Recommendations on Renewable Energy Support Schemes

The program is being implemented by Deloitte Consulting LLP under a USAID contract, AID-OAA-I-13-00018. The objective of the program is to support Georgia's energy market development per its obligations under the Energy Community Treaty (EnCT), build the capacity of the Government of Georgia (GoG) and relevant institutions to evaluate the fiscal and long-term impacts of regulatory changes, promote energy investments, primarily in variable renewable energy development, and support the integration of non-hydro renewable energy into the power system. The program's ultimate goal is to enhance Georgia's energy security through an improved legal and regulatory framework and increased investments in the energy sector. The expected outcome of the program is an energy market legal and regulatory framework that complies with European requirements and encourages competitive energy trade and private sector investments. The program assists the Ministry of Economy and Sustainable Development of Georgia (MoESD) in the development of a support scheme for encouraging investment in electricity generation infrastructure from a diversified source of native resources. The USAID Energy Program has identified various renewable energy supporting mechanisms, including tax exemptions, property tax financing, soft loans, loan guarantees, feed-in tariffs, feed-in premiums, power purchase agreements, public-private partnerships, reverse auctions, and green fees. The program provides a detailed description of each mechanism and full justification for each recommendation. The program aims to assist the MoESD and other public entities in implementing the selected support mechanism, developing an enabling environment, and promoting the new schemes upon identification. The analysis of the support mechanism reveals that tax exemptions, property tax financing, and soft loans can provide financial incentives for renewable energy investments. Feed-in tariffs and feed-in premiums can provide a stable revenue stream for renewable energy producers. Power purchase agreements and public-private partnerships can facilitate investment in renewable energy projects. Reverse auctions and green fees can promote competition and reduce the cost of renewable energy. The program recommends a combination of these mechanisms to create a supportive environment for renewable energy investments in Georgia. The program's recommendations are based on the analysis of the support mechanism and the country's specific context. The program aims to support the MoESD and other public entities in implementing the selected support mechanism, developing an enabling environment, and promoting the new schemes upon identification. The program's ultimate goal is to enhance Georgia's energy security through an improved legal and regulatory framework and increased investments in the energy sector. The USAID Energy Program's recommendations on renewable energy support schemes are designed to promote the development of renewable energy sources in Georgia. The program's analysis of the support mechanism reveals that a combination of financial incentives, stable revenue streams, and competitive mechanisms can create a supportive environment for renewable energy investments. The program's recommendations aim to support the MoESD and other public entities in implementing the selected support mechanism, developing an enabling environment, and promoting the new schemes upon identification.