GEORGIAN ENERGY SECTOR IN

VIEW OF EU ENERGY UNION GOALS

World Experience for Georgia

2016

This publication has been produced with the assistance of the European Union. The contents of
this publication are the soleresponsibility of World Experience for Georgia and can in no way be taken
to reect the views of the European Union.


Contents
Introduction...............................................................................................................................3
2.Energysecurity,solidarityandtrust......................................................................................3
2.1.Nationalenergymixandprospectivedevelopments.....................................................3
2.2.Cooperationandconfrontationinrelationsamongsuppliersandconsumers..............6
3.Europeanenergymarket.......................................................................................................7
3.1.PlaceandroleinintegrationofEuropeanenergymarket..............................................7
3.2.Placeandroleinintegrationwithneighbors..................................................................7
3.3.RecommendationsfornationalandEUauthorities.......................................................8
4.Energyefficiencycontributingtomoderationofdemand....................................................9
4.1.Situationwithenergyefficiencyonlegislativelevelandpracticalachievementsin
comparisonwiththeEUresultsby2015...............................................................................9
4.2.WheretheEUcouldsupportenhancingenergyefficiency?.........................................10
4.3.Nationalchallengesandwaystosolvethemrecommendations..............................10
5.Decarbonizingtheeconomy................................................................................................11
5.1.SituationinthecountrywithregardtoParisagreementobligations,nationalplans
toachieve,challenges..........................................................................................................11
5.2.Nationaleconomicprogramsintermsofdecarbonization(wherestayseachof
countries).............................................................................................................................12
5.3.Practicalstepstoproceedtowardsdecarbonization....................................................13
6.Research,InnovationandCompetitiveness........................................................................14
6.1.Nationalpotentialinenergysectorresearch(institutions,resultsinrecentyears)....14
6.2.ExistingandpossiblecooperationwiththeEUinstitutions.........................................15
6.3.Bestpracticesofcooperation,recommendationstoenhance(Horizon2020,etc.)....15
Conclusions..............................................................................................................................17

Introduction

Georgiasmainenergypolicyobjective1istoraisecountrysenergysecurity,whichservesas
atoolforensuringnationalvaluesandintereststhroughuninterruptablesupplyofvarious
energyproductswithacceptablequantity,qualityandprice.

According to the Main Directions of the State Policy in Energy Sector of Georgia, Gradual
approximation of Georgias legislative and regulatory framework with the EUs Energy
acquis is one of key directions. This process will facilitate: competitive, transparent and
effective energy market model as well as creation of attractive and stable investment
climate; development of energy trade between Georgia and EU countries; utilization of
renewable energy resources and facilitation of energy efficiency oriented activities in the
country,througheconomicallyandecologicallyfeasiblemeans.

Georgia can play an important role of European energy security, being a key corridor for
deliveringoilandgasfromtheCaspianandCentralAsia,andthecreationofanintegrated
electricitygridtosupplycleanhydroelectricpowertheregionandEuropeanconsumers.

On 14 of October2, 2016 in Sarajevo the Minister of Energy Mr. Ilia Eloshvili signed the
protocol of accession of Georgia to the Treaty Establishing Energy Community3. After
ratification by Georgian parliament Georgia will become an official and fullfledged
ContractingPartyoftheEnergyCommunity.

Accession to Energy Community is a very important step for Georgia on its way to EU
integration and development of energy sector. Georgia will be given an opportunity and
support to align its energy sector with EU standards including the creation of competitive
market,enhancementofenergysecurity,promotionoftheuseofrenewableenergysources
andadvancementofenergyefficiency.

2.Energysecurity,solidarityandtrust
2.1.Nationalenergymixandprospectivedevelopments
In2014totaldomesticenergysupplywas4.48milliontonoilequivalent(Mtoe)fromwhich
1.37 Mtoe was domestic energy production (31% of the countrys total domestic energy
supply).Themainsourcesofenergyarenaturalgas,oilproducts,hydro,firewoodandcoal.
Georgia is an energy import dependent country. The import ranges from 62% to 73%
depending on the specific year. Azerbaijan and Russia are the main energy exporting
countries.Importednaturalgasandoilproductsaccountfor41%and25%ofthecountrys
1

