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About
the Project | Strategic
Planning & Capacity Building | Public
Awareness
| Regulatory & Policy
Framework
Projects Home
Strategic Planning & Capacity Building
CORE provides advisory services to the Ministry of Energy of Georgia in energy sector issues, including national energy policy reform, energy sector reform and governance improvement, medium and long term sector strategy development, development of Ministry wide energy management information system, as well as assisting the Ministry in the day to day sector policy issues.
Below on this page you can read about the specific activities implemented in the area of Strategy and Planning Capacity Building:
- Energy Sector Action Plan
- Energy Balance of the Power Sector of Georgia
- Natural Gas Strategy for Georgia
- Electricity Sector Restructuring Workshops
- Workshop for Media Representatives and Energy Sector Stakeholders
- Training Needs Assessment in the Ministry of Energy
- Management Information System
- Pre-Feasibility Studies
Energy Sector Action Plan
Energy
Sector Strategic Action Plan, 2005 – 2008
Upon the request from the Ministry of Energy, CORE assisted the Ministry of Energy in preparing an update of the 2004-2005 Georgia Energy Sector Action Plan prepared by the World Bank in 2004. Based on this document, CORE developed a new Strategic Action Plan for the period of 2005 – 2008. The purpose of this report is to summarize power sector expenditures and technical conditions in relation to the support from the International Financial Institutions and donor organizations. The report illustrates the detailed intra-sectoral cash flows, progress toward full payments, changes in tariff levels, injections of funds by donors and government, comparison of government injections to tax revenues, and other detailed analysis. The report outlines the steps that will be undertaken by the Ministry of Energy in order to rehabilitate the energy sector and ensure its sustainability under market conditions. The main actions include the following:
- Restrict unpaid electricity supply
- Reduce persistent electricity shortages and interruptions in Georgia over the next 18 months
- Facilitate financing rehabilitation of the existing generating facilities, and stipulate installation of the new generation capacity
- Complete privatization of major energy distribution assets and some hydro generation units
- Install new combined cycle gas fired turbines of 300-350 MW total
- Rehabilitate Enguri Hydro Power Plant Unit #3
- Attract investment and facilitate construction and commissioning of Khudoni Hydro Power Plant (630 MW) and high voltage transmission line 500 kV.
The Strategic Action Plan clearly identifies the sources and amounts of required financing. It also addresses the potential of renewable energy utilization, and the social impact of the proposed actions.
Energy Balance of the Power Sector of Georgia
The Ministry of Energy of Georgia has requested that the USAID supported project Advisory Assistance to the Ministry of Energy of Georgia offer its vision of energy strategy concepts for Georgia. This document is the second major segment of the reply to that request. Previous, in May 2006, we issued “Natural Gas Strategy for Georgia” in two parts. That analysis concentrated on natural gas issues inter-fuel comparisons of natural gas and hydro-power for Georgia. The present document offers a broader analysis of power system strategic issues generally, including a deeper look at power sector issues implied by the earlier analysis.
The immediate study “Analysis of ‘Energy Balance’ of The Power Sector of Georgia”, consists of two major subparts. The immediate document is entitled “Part 1: Analysis and Proposals”. Part 1 is a detailed analysis of dispatch scenarios for the power system of Georgia, under present and alternative conditions. Included in Part 1 is an analysis of the effect of hydrological variability on the possible reliance of Georgia on that abundant resource, the effects of alternative scenarios of load growth on how to meet that load, the effects of possible transmission system interruptions, and the importance of regional markets. This last topic is divided into studies of the export capacity of Georgia, and analysis of the effect on Georgia if there were no imports available. Bound separately is “Part 2: History of Georgian Energy Balance”. Part 2 contains a detailed documentation of history of Georgian energy balances, for all fuels, from 1960 to the present. The authors also address certain basic economic and geopolitical issues affecting the energy balance of Georgia. Part 2 is intentionally done as an independent separate study, to provide additional insights.
The present study does not claim to be a complete “energy strategy”, nor an analysis of particular trading partners, contract terms nor recommendation for dispatch of particular units at particular hours. Part 1 concentrates on two principal issues. First, we analyze the capability of Georgia to operate as a predominantly hydro-power based system, and the risks in adopting that strategy. Those “risks” include possible benefits, in form of additional generation capacity, of a particular sort. Thus, second, when combined with the analysis of possible export capacities, our study finds a surprising conclusion: Georgia may be able to export not just energy, but “reliability” as a separate and defined service.
Following our Gas Analysis, we demonstrate, but in more depth, that Georgia should prefer use of hydro power, to natural gas, as a source of electric generation for most domestic purposes. Our detailed analysis of hydrological conditions shows that this can be a feasible solution, even in low water conditions. Reliance on hydro would minimize domestic requirements for external sources of natural gas, and thus increase energy security for the country. Issues of capital cost for hydro power were discussed in the earlier Gas Analysis.Natural Gas Strategy for Georgia
The Ministry of Energy of Georgia has requested that USAID contractor, CORE International, Inc., offer its vision of natural gas energy strategy concepts for Georgia. The resulting work proposes recommendations related to gas policy for Georgia, although it does not claim to be a complete “gas strategy”.
