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ISET Economist Blog

A blog about economics in the South Caucasus.
Nov
11

Armenia Generates Windfall Profits for Georgia

When Armenia entered the Russia-dominated customs union in 2013, fear spread among the Georgian public and policy makers. It looked as if Georgia would be economically squeezed in between Russia and Armenia, the latter being one of Russia’s staunchest allies in the region and, given its geopolitical dependency on Russia, sometimes seen as a little more than a Russian agent. Being wary about Russia’s economic influence in the region, it was straightforward for Georgia to respond to this development by upgrading economic ties with our Western allies. There...
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Feb
28

Access to Electricity: Is Off-the-Grid an Option?

Assuring access to modern energy services for the whole population is a crucial step to improve human well-being and stimulate economic and social development. The International Energy Agency (IEA) has identified the lack of access to modern energy services as one of the main obstacles to overcome in order to achieve the UN Millennium Development Goals. In its 2011 World Energy Outlook, the IEA argued forcefully about the need to find and mobilize the resources required to extend access to modern energy services to the poor around the world. Transition c...
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Nov
29

Clean Air is Lifetime

Lifetime is one of the most precious assets. People are paying huge amounts of money to extend their lifespans, sometimes for gaining only weeks or months. And imprisonment and death penalty are so widely applied punishments throughout all cultures and ages because people are scared off by the prospect of losing lifetime. As lifetime is such a valuable good, it is surprising that it is largely ignored in the policy debate. According to the World Populations Prospects report, published in 2010 by the United Nations, Georgians have a life expectancy at bir...
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Oct
11

Electricity Generation in Georgia II: Blowing Wind into the System

In the first part of our article we pointed out that electricity generation by hydropower is subject to strong seasonal variations. We argued that the seasonality of hydropower reduces the profitability of new plants, as they deliver the highest output in the time of the year when electricity is relatively cheap anyway, while they produce rather little when electricity is expensive. There are other problems why the potential of additional hydro power plants to solve Georgia’s energy problem are limited. Chart 4 shows a simple projection for 2020: The pro...
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Oct
04

Electricity Generation in Georgia I: The Seasonality Problem

In our two-part article we discuss how combining wind and hydropower can help the Republic of Georgia to achieve energy independence and become a net energy exporter. OVERVIEW Due to the geomorphological characteristics of its territory and to its geographical location, the Republic of Georgia is rich in hydro resources. According to the Georgian Ministry of Energy and Natural Resources, so far Georgia has been exploiting only about 20% of its hydro resource potential. Since 2006 the Georgian government has been planning to utilize these resources to not...
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