MAIN DIRECTIONS OF THE STATE POLICY IN ENERGY SECTOR OF GEORGIA

http://energy.gov.ge/show%20news%20mediacenter.php?lang=eng&id=633
3
http://energy.gov.ge/projects/pdf/news/Concerning%20The%20Accession%20of%20Georgia%20to%20the%20
Treaty%20Establishing%20the%201453%20eng.pdf
2

energy supply, respectively. Hydro is the third largest source, accounting for 16% of total
energysupply.Fuelwoodalongwithhydropowerisalargeindigenousenergysourceanda
strong factor for reducing countrys energy dependence. Currently fuel wood accounts
about34%intotaldomesticenergysupply.4

Large scale infrastructure rehabilitation projects, institutional and legislative reforms have
been implemented in Georgia over the past few years, led to modernization of Georgian
energy sector as a results of which supply of energy resources have been diversified and
localresourceshavebeendeveloped.Howeverduetodemandgrowthandthedominance
ofhydroenergyresourcesdependentinclimaticconditions,itisdifficulttomeetcountries
energyneedspermanentlywithonlylocalresources.
Georgian energy sector may face various challenges, in providing uninterrupted energy
supply to the households and economic sector. This may be, caused by difficulty of
guaranteedprovisionofimportedrecourseduetounstablepoliticalsituationintheregion,
climateconditions,infrastructurebreakdown,naturaldisastersetc.
Considering all the facts, the focus of the ministry of energy is placed on effective
rehabilitation/reconstructionofenergyinfrastructureandimplementationofdevelopment
projects,aswellasontheimprovementofthesystemreliability.5
According to the 10 Year Plan for Development of Georgias Natural Gas Infrastructure
201620256 natural gas annual consumption might increase up to 3.5 billion m3 for 2030
(peak load will increase 1.6 times and more). Increase in demand requires adequate
developmentandinvestmentinnaturalgasinfrastructurewhichissubjectofatechnicaland
financial support itself. The total cost of the projects is 1.5 billion GEL. Construction and
operation of underground gas storage in 20162020 is one of the most important
infrastructureprojects.
The plan which includes all anticipated projects over 10 years period was prepared in
accordancewiththeDirective2009/73/ECoftheEuropeanParliamentandoftheCouncilof
13 July 2009 concerning common rules for the internal market in natural gas, Georgian
energylegislationandinternationalregulations.
4

http://geostat.ge/cms/site_images/_files/english/Energy/Energy_Balance_2014_ENG.pdf
Energy sector of independent Georgia, 2016
6
http://www.gogc.ge/uploads/other/1/1064.pdf / http://www.gogc.ge/uploads/other/1/1071.pdf
5

It has to be mentioned, that Georgias energy strategy document is in the process of

development.Ministryofenergyhaspresentedelectricitychapteronly,whichdefinesthe
mainprinciplesofthestrategy.Theseprinciplesinclude:
Improvementoflegislation
Improvement of investment environment through transparent procedures and
competitivemarkets
StrengtheningGeorgiastransitrole;
Developingelectricityandnaturalgasmarketsandtradingmechanisms.
ThefirstNationalEnergyEfficiencyActionPlan(NEEAP)identifieskeyhorizontalmeasures
andsectoral:
BasedonbestpracticesonefficientandsectorfocusedenergyefficiencyfundsinEU
countries creating financing schemes for setting up an Energy Efficiency Fund in
Georgia;
Gradualintroductionofenergyauditsandmanagementsystems;
IntroductionofStandardsandnormsandcertificationschemesinbuildings;
Mandatorylabelingforelectricalhomeappliancesfrom2017andbanonimportof
lowefficienthomeappliances;
Amendment in the law on procurement procedures considering the Green
Procurementscomponent;
SectorMeasures:
Energytransformation,transmission,distribution,anddemandresponse
o Natural gas savings through replacement of old Thermal Power Plants with
efficientCombinedCycleGasTurbinetechnology
o Energyefficiencysavingspotential(36%ofallmeasuresfor2020)
Reductionoflossesinhydropowerproduction
o Investmentsinrenovatinghydropowerstationsandinvestigatingchangesto
thedispatchsystemtoimproveefficiency/costs
o Energyefficiencysavingspotential(8%ofallmeasuresfor2020)
RegulationsontheRulesofcalculationofnormativeelectricitylosses&Reductionof
lossesingaspipelines
Efficientwoodburningstoves
Lighting: Potential savings examined for each subsector: streetlighting, industry,
commercial/residentialbuildings,publicbuildingstotalof7%ofallsavingsfor2020
Recommended savings programmes in industry covering various sectors (cement,
metal industries, crosscutting related to boilers/steam production and distribution
andcrosscuttingrelatedtofans,pumps,compressorsandrefrigerationsystem)
Buildings:
o ConstructionPermitsfordesignandconstructionshallbeissuedaccordingto
theEEmeasuresfrom2016
o Reconstruction and retrofitting of Public Buildings considering the EE
measuresfrom2016
5

