Tbilisi (GBC) - Hydro generation met 69.7% of total electricity demand in 1H23, despite a 3.6% drop in total output.
The decline in hydro generation was primarily due to a 14.0% y/y decrease in the generation of the Enguri and Vardnili cascade. Wind generation accounted for only 0.6% of the grid's supply. Thermal generation (21.9%) and direct imports (7.8%) covered the remaining 29.8% of the demand.
The import share was unexpectedly low this year, for comparison share of electricity imports in the first half of the each year during 2019-21 was 16.7% on average.
Thermal generation increased by 12.8% y/y, while electricity imports decreased by 48.9% y/y in 1H23. This shift from import to thermal generation happened due to the cost difference: the price of commercial import was in the range of USc 7.0-7.5/kWh, whereas price of thermal generation ranged between USc 3.4 and USc 5.4/kWh depending on TPP. Notably, the thermal generation prices were unaffected by global price spikes due to the availability of "social gas," a cheap gas supplied to Georgia for transit via the South-Caucasus Pipeline from Azerbaijan to Turkey. Moreover, this supply mix facilitated start of electricity exports earlier this year from April. This "social gas" is limited and used for residential use and by thermal power plants. These boundaries also limit the volume and period of electricity exports.