Due to the geomorphological characteristics of its territory and 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 exploited only about 20% of its hydro resource potential. Since 2006 the Georgian government has been planning to utilize these resources to not only meet domestic demand, substituting hydro fully for electricity imports and thermal power plant (TPP) generation (burning imported gas), but also to turn Georgia into a regional provider of electricity.
Initially, thanks to the rehabilitation of existing hydropower plants (HPPs) and to improvements in the regulatory environment of the Georgian electricity sector realized in the wake of the Rose Revolution, this program seemed relatively easy to achieve. The generation of cheap hydropower did increase and partially substituted for thermal energy generation and electricity imports. After a steady increase from 2007, finally, in 2010, the total annual hydropower generation (9 375 GWh) in Georgia exceeded the country’s total electricity consumption (8 441 GWh). Parallel to this the construction of new transmission lines started to increase the export capacity to Turkey and a number of Memoranda of Understanding were signed with investors in relation to the realization of 40 new HPP projects.