 Transport improvements in cities which are signatories of the Covenant of Mayors

(Est.710%ofsavingsofallmeasures)
Measureslinkedwithtechnicalassistance,energyaudits,andawarenessraising

2.2.Cooperationandconfrontationinrelationsamongsuppliersandconsumers

ThesouthCaucasusPipelineExpansionProjectalongwiththeTransAnatolianNaturalGas
Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP) represents key projects of the
Southern Gas Corridor for Europe. After implementation of these projects, Azerbaijan gas
and potential gas extracted from Central Asia fields will be transported to Turkey and
European energy markets via Georgia. Georgias involvement in the project enhances
Georgiasroleasatransitcountryintheregionanditsimageofareliableimportanttransit
partner.7
According to the 10 Year Plan of Development of Georgias Natural Gas System gas
volume increase from Russia to Armenia or new transit projects through Iran are not
expected. Azerbaijan, with Georgia and Turkey is developing as main important player to
deliverCaspianhydrocarbonstotheEurope.Firstofall,itreferstotheKazakhoilresources
andTurkmenistannaturalgasresources.8

Considering existing political tension between Georgia and Russia, interruptions in gas
supplycanbeexpected.RussiaoftenusesGazpromasaninstrumenttogainpowerover
Georgia.Forexample,inwinter2006,RussiacutoffthegassupplytoGeorgia,whichwas
laterexplainedastechnicalproblem.Attheendof2015,Russiaagainraisedthepossibility
ofcurtailinggassuppliestoGeorgiaatatimewhenAzerbaijan,theonlyalternativesource,
wasunabletomeetGeorgia'sexpandingneedinfull.Finally,onMarch4,2016Georgiaand
Azerbaijans SOCAR signed agreement about SOCAR providing additional 500 million cubic
metersofgasandtheEnergyMinisterKakhiKaladzesaidthatGeorgiawouldnolongerneed
topurchaseadditionalgasfromRussia.9

Energy sector of independent Georgia, 2016

http://www.gogc.ge/uploads/other/1/1064.pdf
9
http://dfwatch.net/georgia-aims-to-maintain-10-share-of-gazprom-natural-gas-transit-41451
8

3.Europeanenergymarket
3.1.PlaceandroleinintegrationofEuropeanenergymarket
GeorgiadoesnotshareadirectlandborderwithmembersoftheEnergyCommunityandEU
countries. However, Turkey is trying to integrate and harmonize its energy system with
Europes,whichcanalsoalleviatethesecurityproblemsforGeorgia.
GeorgiaisnotconnectedtotheEUenergymarketsdirectly,howeverestablishingthenew
energylinksbetweenGeorgiaandtheEUincludingtheprojectsofSouthernGascorridoror
strengtheningelectricityinterconnectionwithTurkeyprovidestheopportunitiesthatshould
beexploredandutilized.
JoiningtheinternalelectricitymarketofEuropeacrosstheEUmightallowGeorgiatoexport
itsexcessrenewableenergythroughTurkeytolucrativeEuropeanmarkets.Thiscanbring
both energy and climate mitigation benefit. Climate support mechanisms for RE
internationaltradecouldunlockavasthydropowerpotentialinGeorgiaaswellasinother
countries.
ProjectsofCommonInterest10(PCI)Clusterofintegrated,dedicatedandscalabletransport
infrastructureandassociatedequipmentforthetransportationofaminimumof10bcm/a
ofnewsourcesofgasfromtheCaspianRegion,crossingAzerbaijan,GeorgiaandTurkeyand
reachingEUmarketsinGreeceandItaly,andincludingoneormoreofthefollowingPCIs:
Gas pipeline to the EU from Turkmenistan and Azerbaijan, via Georgia and Turkey,
currently known as the combination of TransCaspian Gas Pipeline (TCP),
Expansion of the SouthCaucasus Pipeline (SCP(F)X) and Trans Anatolia Natural
GasPipeline(TANAP);
GaspipelinefromGreecetoItalyviaAlbaniaandtheAdriaticSea,knownasTrans
AdriaticPipeline(TAP);
GaspipelinefromGreecetoItalyPoseidonPipeline".

