The FINANCIAL — The positive impact it will have on global climate change and energy diversification are the main reasons why Georgia should switch to the implementation of renewable energy. Over 15% of Azerbaijani energy is already made up by alternative power; Armenia is also actively practicing it. The existing gap in this field in Georgia is encouraging foreign companies that operate in renewable energy to test the Georgian market.
The 2nd Annual South Caucasus Infrastructure & New Energy Investment Summit organized by Euroconvention Global was held in Georgia last week. The FINANCIAL participated as the main media partner of the event.
“After the success of the Summit’s pilot event in 2014 we were obliged to step up to meet the expectations of the one in 2015. We at Euroconvention Global rarely repeat events on an annual basis unless the host countries are among the most dynamically developed regions of the world. We pay great attention to the economic and political development and importance of the hosting countries and therefore the decision to repeat the South Caucasus Infrastructure & New Energy Investment Summit came very easily to us. This year we tried to hold discussions from a more global perspective. We pointed out the growing importance that the South Caucasus countries are gaining on the transportation map. We spoke about transcontinental energy corridors, transportation of goods and people between Asia and Europe through the regions developing infrastructure and constantly improving access to logistic services,” said Tanguy de Craecker, Managing Director of Euroconvention Global.
“The advantage of renewable energy compared to hydro power or nuclear power is simply the fact that it can be built fast, meaning in a year or two, while traditional power requires over ten years. Investments compared to nuclear or hydro power are much lower for such a unit, and you are very flexible in terms of operation, you can easily switch on and switch off. This means that it can be used as a buffer for any kind of lack in electricity supply. This happens in Georgia, especially in the wintertime. There is sometimes a lack of electricity in certain areas. With these kinds of units you can easily secure the electrical energy supply,” Thomas Ruedisser, Sales Director of the CEE and Russia at Cockerill Maintenance & Ingenierie (CMI), told The FINANCIAL.
“For us it is important to find out if there are potential projects in Georgia where we can work as potential suppliers. Actually it is a time for getting a feeling of Georgia and also its neighbouring countries. My aim is to get an overview of CIS as a whole,” said Ruedisser.
CMI is providing customers with so-called thermal power plants. These are power plants in which the prime mover is steam-driven. Water is heated, turns into steam and spins a steam turbine which drives an electrical generator. Out of CIS countries, CMI has only been operating in Russia since the ‘80s. However, Ruedisser said that for them and other western suppliers Russia is “dead for now”.
According to Ruedisser, Georgia is developing quite well in terms of infrastructure. As he said, the road building and railway system are well-organized and very interesting. “However, we are looking into an energy project. It is our first approach to Georgia ever. The company has never been here before. For us it is very important to collect contacts within the energy sector here in Georgia, in order to present ourselves and get better known in the country, especially our products. We hope that it will result in some projects for us sooner or later.”
William Hanlon, Deputy Head of the OSCE office in Yerevan, gave a presentation about renewable energy and its development to Armenia. “These topics are important for the region. We as a security organization are interested in it from that perspective. Renewable energies are important for several reasons. Number one is its positive impact on global climate change and also for energy diversification. It is important for energy security in general. In terms of usage, natural gas and hydro power energy are very prominent in domestic use. We would like to learn the general trends that are going on in the region as a whole.”
As Hanlon said, in Armenia there are lots of projects being implemented in transport and infrastructure. “The situation is the same in Georgia. So there are lots of opportunities they need to develop. That is an important part of developing the systems as a whole so the region can modernize and develop. That will be beneficial for all three countries of the South Caucasus,” he added.
“Energy stability and environmental issues are the main challenges of the energy sector. There are general concerns now in the international community that global climate change is a reality. So we have to address those issues. When we think about sustainable development it is not only about our activities that we are doing now but also the future generations. Accordingly, we have to have a long term vision of how to develop energies so that we do not compromise future generations and their overall quality of life,” said Hanlon.
Hydro power stations remain the main source of energy in Azerbaijan. However, the country is quite successfully practicing solar and wind energy. “Over 15-16% of the energy system is made up by renewable energy. Azerbaijan has its own strategy of developing its energy system. Energy efficiency is the core factor in it. Saving and producing more energy will help us to increase our export share. The main strategy of our country is to supply our neighbouring countries. Another advantage of renewable energy is providing electricity for consumers located next to the station. We do not need to transport energy over long distances, which is very profitable and convenient as it results in less loss,” said Jamil Malikov, Senior Adviser at the State Agency of Alternative and Renewable Energy Sources of the Azerbaijan Republic.
“Our main interest in Georgia is its location. We are mostly focused on using it as a transit country,” Malikov said.
“Mostly private Azerbaijani businessmen are interested in investing in small hydro energy projects in Georgia. However, at present it is hard to name when the exact project will be launched. The key issue for now is providing investment support for local and Azerbaijani investors from international financial institutions. To be more specific, we need the security of export credits,” Malikov told The FINANCIAL.
According to Green Georgia, focused on identifying green business opportunity areas in Georgia, alternative renewable resources in Georgia incorporate: wind, solar, biomass and geothermal energy. Geothermal waters are currently used in Georgia for district heating, fish pound heating, agricultural drying, industrial applications and greenhouse gas heating. Total geothermal water reserves exceed 160,000 m3 per day. Eighty percent of these resources are located in the western part of the country, but geothermal fields are also found in southeastern Georgia.
Georgia is endowed with major potential for biomass power plants, especially for producing heat and hot water. Biomass is considered to be one of the most important sources of power supply in rural areas, given that forests cover 40% of the country’s total territory.
Georgia is endowed with rich wind energy potential, offering an estimated annual power generation capacity of up to 4 billion kilowatt-hours. Wind speed measurements have been carried out for several decades at 165 metrological substations. According to research, the most suitable areas for wind power plants in Georgia are in the Caucasus high mountain zone, the highlands of southern Georgia (in the Javakheti region), and the southern section of the Black Sea coast.
Its geographical location also assures Georgia high sun radiation, and solar power is a reliable and environmentally friendly source of energy. Annual hours of sunshine total some 250 to 280 days, enabling power generation of up to 108 MW. This solar potential can heat water up to temperatures of 40-50 degrees Celsius. A number of projects have been implemented in protected regions of Georgia (in Mtitala, Tusheti and Kintrishi Protected Areas, for example) to provide the population and tourism facilities with solar-powered electricity and water heating.