices, including ex-ante
and ex-post project assessment.
Limited reliable
information for the
assessment of risks.
Harder to get funding for
projects
Media/information
environment:
poor information and
disinformation
Potential investors
on renewables
Facing highly uncertain
and potentially risky
environment
INSUFFICIENT NEW
INVESTMENTS – LOWER THAN
PLANNED INSTALLED CAPACITY
Limited budget
Old infrastructure not yet fully
updated
Consumers
Limited perception among
consumers about energy
security risks. Underestimation
of benefits and overestimation
of costs.
Limited willingness to pay and
OPPOSITION TO NEW PROJECTS
(NIMBY)

10. ISET 10
The way forward
• The Georgian Government is working on a comprehensive strategic document to
define its energy transition path: National Integrated Energy and Climate Plan of
Georgia (NECP)
• Electricity and gas market liberalization
• Investments in infrastructure
• Investments in energy efficiency
• Measures to support the development of renewable energy sources
• Strict emission targets on key sectors
• Efforts to increase transparency and inclusiveness (working group)
• Efforts to train the media and help diffusion of information (GNERC research and
education center + other initiatives)
NOTE: the political situation is making it harder to keep the focus on energy transition

11. T h a n k y o u
Q u e s t i o n s ?
ISET Policy Institute
www.iset-pi.ge