3.2.Placeandroleinintegrationwithneighbors
According to the Energy Policy of Georgia countrys wealth in existing hydroresources,
corresponding infrastructure and favorable investment climate enable the country to
establish itself as a regional platform for the generation and trading of clean energy. To
achievethisgoal,itisvitaltocontinueworkingonfurtherimprovementoflegalframework
as well as scientificresearch and infrastructure development, to facilitate utilization of
Georgias existing clean energy potential and enable the country to become a regional
platformforcleanenergytrading.
Georgiaholdssignificanthydroelectricpowerpotential,andiffullyutilizedthiscanallowthe
country to export significant quantities of clean electricity to neighboring countries and

10

https://ec.europa.eu/energy/sites/ener/files/documents/5_2%20PCI%20annex.pdf

potentiallytotheEuropeanUnion.However,duetotheseasonalityofhydropoweroutput
makesitdependentonRussiaforelectricityimportsinwintermonths11.
SinceFebruary2016,StateElectricSystemofGeorgia(GSE)begantransit12ofelectricpower
from Azerbaijan to Turkey. The transit of electricity is carried out through power
transmissionlineGardabani.

3.3.RecommendationsfornationalandEUauthorities
1. Development of emergency action plans and safeguards against interruption and
damage of critical energy infrastructure should become the major concern of the
government. Various measures including creation of strategic reserves and
information and experience exchange, early warning mechanisms, emergency
measuresshouldbedeveloped.
2. Georgia should accelerate the cooperation with EU, United States and neighboring
countries to improve the protection and safety of energy infrastructure against
possible acts of physical and cyber terrorism; intensifying the information and
experienceexchangeincludingthatinNATOformat(itcanbeNATOEnergySecurity
CenterofExcellence)canbeanimportantstepinthisdirection.
3. Georgia needs to develop internal energy resources, create the gas storage facility
and oil security reserves, as well as develop Energy Efficiency policies, diversify
furtherenergysuppliesandseekthewaysformorepoliticalstabilityintheregion.
4. Promote further development of internal energy infrastructure and strategic cross
border connections; Strengthen the activities in support of regional energy market
development;
5. EUshouldstrengthenitsroleinthedevelopmentofSoutherngasCorridorprojects
by promoting and organizing high level meetings and conferences with partner
countries.
6. Developmentandpromotionofclimatesupportmechanismsforcrossbordertrade
withrenewableenergy

11

Share of imported electricity from Russia constitutes about 15% in winter month consumption (ESCO 2014
Power Balance).
12
http://esco.ge/index.php?article_id=208&clang=0

4.Energyefficiencycontributingtomoderationofdemand
4.1.Situationwithenergyefficiencyonlegislativelevelandpracticalachievementsin
comparisonwiththeEUresultsby2015

The Main Directions of Energy policy of Georgia include develop and implement an
integrated approach to energy efficiency. According to the document, Adequate DSM
(demandsidemanagement)measuresforenergygeneration,transmissiondistributionand
consumption as well as energy efficiency programs, play an important role in optimizing
countrys energy consumption dynamics. To facilitate the DSM, corresponding legislative
framework needs to be created; activities oriented on development and establishment of
energyefficienttechnologiesandequipmentmustbeplannedandimplemented;forenergy
producers and consumers incentivizing regulation must be created and established for
realizationofenergyefficiencyprograms.13
Georgia does not have a law on energy efficiency. The Law on Electricity and Natural Gas
referstopromotingenergyefficiency,butdoesnotprovideanyspecificguidanceorrules.
Accordingtotheclause3ofthearticle1thepurposesofthelawareto:
C) Promote growth of efficiency in the areas of electricity generation, transmission,
dispatch, distribution, import, export and consumption, as well as in the areas of
naturalgassupply,transportation,distributionandconsumption.
As an Energy Community member Georgia is required to follow the EU energy efficiency
relatedlegislation:
1. Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and
2010/30/EUandrepealingDirectives2004/8/ECand2006/32/EC;
2. Directive 2010/31/EU provides the legal framework for setting minimum energy
performancerequirementsfornewandexistingbuildings.
3. Directive2010/30/EUandthecorrespondingimplementinglegislationestablishthe
legal framework for labelling and consumer information regarding energy
consumptionforenergyrelatedproducts
As a member of Energy Community Georgia has to transpose these requirements and
standardsintoitsnationallegislation.
From2015,withthesupportofEBRD,theMinistryofEnergyhasstartedpreparationforthe
firstNationalEnergyEfficiencyActionPlanofGeorgia.TheNEEAPwillidentifysignificantEE
improvementmeasuresandexpectedenergysavingsinallsectors,takingintoaccountthe
countryspotentialandnationalEEtargets,andaimingforhighEEeconomicperformance.
TheNEEAPwillbesubmittedinOctober2016.