The study consists of two major sub parts. Part 1, Analysis and Proposals, deals with certain broader proposals and the inter-fuel comparisons. Part 1 recommends considering certain wholly commercial solutions for the development of gas trading markets in Georgia. Bound separately is Part 2, Economic and Geopolitical Context. Part 2 contains a detailed documentation of gas supply sources and prices, transit routes, storage, other infrastructure and basic economic and geopolitical issues affecting gas supply to Georgia.
Management Information System (MIS)
CORE International is assisting the Ministry of Energy of the Republic of Georgia in establishing the an overall Management Information System (MIS), which will provide a valuable resource to the Ministry staff in developing policies and strategies for the energy sector in Georgia. The MIS will also provide the Ministry with the capacity for publishing factual and timely information on energy supply, consumption, prices, payment levels, and other relevant features of the energy sector development process in the country. The MIS will also be a useful tool to enhance the capability of the Ministry in making this information available to various energy sector stakeholders and the citizens of Georgia. The MIS is also a useful tool in defining energy sector benchmarks and instituting transparency and accountability in the sector.
As part of this activity, CORE started producing and publishing a monthly energy statistics report (PDF)utilizing input from a variety of energy sector stakeholders in Georgia including the distribution utilities; GNERC, the Georgian regulator; GWEM, the wholesale electricity market; and other private sector organizations including many NGOs active in the energy sector.
As part of building the Ministry's institutional capacity to maintain the MIS and implement it on a sustained basis, CORE also assessed the needs of the Ministry for computers and office equipment, and provided the needed equipment and corresponding software as part of the MIS support process. CORE also provided training to the staff of the Ministry is the use of the MIS for producing a variety of statistics and reports for policy making and public communications and outreach.
Electricity Sector Restructuring Workshops
CORE International, Inc. conducted four high level workshops for key decision makers involved in the energy sector in the Republic of Georgia during June and July of 2005.
Best Practices in Electricity Reform–June 15 – 20, 2005
The workshop provided a detailed overview of the Best Practices Worldwide in Electricity Sector Reform. The Minister of Energy, Deputy Ministers from the Ministry of Energy and the Ministry of Economy, and lead members of Parliament were in attendance. The participants were provided detailed success stories and lessons learned from energy reform programs in various countries. They then had the opportunity to discuss, debate, and evaluate the applicability of these Best Practices in the current energy sector setting of Georgia.
Electricity Market Structure –June 19 – 21, 2005
The workshop focused on the Electricity Market Structure functions, and the importance of regulatory principles. Representatives from the Ministry of Energy, Georgian Wholesale Electric Market (GWEM), Georgian Electricity Systems (GSE), Georgian National Energy Regulatory Commission (GNERC), several electricity distribution companies, and the Academy of Energy attended the workshop. The first day of the training was dedicated to an overview of Electricity Market Structures and the various components of such structures. Each participant had the opportunity to state their issues and questions with Electricity Market Structures. The second day of the training focused entirely on the current and proposed electricity structure in Georgia. As a result of this workshop, the participants learned new and innovative approaches to the electricity market structure development, which will help them to select appropriate and effective measures for restructuring of the wholesale electric market in Georgia.
Electricity Project Financing for the Ministry of Energy–June 27 – July 1, 2005
The third workshop was aimed at raising awareness and educating participants on the fundamentals of energy assets valuation; various factors impacting value such as risk and taxation; security requirements and covenants of financial institutions for lending; and influence of banking requirements on the transaction structure.
Electric Utilities Rate Design – July 4 – 6, 2005
The fourth workshop in this series, conducted by CORE, was a training course on Tariff Design and Rate Setting principles. The objective of this workshop was to provide the Ministry of Energy and GNERC staff with a theoretical basis for tariffs, and hands on experience in tariff calculations. This course promoted an understanding of the principles of tariff related policies, as well as a broader range of tariff methodologies and related accounting practices.
Ministry of Energy of Georgia  |
Presentation of General Manager of JSC  |
Discussion: Chairman of GNERC  |
Awarding of Journalists for one of the best presentations on energy sector operation  |
Workshop for Media Representatives and Energy Sector Stakeholders
Idea to conduct the workshop of media representatives and energy sector stakeholders was born in August 2005 on the meeting of PR working group, organized by CORE International Inc. under the USAID funded program “Advisory Assistance to the Ministry of Energy of Georgia”.
Workshop of media representatives and energy sector stakeholders was included in the “Public Outreach and Participation Comprehensive Plan for 2006” prepared by CORE International Inc. and organized under USAID funding on July 24-29, 2006 in Chakvi, Adjara region.
Representatives of energy sector stakeholders conducted the presentations, describing major activities, achievements and difficulties, faced by their organizations during the last two years.
The last part of the workshop was dedicated to the case study “Energy Sector Viewed by Media” where media representatives prepared the presentations describing their approach on main directions of energy sector operation and development.
