The FINANCIAL -- “As one of the world’s top five countries in per-capita water resources, Georgia is blessed with countless waterways of myriad sizes and types” - reiterated Ms. Mariam Aleksidze, Conference Producer at Green World Conferences. Yet only 18% of waterways harboring high electrical-generating capacity have been developed, leaving most of this abundance untapped. Hundreds of Georgia’s 26,000 rivers - with a Greenfield-site hydropower plant potential of 20 TWh - remain undeveloped.
According to the Ministry of Energy of Georgia, almost 300 of the rivers in Georgia provide excellent opportunity for hydropower generation. Georgia is one of the top countries in terms of water resources per capita and not surprisingly, almost 78% of total electricity is generated from Hydro Power Plants - 8.5 TWh. Despite this, there still is vast untapped potential, as only 25% of economically feasible Hydro potential is being exploited today. Georgia could produce aditional 25 TWh electricity annually with hydro resources alone. There are 95 potential HPP projects identified and promoted by the Ministry of Energy at the moment.
Georgian National Investment Agency states that, with abundance of high mountains and fast-flowing rivers, Georgia has competitive advantage over neighbors in terms of generation cost. Most attractive export market is Turkey who ranks first in Europe and second in the world after China in terms of electricity demand increase. Turkey experiences electricity shortage during summer months, while Georgia has generation surplus. The Turkish Electricity Transmission Company forecasts that Turkish electricity consumption will grow by 5.5% on average annually and it is expected that electricity prices in Turkey will remain high for quite some time.
Ms. Aleksidze of Green World Conferences told Experto that Georgia has a solid and clear policy on building upon its potential and taking full advantage of it to transfer the country into a solid powerhouse of the region: “The most important factor which makes this industry attractive to investors and OEMs is straightforward legal framework and clear taxation issues. Not many countries were able to provide such a well-defined platform”.
Deputy General Director of Gross Energy Group, Ms. Sophie Chichaghua considers that low level of corruption, investment protection guarantees, decriminalization of businesses, and cheap work forces and resources make Georgia an attractive place for an investment, particularely in hydro as it is clean and cheap renewable energy within the realm of Georgia. The company sees the market having non stable prices for construction materials and lack of qualified experts as the biggest challenges when doing business in Georgia.
Gross Energy was established in 2007 and since November 2009 it has been functioning as Gross Energy Group. Irakli Tkebuchava, Chief Financial Officer of the Group explained to Experto that the company does multipart evaluation of energy sector, assessment of further development and its influence on economic expansion, environmental and social spheres. “we also provide engineering and consulting services, preparation of investment proposals and business-plans for construction of hydro-technical, hydro-energetic and water management sites”, elaborated Mr. Tkebuchava.
GEGroup is constantly trying to improve the operational process and optimize the operational expenses; the company has to develop stably and ensure all their departments are always equipped with the latest technologies and innovations. “We have recently implemented the following initiatives: for the Topographic Department – UAV, Leica GEO system and for the Project Management Department – PMIS software” stated the Deputy General Director of the Group.
Ms. Chichaghua further revealed to Experto that “we are planning several improvement initiatives, for example within the Geodetic Department – upgrading to European standards with DMT summit seismic data acquisition systems; and within the Geological Department – introducing vertical and horizontal drilling machine, and on site laboratory services“. To generate interesting ideas and stay abreast of the innovations within the industry, GEGroup tries to participate in as many HPP related events, exhibitions and forums as possible.
Speaking of hydro events, the HydroTech Caucasus is to be held next month on the 9th and 10th of November in Tbilisi. The 3rd annual conference and exhibition will be focusing on small and medium hydro development in Georiga, Armenia and Azerbaijan. The event has changed significantly over the past 3 years from a small local conference into the main hydropower expo and leaders meeting place in the region. Participants include high level representatives of Georgian Ministry of Energy, powerful investors, turbine manufacturers, consultants, lawyers, and of course, hydropower plant operators.
“HydroTech Caucasus is the annual hydropower sector event in the region which gathers over 200 industry leaders. The main objective of the event is to bring together investors, manufacturers and buyers to build on vast opportunities for greenfield small and medium hydropower plants in the region”, explained the Conference Producer, Ms. Mariam Aleksidze.
According to Green World Conferences this is the only solid event regarding the hydropower sector in the region. By attending the conference one will have the opportunity to meet the genuine movers and shakers of the industry, people who are directly involved in decision-making and executing the projects. The event is attended by all levels of operations, from the Ministerial level, thorough investors and consultants to hands-on technical staff. This alone already offers a very powerful combination of insights and opinions. A very important fact is that major equipment manufacturers exhibit at the HydroTech event, offering direct insight into the lasted developments in the turbine and generator sector. HydroTech Caucasus offers a full insight into the market to both well-established players as well as potential entrants in the hydropower mart.
Mariam believes that with every year the event will significantly develop and amend its core to the existing challenges: “As the market matures its opportunities face different challenges – and this is something we want to focus each event on. We have observed similar pattern in other regions of the world where we organize hydropower events. Initially, the players focus on establishing maker’s potential, look into taxation issues and legislation frameworks. Later on, they move to exploring the growth options for their companies, look for partners and of course, try to close deals. As the market matures, it will move onto more operational and maintenance issues”.
Providing the ground will be welcoming for investors, Georgian hydropower market has many years of successful growth ahead. “Over the past 3 years we have seen many successful hydro projects implemented in Georgia. Notable ones are Dariali energy, Kintrishi HPP, Khelvachauri 1 HPP and many others. What makes them particularly interesting is their low investment and big capacity”, concluded Ms. Aleksidze.
Experto Consulting, as the official partner of HydroTech Caucasus, is involved in helping pinpoint relevant participants across the Caucasus for the 2016 event.
Just a reminder that in Georgia HPPs with installed capacity of 13 MW or less do not require generation license and HPPs that have installed capacity of 2 MW or less do not even need environmental impact permit. These small players can sell generated electricity to direct consumers without the third party involvement.
The goal of the Georgian Government in the coming years is to generate 100% of its electricity from renewable resources. HPPs, generating electricity produced from machines that are run by moving water, could in fact have the possibility of being associated with the Vein Vessels of the Georgian Economy down the road.