Georgia Energy Regulatory Partnership: Technical Assistance on Electricity Distribution System Operations and Development of Grid Code

The project was undertaken under a cooperative agreement between the National Association of Regulatory Utility Commissioners (NARUC) and the United States Agency for International Development (USAID). The consultant's review of GNERC's draft Distribution Network Code took into consideration key issues identified by GNERC and other stakeholders, recommended practices for Georgia, international best practices, and the requirements of the European Union (EU), specifically EU Directive 2009/72/EC. The consultant provided a revised draft of GNERC's Distribution Network Code to be taken into consideration by GNERC for the efficient implementation and enforcement of the provisions of the Distribution Network Code. The Distribution Network Code is designed to permit the development, maintenance, and operation of an efficient, coordinated, and economical system for the distribution of electricity, facilitate competition in the generation and supply of electricity, and efficiently discharge the obligations imposed on the Distribution System Operators (DSOs) by the distribution license and comply with any relevant legally binding decisions of the European Commission and/or Agency for the Cooperation of Energy Regulators. The consultant made two one-week trips to Tbilisi, Georgia, to work with GNERC staff and present his review of the draft Distribution Network Code. The consultant's initial trip to Georgia led to an inception report on the DSO legal framework, which was incorporated into the final report. The final report includes the revised version of the Distribution Network Code (Annex A) and identifies gaps in the DSO legal framework for implementation of retail competition in the electricity sector consistent with EU requirements, along with the sequencing and timing of legal amendments necessary to bring the Distribution Network Code up to EU requirements. The report is organized into five sections: introduction, specific issues to address in Georgia's Distribution Network Code, key design elements of a net metering policy and recommendations for Georgia, consultant's review of draft Distribution Network Code, and need, sequencing, and timing of legal provisions. The consultant reviewed all components of GNERC's draft Distribution Network Code and suggested revisions and additions as necessary to make it consistent with international practice and EU requirements. The GNERC draft Distribution Network Code has four chapters: connections, planning, operations, and metering. GNERC developed the chapters relating to connections, planning, and metering, while the distribution licensees developed the chapter relating to operations at GNERC's request. The consultant's review of the draft Distribution Network Code identified key issues to be considered in the development of the distribution grid code, including the need for a clear and concise code, the importance of stakeholder engagement, and the need for a flexible code that can adapt to changing market conditions. The consultant's final report provides a revised draft of GNERC's Distribution Network Code, which includes the following key elements: a clear and concise code, a stakeholder engagement process, a flexible code that can adapt to changing market conditions, and a net metering policy that meets EU requirements. The report also identifies gaps in the DSO legal framework for implementation of retail competition in the electricity sector consistent with EU requirements, along with the sequencing and timing of legal amendments necessary to bring the Distribution Network Code up to EU requirements. The consultant's review of the draft Distribution Network Code was based on a thorough analysis of the code's content and structure, as well as stakeholder feedback and input. The consultant's recommendations for the revised Distribution Network Code were informed by international best practices, EU requirements, and the needs of the Georgian electricity market. The revised Distribution Network Code is designed to be flexible and adaptable to changing market conditions, while also meeting EU requirements and facilitating competition in the generation and supply of electricity. The consultant's final report provides a comprehensive review of the draft Distribution Network Code and identifies key issues to be addressed in the development of the distribution grid code. The report also provides a revised draft of GNERC's Distribution Network Code, which includes key elements such as a clear and concise code, a stakeholder engagement process, a flexible code that can adapt to changing market conditions, and a net metering policy that meets EU requirements. The report is a valuable resource for GNERC and other stakeholders in the Georgian electricity market, providing a comprehensive review of the draft Distribution Network Code and identifying key issues to be addressed in the development of the distribution grid code.