13

http://bit.ly/2f0eRLw

4.2.WheretheEUcouldsupportenhancingenergyefficiency?
The draft of the First NEEAP identifies significant energy efficient improvement measures
andexpectedenergysavingsaswellasexpectedsourcesoffinancing(centralbudget,other
sources), but the real financial sources for implementation of the measures are not
committedyet.
EU could support Georgia in development of Energy Efficiency law; providing technical
support;andTechnologytransfer.

4.3.Nationalchallengesandwaystosolvethemrecommendations
A basic impediment to energy eciency in Georgia is the lack of understanding of its
importancebythegovernment,whichisanexceptionintheregionandamongmoreorless
developed countries. Due to the lack of state vision of energy eciency, it is becoming
impossible to get related economic, energy, environmental, social, technological and
politicalbenefitsofenergyeciency.

It is important for the government to develop laws, eective institutions, financial

mechanisms,actionplananditsmonitoringsystem;assuresafreemarketenvironmentto
sustain energy eciency. Firstly, the government shall develop energy eciency national
policy to define a common framework for all the above systems. Eective utilization of
current and future donor projects and international assistance, which can be picked up
throughGreenClimateFundisreallyimportantinthisrespect.

Trainingsandothereducationalactivitiesforenergyauditors,managers,constructionsector
representatives and service providers would also be supportive of the advancement of
these processes. Information campaigns for awareness raising on energy ecient
technologiesandenergysavingarrangementsarenecessary,becauseintroductionofenergy
eciencyimproveslivingstandardsandcontributestoeconomicdevelopmentandcreates
thesecureenvironment.

Buildings: Buildings consume about 30% of all energy (1415 TWh) in Georgia which is
mostly imported. Typically, the heating energy requirement of old buildings is lower than
thatofnewerbuildingsbecausetheyareunderheatedorleftpartlywithoutheating.New
buildingspecificenergyuseishigherduetopoorthermalpropertiesofexteriorwallsand
highshareofwindowsinbuildingenvelope.TheoppositeisthecaseinEuropeancountries,
where energy efficiency of new buildings is significantly better than it is in older building
stock.
The main barriers to implementing energyefficient residential building construction and
building stock upgrading are: 1) lack of energy efficiency legislation for buildings; 2)
availability of maintenance and renovation services; 3) issues with access to finance; 4)
widespreadunawarenessamongstakeholdersandlongpaybackperiodsofmeasuresand5)
unclearhomeownersassociationlegislation.
Inenergyefficiencylegislation,thefirstactionistosettherequirementsfornewresidential
buildingconstruction.Intermsofrenovations,thiscanbedoneonastepbystepbasis.It
shouldbenotedimprovedenergyefficiencyforexistingstockappliesonlyifthebuildingis
10

renovated anyway, thus, the extra cost is only the additional energy efficiency
improvements
Recommendations:
Recommendation 1: Enact technical requirements concerning the energy efficiency of new
buildings, repair of existing buildings, ecofriendly products and renewable energy use.
LegislationshouldapplyEnergyCommunityprinciplestakinglocalconditionsintoaccount.
Recommendation 2: Support for the development of the management and maintenance
market,frombothsupplyanddemandperspectives.
Recommendation 3: Cofinancing schemes and affordable bank loans for energy efficiency
upgradesshouldbemadeavailabletoresidentsandtheirassociations.
Recommendation4:Homeownersassociationlegislationshouldbereformedtoencourage
apartmentownerstoactcollaborativelyandtakecareofbuildingmaintenance,makeand
executedecisions,andpaytheirshareofthemaintenancecostsandtheloanstakenoutfor
repairs.

