Analysis of Identified Issues and Barriers Addressing to Renewable Energy Development

The program is being rendered by Deloitte Consulting LLP under USAID contract AID-OAA-I-13-00018. The objective of the USAID Energy Program is to support Georgia's efforts to facilitate increased investment in power generation capacity as a means of ensuring national energy security, facilitating economic growth, and enhancing overall national security. The project will have a significant impact on the Government of Georgia's (GoG) energy market reform efforts aimed at complying with EnCT obligations. The purpose of the USAID Energy Program is to support energy market development in Georgia per the country's obligations under the EnCT, build the GoG's capacity to evaluate the fiscal and long-term impacts of regulatory changes, promote energy investment, especially in variable renewable energy development, support the integration of non-hydro renewable energy into Georgia's power system, and provide strategic advisory services to the GoG to increase Georgia's energy security. Georgia is remarkably rich in the potential of Renewable Energy Sources (RES), which can be used for the creation of additional capacity by means of domestic and foreign investments. To achieve this goal, it is vital to improve investment climate through the creation of a stable, transparent and non-discriminatory legal basis; through deepening strong and stable trading relations with neighboring countries' energy markets; through the development of corresponding domestic and cross-border infrastructure. The development of renewable resources is key to tackling climate change and deploying cleaner sources of energy. To satisfy the growing demand for electricity in the country, numerous measures need to be implemented. The measures at the same time should correspond to the commitments undertaken within the scope of cooperation between EU and Georgian Government in the energy sector. Georgia has committed itself to a series of transformation in the energy sector by signing the Protocol Concerning the Accession of Georgia to the Treaty Establishing the Energy Community, on October 14, 2016; ratified by the Parliament of Georgian on April 21, 2017. The main objective of the market opening is to entitle each eligible customer in Georgia to a free choice of the supplier and its change. The Liberalized Market will ensure the security of supply, efficient market competition which provides electricity to customers at fair, transparent and cost reflective prices. To meet the obligations under the treaty, and comply with relevant EU Acquis, Georgia has to fully deregulate and liberalize energy market. The national target as 30% of renewable energy in energy mix by 2020 is set based on Directive (2009/28/EC) and consultations with Energy Community Secretariat. Construction of new renewable power plants will increase the share of clean energy in the energy mix, decrease import dependence and create more opportunities for integration with neighboring systems. Georgia wants to facilitate the utilization of the country's clean energy potential and enable the country to become a regional platform for clean energy trading. In order to meet the demand, the Government of Georgia has a solid position in creating strong and stable climate for investments. Consequent to the EU harmonization process, the Parliament of Georgia just adopted the Law on Public-Private Partnership (PPP). With the support of USAID Energy Program, the Ministry of Economy and Sustainable Development of Georgia (MoESD) is working on developing secondary legislation on Support Mechanisms for promoting renewable energy in Georgia. Despite its significant benefits, the integration of renewable energy into the energy mix faces several challenges, including the lack of a stable and transparent legal basis, inadequate infrastructure, and limited access to finance. The USAID Energy Program aims to address these challenges by providing technical assistance to the Government of Georgia and other stakeholders in the energy sector. The program will focus on several key areas, including the development of a stable and transparent legal basis for renewable energy, the improvement of infrastructure, and the facilitation of access to finance. The program will also provide strategic advisory services to the Government of Georgia to increase Georgia's energy security. The expected outcome of this program will be the implementation of a legal and regulatory framework that complies with the EnCT and other applicable EU requirements, encourages competition within the energy market, and galvanizes private sector investment. The program will also contribute to the achievement of Georgia's national target of 30% of renewable energy in energy mix by 2020.