ISET Conference Focus on Young Generation’s Role in Georgia

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The FINANCIAL — The International School of Economics at Tbilisi State University (ISET) and the Hydropower Investment Promotion Project (HIPP) by USAID are trying to expand the role of the country’s young generation in the development of the energy sector in Georgia.


The FINANCIAL — The International School of Economics at Tbilisi State University (ISET) and the Hydropower Investment Promotion Project (HIPP) by USAID are trying to expand the role of the country’s young generation in the development of the energy sector in Georgia.


The conference covered the following subjects: “Green Certificates” being issued as an accelerator for investments in new hydroelectric power plants (HPPs); new HPP projects – evaluation of the social costs and benefits; small hydropower development; seasonality issues and problems with building the new HPPs; the wind alternative; energy efficiency.

The main goal of the conference was to increase the young generation’s role and participation in the development of the energy sector. This sector is developing quite rapidly in Georgia and therefore the intensive participation of its youth is crucial, say the organizations.

“The energy sector holds a crucial role in the development of the Georgian economy,” said Jill Kelly, Head of the USAID Caucasus Environment and Energy Office. “We have implemented several huge projects and one of them was a special programme for energy sector students. We have already had 70 graduates as a result of this project and at present 25 students are taking part in the programme.”

Jake Delphia, CoP of HIPP, said that they need many more specialists in the country’s energy sector. The sector is becoming more competitive and soon lots of new job places will be created. Therefore the training of professionals to fill these places has to become more intensive.

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ISET is also training energy economists. 20 of the 100 specialists which have graduated from ISET are specifically economists of the energy sector. ISET graduates along with other young specialists discussed different issues of the energy sector at the conference.

The development of renewable energies is one of the main issues facing the global energy sector. Georgia, like every country, has the responsibility to reduce emissions in the atmosphere. Despite this however green certificates, which are issued for using renewable energy, have not yet started being awarded in Georgia.

“One green certificate is issued for 1 megawatt/hr renewable energy,” said Keti Skhireli, Specialist of HIPP. “1 billion certificates were issued by 2011, which means that 1 billion megawatt/hr renewable energy was generated. There is not even discussion in Georgia yet about starting the sale of green certificates even though this is a very good tool with which to attract investments to the energy sector.”

There are some other certificates which also prove that a country or company is using renewable energy and all of them will encourage and support the attraction of investors to the country’s sphere. This is particularly relevant given that Georgia has a big potential of hydro projects. The economically efficient hydro-potential of the country is about 40-50 TW/hr. Ten plants are currently in the process of getting registered.

“Georgia has huge potential of hydropower development but still investors aren’t hurrying to enter the country because of several uncertain factors,” said Giorgi Kelbakiani, ISET graduate. “One of them is the competition with the old plants in the country, which provide cheaper energy. And the second uncertainty is that they don’t know who the buyers will be. The regulations are not supportive either.”

Building one megawatt hydropower station costs 1 million GEL. The time it takes to see return on investment is 5-10 years depending on the size of plant.

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One example of a new HPP in Georgia is Shilda. The Georgian Green Energy Development Company is building the plant in Kakheti, on the River Chelti in the Kvareli Region. Its total installed capacity is 5 MW. Average annual generation amounts to 30 GWh. The estimated cost of the project is 7 million USD and the investment amount will be covered in about seven years. The plant will start operating at maximum capacity in December 2013.

Georgia has big potential to harness wind energy as well, but the sector is not developing at all. There are several impeding factors here including the instability of the product, difficulty in managing the product, and impossibility to store the energy. Despite these factors however wind energy makes up 15-20 percent of the total amount of energy provided for use in the countries Denmark, Portugal, Spain and Ireland. This means that it is possible to overcome such problems in which case wind energy can be used successfully.
“In Georgia the main problems that stand in the way of developing wind energy are high cost and lack of experience,” Kelbakian explained. “If producers have permission to sell, the lowest price will be 4.9-6.8 cents per KWh. Nowadays in Georgia the price of thermal energy is 4-5 cents per KWh. The price of imported energy amounts to 3-5.5 cents per KWh; the price of hydropower is much lower.”

“Lack of experience in building and managing plants, as well adaptation to the system is another main problem hindering development of the sector in Georgia,” he added. “In spite of all this though we must start pilot projects as soon as possible.”



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