5.Decarbonizingtheeconomy
5.1.SituationinthecountrywithregardtoParisagreementobligations,nationalplans
toachieve,challenges
GeorgiaisanonannexIcountrytotheUnitedNationsFrameworkConventiononClimate
Change. However, in 2010 Georgia acceded to the Copenhagen Accord and declared that
Georgiawilltakestepstoachieveameasurable,reportableandverifiabledeviationfrom
the baseline scenario supported and enabled by finance, technology and capacity
building14.InSeptember,2015GeorgiahassubmitteditsIntendedNationallyDetermined
Contribution(INDC)totheUNFCCC.
AccordingtotheINDC,GeorgiaplanstounconditionallyreduceitsGHGemissionsby15%
below the Business as Usual scenario (BAU) by 2030 and this 15% can be increased up to
25%ifthecountryhasanaccesstolowcostfinancialresourcesandtechnology.Ministerof
Environment and Natural Resources Protection of Georgia signed the agreement in April,
2016inNewYork15,USA.Currently,GeorgiaworksonthefollowupofParisAgreement,to
initiatetheprocessthatwillbringtotheratificationoftheagreement,whichwillgivethe
country a possibility to implement mechanisms under the new agreement as well as to
developandsubmitby2020moreambitiousNDCthanitsalreadysubmittedINDC.

14
15

First Biennial Update Report of Georgia, 2016

www.moe.gov.ge

11


5.2.Nationaleconomicprogramsintermsofdecarbonization(wherestayseachof
countries)
Thereareseveralongoingmitigationpolicies,programsandprojectsinGeorgia:
The United States Agency for International Development (USAID) supports
preparation of Low Emission Development Strategy (LEDS) of Georgia, which was
launchedinMay2013andwillbefinalizedbyJune2017.
Georgia is actively involved in preparation and implementation of projects for
NationallyAppropriateMitigationAction(NAMA).Intheframeworkofthisinitiative
fourNAMAsareimplementedorareunderpreparation.
The EUGeorgia association agreement explicitly mentions the cooperation of the
Ministry of Environment and Natural Resources Protection on the preparation of
LEDS, as well as Nationally Appropriate Mitigation Actions (NAMAs), and the
measures to promote technology transfer on the basis of technology needs
assessment.
ThegovernmentofGermanyworksintensivelywithGeorgiatosetupasystemfor
MRV through its Partnership Programme led by the Society for International
CollaborationofGermanyGiZ.
In 2008, the EU launched a Covenant of Mayors (COM) process in which signatory
cities pledge to decrease emissions by 20% from their territory by 2020. By April
2016thirteenCitiesofGeorgiahavesignedtheinitiative.
From its beginning Georgia has been involved in Clean Development Mechanism
(CDM)andhasregisteredsevenprojects.But,duetotheuncertaintyofperspectives
ofCDMglobally,Georgiasactivitiesinthisdirectionhaveweakened.

12

5.3.Practicalstepstoproceedtowardsdecarbonization
Low Emission Development Strategy (LEDS) defines following steps for short term 2017
2020:

MembershipinEnergyCommunity;
EnergyMarketliberalization;
AdoptionofEnergyEfficiencyLaw;
AdoptionofNationalEnergyEfficiencyActionPlan,ImplementationandMonitoring;
AdoptionofRenewableEnergyActionPlan,ImplementationandMonitoring;
Improvethequalityofenergystatistics,anduseenergyefficiencyindicators;

LongTerm(20202030):
Improvinglegislationforpromotingrenewableenergyuse;
Implementingenergyefficiencyandrenewableenergyactionplans;
Improvingenergytariffpolicy;
Realizingelectricityandgasnetworkdevelopmentplans.

