ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

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May
03

What Can Be Learned from the Experiences of the Khadori 3 HPP Project?

News of the conflicts between the local population and the construction company involved in the construction of a small HPP in the Pankisi valley (Khadori 3) has recently made it into the headlines. Khadori is a small HPP with an installed capacity of 5.4 MW and an estimated annual generation of 27.5 mln. kWh. Construction of the Khadori 3 HPP started on 21 April, however, the local population resisted the project, and consequently its company involved law enforcement officials to ensure its secure implementation. This further increased tensions between ...
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Apr
19

Is Georgia on the Right Path to Reduce Massive Plastic Bag Usage?

  In October 2018, a new law came into force which prohibits producing, importing, and selling single-use bags thinner than 15 microns.1 The second wave of this reform was introduced in April 2019, and expanded to all forms of plastic bags. It is important to ask, why was it necessary to impose a restriction on plastic bags? What are the implications and the expected consequences of the ban? Plastic shopping bags are produced at a rate of one trillion a year and distributed at store checkout counters across the globe. More than two thirds created ar...
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Mar
29

Net-Metering: A Realistic Green Solution to the Generation-Consumption Deficit?

In February 2019, Georgian power plants generated 939 million kWh of electricity, which compared to the previous year represents a 0.5% increase in total generation. On the demand side, consumption amounted to 1,037 mln. kWh, a 2% decrease on an annual basis. Although the negative gap between generation and consumption decreased by 22% (from -126 to -98 mln. kWh), compared to the corresponding month of the previous year, it remained substantial. It is worth highlighting, once again, that this negative gap does not wholly reveal the extent of dependence o...
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Mar
04

Enguri and Vardnili Hydropower Plants (HPPs) and Abkhazian Demand. A Difficult (and Costly) Puzzle for Georgia

Winter has always been a problem for the Georgian electricity system. Even though Georgia has plenty of hydropower, during this season several HPPs — seasonal and small — either stop or substantially reduce electricity generation. In this season, a significant share of hydropower generation comes from two large-scale state-owned pumped-storage HPPs: Enguri and Vardnili. However, exactly when the generation-consumption gap is the largest, most of the electricity produced is used to satisfy the consumption of the Abkhazia region, which on a yearly basis co...
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Feb
25

Water Losses and Operational Efficiency in the Water Sector: Observations and Proposed Policy Interventions

The large and chronic water losses characterizing distribution networks constitute one of the major challenges faced by Georgian water utilities. The water supply generates approximately 700 million cubic meters of non-revenue water (NRW) each year1, considering just the urban centers. High water loss rates create excessive operational costs for the utilities and result in undesirable operational inefficiency in the water supply sector. This creates obstacles — from a financial point of view — to the achievement of full cost recovery and to the appropria...
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Feb
01

Do We Need to Worry About the Generation Deficit in the Electricity Market? And What Can Be Done About It?

Looking at annual consumption and generation trends, from 2012-2016, it is clear that generation typically exceeded consumption. Consequently, the generation-consumption gap remained positive. However, in 2017 this trend reverted, and the electricity generated by local resources on the Georgian market was no longer enough to supply the local demand. As shown in Figure 1, the gap widened even further in 2018; with the negative gap increasing by 30% (from 344 mln. kWh in 2017 to 447 mln. kWh in 2018). This significant reversal has motivated us to explore ...
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