All participants of the workshop highly evaluated the seminar and underlined that such working meetings are needed for further development of relations and delivery of comprehensive information on energy sector operations and development strategy.Training Needs Assessment in the Ministry of Energy (MoE)
As an important step in the capacity building process, CORE has conducted a training needs assessment (TNA) to increase the internal capacity of the Ministry of Energy. Given the changing role of the MoE and the privatization and restructuring of the energy sector of the country, new skills, tools and mindsets are required. This training needs assessment takes on a heightened sense of importance both for these reasons and also because the MoE is reorganizing and hiring new employees. CORE 's main focus in conducting this TNA is in the MoE but it also extends to other Ministries and to the Parliamentary committees that will have an impact on the Ministry of Energy's course in completing the privatization process.
From the results of the TNA, it was decided that a two-phase training should be performed for the MoE on various topics. The issues of Energy Sector Reform and Privatization are the highest priority at the moment. Therefore, as part of the Phase I training, CORE will conduct a series of training courses for the Senior and Mid level management of the MoE, Parliamentarians and Senior Government Executives in June and July, 2005.
The training will include the following courses and events:
- Best Practices in Electricity Sector Reform - three-day workshop
- Best Practices in Electricity Sector Reform, Executive Level - one day seminar
- Market Structure - two day seminar
- Electricity Project Finance - five day workshop
- Electricity Privatization Executive - three day discussion panel
- Tariff Design and Rate Setting - three day workshop
- Best Practices in Electricity Sector Reform - press briefing
The above programs are meant to expose decision makers in Georgia to the worldwide best practices in energy sector privatization and reform.
Pre-Feasibility Studies
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As part of strategic development planning for the Georgian energy sector, the Minister of Energy of Georgia asked CORE to assist the Ministry in the preparation of two pre-feasibility studies to evaluate two energy sector projects. These include a study for the privatization of the 630 MW Khudoni Hydro Power Plant (HPP) and the installation of an associated 500 kV transmission line. As the exact form of privatization at this stage is not known, and construction of both the HPP and the transmission line is yet to be completed, CORE developed a pre-feasibility study describing the technical feasibility of the projects as well as their benefits to the sector.
Pre-Feasibility Review of Khudoni Hydro Power Plant
The Khudoni HPP is one of several major hydro power generation facilities
planned under the Soviet Union to use the large hydro power generation capacity
of the Enguri River basin in western Georgia. While some other stations including
Enguri HPP were completed, the upstream facility at Khudoni was only partially
constructed. Construction was halted for a combination of political, environmental
and financial concerns.
The essential economic result of this analysis is that Khudoni HPP, Georgia’s
biggest hydro power plant, could be financed if it were sold largely to the
export (regional market), and/or if generation prices within Georgia were substantially
higher than at present. The plant would add a significant volume of energy
generation capacity and thus, together with the existing Enguri HPP, enables
much better system operation and reliability in winter months and holds the
potential to allow for significant energy exports (especially in summer) from
Georgia to neighboring countries.
Pre-Feasibility Review of 500 KV Transmission Line “South Georgia”
The pre-feasibility study introduces a project concept of the proposed 500 kV transmission line - South Georgia as a potential investment opportunity. Despite large generating potential, there is a significant generation-load imbalance in the Georgian power system: two-thirds of Georgia’s energy resource is located in the north-western part of the country, while two thirds of the domestic demand is located in eastern Georgia. Most of the expected export market is located in countries to the south of Georgia. Power delivery to these markets requires a reliable high voltage transmission network. At present only one strong line connects West and East Georgia, the 500 kV transmission line “Imereti” – “Kartli-II” – “Kartli-I”. There is a constant power flow from east to west and in case of any fault on this line especially during autumn or winter a large power deficit in the east incurred, including frequent total blackouts of the system. Even for planned repairs of the 500 kV line there is no alternative strong route which could be used to deliver power from West to East. This is obviously harmful for the Georgian economy and the country’s ability to reliably interconnect with neighboring countries’ systems. Having only one 500 kV longitudinal backbone between generation and load in the Georgian system not only reduces internal reliability of the grid, but also limits existing and future power swap or export potential. The proposed new 500 KV Transmission Line project is to be used to remedy this drawback of the Georgian power grid and provide unrestricted export route for the excess power generated in Georgia
Pre-Feasibility Review of Namakhvani Cascade of Hydro Power Plants
The Namakhvani HPP Cascade is one of several large to medium hydro power generation facilities, planned under the Soviet Union, to use the large hydro power generation capacity of the rivers in western Georgia. Construction was halted for a combination of political and financial concerns. The proven feasibility of use of the Rioni River flow for hydro power generation, together with the currently expected 450 MW peak capacity potential of Namakhvani cascade, have generated recurring interest in completion of the Cascade.
The essential economic result of the analysis is that Namakhvani HPP Cascade could be financed if it were sold largely to the export (regional market), and/or if generation prices within Georgia were substantially higher than at present. However, the plant adds a significant volume of energy generation capacity and thus together with the existing hydro power plants on Rioni river, enables much better system operation in winter months and substantial energy exports (especially in summer) from Georgia in excess of the country’s domestic load.
About
the Project | Strategic
Planning & Capacity Building | Public
Awareness
| Regulatory & Policy
Framework
Projects Home
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