By April 2016 thirteen Georgia Cities have joined the European Union initiative entitled
CovenantofMayors(CoM)andcommittedtoreduceGHGemissionswithintheirterritories
by increasing energy efficiency and the use of renewable energy sources. These cities are
requested to prepare and submit for acceptance to the CoM Secretariat their Sustainable
EnergyActionPlans(SEAP).EightcitiesalreadysubmittedSEAPs,andfiveSEAPshavebeen
accepted.ThelistoftheCoMsignatorycitiesofGeorgia,theirtargetsandstatusofSEAPs
arepresentedinTablebelow
Table:CoMSIGNATORYCITIESOFGEORGIA,THEIRTARGETSANDSTATUSOFSEAPS
Signatories

Population

Adhesion

SEAPStatus

Akhaltsikhe,GE
Batumi,GE
Bolnisi,GE
Gori,GE
Kazbegi,GE
Kutaisi,GE
Mtskheta,GE
Rustavi,GE
Tbilisi,GE
Telavi,GE
TelaviCityHall,
GE
Tianeti,GE
Zugdidi,GE

19,200
170,000
76,600
50,400
4,900
196,600
7,800
120,800
1,100,000
70,900

31Oct2014
15Jul2011
16Mar2015
13Jul2012
27Feb2015
15Jul2011
11May2015
2May2011
30Mar2010
30Jan2015

Submitted
Accepted

Accepted

Accepted

Accepted
Accepted
Submitted

21,800

24Mar2014

12,900
76,600

13Jan2015
1Aug2013

Accepted

13

CO2
reduction
target
21%
22%

27%

23%

24%
25%
20%

24%

6.Research,InnovationandCompetitiveness

National research and innovation capacity is represented by the following entities

subordinatedtotheMinistryofEducationandScienceofGeorgia:
GeorgianNationalAcademyofScience
7 Higher Education Institutions that have research institutes as structural
units
InrecentyearsGeorgiangovernmentstrengthenedsupporttoresearchandinnovation.The
graphbelowshowsgovernmentexpendituresonscienceandresearch.Ascanbeseenthe
expenditures increased dramatically in 2015 and share in total expenditures has grown
twice.

The government established two entities with aim to support national research and
innovationandenhanceGeorgiasresearchcooperationwithEUinstitutions.
Shota Rustaveli National Science foundation was established in 2010 to support
scientificresearchdevelopmentinGeorgiaandintegrationofGeorgianresearchers
ininternationalresearcharea;
Georgias Innovation and Technology Agency (GITA) was established in 2014 with
aim to enhance commercialization of research results and promote innovative
entrepreneurship.

6.1.Nationalpotentialinenergysectorresearch(institutions,resultsinrecentyears)
In 2013, with great support of think tank World Experience for Georgia Energy and
Sustainable Development Institute was established at Ilia State University to conduct
research in the field of energy and sustainability. However, the institute is a young
organizationsofarwithlimitedhumanandfinancialresources.
14

6.2.ExistingandpossiblecooperationwiththeEUinstitutions
On29April2016GeorgiajoinedHorizon2020andnowcanparticipateintheprogramwith
the same rights as member states. Participation in Horizon 2020 can bring number of
opportunitiesforGeorgiasuchas:
Fundingforexcellentscience
Focusoninnovation
Worldclassresearchinfrastructures
Accesstonewnetworkandalliances
CollaboratewiththebestEuropeanuniversities
CollaboratewithEuropeanresearchteam
Georgian institutions participated in 353 projects in total in all EU framework programs.
MainlytheactiontypeswereCoordinationandSupportandScientificResearch.InHorizon
2020Georgiaparticipatesonlyin9projectoutofwhichtherearentanydevotedtoenergy
sector research. Overall Georgias participation rate in EU framework programs is much
lowerthanofmajorityofEUandevenEaPcountries.TherearentanyHorizon2020projects
sofarwhereGeorgiaparticipatesascoordinator.

6.3.Bestpracticesofcooperation,recommendationstoenhance(Horizon2020,etc.)
GeorgiasparticipationinEUframeworkprogramHorizon2020isquitemoderate.
AsanewcomerGeorgiafacesthefollowingchallenges:
Very competitive environment. Competition in Horizon 2020 is very high and
requiresparticipantstowritehighqualityproposals.Preparationofproposalistime
consumingandrequiresgoodknowledgeofprogramsprioritiesandspecificities.For
Georgian institutions/organizations with lack of experience the competition with
experiencedEUinstitutionsisevenmoredifficult.
Establishedconsortiaandcommunity.ForsuccessfulparticipationinHorizon2020it
isveryimportanttobepartofarightconsortium.However,foranewcomerthisis
notaneasytasksinceexperiencedinstitutionspreferworkingwithexperiencedones
andwiththosethattheysuccessfullyworkedbefore.Thisisquiteclosedcommunity
and Georgian participants should do their best to increase their visibility and
internationalcontacts.
Lack of experience in participation in EU framework programs. As a consequence
Georgianparticipantsarenotverywellfamiliarwithprogramspriorities,application
procedures specificities, budgeting issues and others which reduce chances for
success.

