Looking at consumption and generation trends, it is evident that since August 2018 consumption typically exceeded generation. The negative generation-consumption gap also remained throughout April, amounting to 45 mln. kWh, with a total power generation of 966 mln. kWh and consumption of 1,012 mln. kWh. Yet why has the generation-consumption gap remained negative since August 2018? Should we also expect the negative gap to persist over the following months?

Our dependence on smartphones can hardly be described as anything other than addictive. We invariably use them to document trips and thus to have the world at our fingertips. Though, these precious little gadgets have a dark history that we, as consumers, unconsciously support. Unfortunately, we will not be able to discuss in detail all the negative impacts within the supply chain of smartphones.

In September 2016, the average price of cooking one Imeretian khachapuri stood at 3.43 GEL. Compared to the previous month (August 2016) the Khachapuri Index gained 8.6%. The upward trend in Index at this time of the year is mostly related to the seasonal increase in the price of cheese (due to dwindling supply of fresh milk). While going up in monthly terms, the Index actually dropped 0.8% compared to the same time of last year (y/y). As shown in the chart, the main contributors to Khachapuri Index annual deflation were eggs (-7%) and cheese (-3%). All other ingredients increased in price: milk (1%), flour (2%), yeast (9%), and butter (17%). Interestingly, prices fell y/y for locally produced goods (eggs and cheese); prices went up for goods that are imported (yeast and butter) or use imported intermediate inputs in their production (flour and milk).

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.

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 consumes as much electricity as Tbilisi, something we have mentioned in one of our previous articles.