Georgia-EU energy relations and the green transition


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The EU strengthened its relationship with Georgia in the past few years, and energy has been an important component in such a dynamic. Georgia has a strategic location and the potential to become a hub for sustainable energy development in the Caucasus Region as well as in Eastern Europe. In this perspective, it is important to note that Georgia’s energy production currently covers only about one-fifth of its demand, but the majority of domestic energy produced in Georgia comes from hydro and bioenergy sources. This shows off a relevant potential that could be further strengthened in the cooperation between the EU and the Georgian government. A cornerstone of such a partnership is Georgia’s membership in the Energy Community since 2017; this agreement aligns Georgia’s energy sector with EU legislation in order to create a more competitive and transparent market. This harmonization is also crucial for Georgia’s potential EU accession. The EU has also provided significant financial support through the Economic and Investment Plan (EIP), mobilizing almost €2 billion for energy infrastructure and renewable energy development in the country. 

Another key aspect is the active help from European authorities towards Georgia in order to develop critical infrastructure and connectivity, promoting in this way the production of renewable energy. Infrastructure projects, such as the overhaul of the Enguri and Vardnili hydroelectric power stations have been highly important in strengthening electricity transmission lines and promoting green energy in the country. This highlights how joint action and mutual cooperation can assist Georgia’s authorities in becoming an important and efficient actor in regional energy infrastructure as well as an electricity exporter of clean and green energy to the European Union.

 The German investment and development bank, the Kreditanstalt für Wiederaufbau (KfW), is already supporting the enhancement of the power grid and renewable energy sector in Georgia with more than €200 million in funds as of 2023. At the same time, the Georgian State Electricity Producer (GSE) expects to expand its capacities in the near future in order to utilize the vast resources available in the country and increase Georgia’s energy security. The GSE also focuses on enhancing Georgia’s export potential with regards to renewable sources, especially hydrogen, biogas, biomass, and geothermal energies. In addition, Tbilisi is studying projects related to the construction of additional wind farms with a capacity of 900 MW. If implemented, such infrastructures could further enhance the country’s role in producing renewable and sustainable energy and exporting it to EU countries. 
Looking at the regional stage, another important project is the Black Sea Green Cable initiative, which could have the potential to diversify energy sources and ensure uninterrupted supply to the EU. This Black Sea electric cable between Georgia, Romania, and Azerbaijan aims at enhancing energy capacities among the three nations, enhancing resilience, and promoting independence of energy supply as well as renewables in light of the energy transition sponsored by the EU. As the GSE states on its website, the Black Sea submarine cable project “envisages the arrangement of an underwater high-voltage transmission network, which should connect the electric power systems of Georgia and Europe.” Once the project is implemented, “a 1,155-kilometer-long cable will connect Romania, empowering Southeast Europe and Romania to take advantage of expanded export opportunities and trade electricity at hourly electricity market prices.” In addition, according to the GSE, “the implementation of the project will contribute to the strengthening of energy security in Europe and the South Caucasus region, the development of the renewable energy sector, and the increase of transit opportunities”.

Written by: Francesco Marino


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