15

 Complex procedures. The procedures were much simplified in Horizon 2020

compared to previous framework programs, however, still they remain quite
complexevenforexperiencedparticipants.
Lack of fundraisers in research institutions. Not all institutions in Georgia have
sufficient fundraising division and not all divisions have a separate staff member/s
whowilltakecareofHorizon2020opportunitiesforparticipation.
Othercountryspecificchallengeslike

Geographical location. One of the easiest ways of finding partners is

participation in Brokerage events, international conferences, etc, which are
usually held in EU countries. Costs for participation are higher for Georgian
participants(duetoVisaexpenditures,travelandaccommodationcosts,etc.)
and is supposed to be covered from institutions budget or by personal
means.Therefore,participationrateofGeorgianinstitutionsinsimilarevents
isverylow.

NCP16 network is decentralized. All NCPs are fulfilling their obligations on a

voluntary basis. They are employed by various organizations and their NCP
activities are not financed unless they are part of some particular project.
EvenparticipationinBrokerageevents(whichisveryimportantforeffective
realizationofNCPfunctions)isnotfinancedforNCPsandshouldbecovered
bytheNCPhimself.

Inordertoenhancecooperationinresearchandinnovationthereisneedforacomplexof
measuresthatwilladdresschallengesstatedabove.
Qualityofnationalresearchshouldbeincreased.Measuresshouldbedevelopedto
reduce brain drain and to retain qualified researchers in national institutions.
Investmentsareneededinresearchinfrastructureandfacilities,andhumancapital.
Visibility of national research organizations and individual researchers should be
increased. Additionally, there is need for awareness raising on opportunities that
Horizon 2020 and other EU program may offer. Information days should be
conductedonaregularbasis.Morefrequentworkshopsandtrainingsareneededto
acquaintresearcherswithHorizon2020proceduresandfundingopportunities.
Research institutions should have fundraising division with at least one employee
whowilltakecareofHorizon2020fundingopportunitiesandwillassistresearchers
withpreparationoftheapplications.
NCP network should be more organized. There is need for clearer coordination of
theiractivitiesandsomeadditionalsupport,forinstance,NCPshouldhavesupport
inparticipationinBrokerageeventstogetaccesstopotentialpartnersnetwork.

16

National Contact Point

16


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Conclusions

Georgia remains committed to its pursuit of democratic development and European

integration. To enhance its relationship with the EU, Georgia signed the Association
Agreement (AA) with a Deep and Comprehensive Free Trade Area in June 2014, including
cooperationinenergyrelatedissues.InOctober14,2016Georgiaalsobecameamemberof
theEnergyCommunityandtookresponsibilitytoimplementreformsinenergysector.
Large scale infrastructure rehabilitation projects, institutional and legislative reforms have
been implemented in Georgia over the past few years, led to modernization of Georgian
energysectorasaresultofwhichsupplyofenergyresourceshavebeendiversifiedandlocal
resourceshavebeendevelopedbutagainstthegrowthindemandanddominanceofhydro
energy resources dependent in climatic conditions, it is difficult to meet countrys energy
needswithonlylocalresources.
Georgian energy sector may face challenges, in providing uninterrupted energy supply to
the households and economic sector, which can be caused by difficulty of guaranteed
provision of imported resource due to unstable political situation in the region, climate
condition,infrastructurebreakdownornaturaldisastersetc.
International Transit projects and cooperation is vitally important for secure, sustainable
and effective energy sector development. Considering all the above, Georgia should
acceleratethecooperationwiththeEU,UnitedStatesandneighboringcountriestoimprove
theprotectionandsafetyofenergyinfrastructureagainstpossibleactsofphysicalandcyber
terrorism; intensifying the information and experience exchange including that in NATO
format can be an important step in this direction, Energy Union incentive with all its 6
directions,willplayanimportantroleinthisregard.

17