ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
May
08

No Price Caps in the Electricity Wholesale Market!

This article is about a highly technical matter. To avoid losing all our readers in the very beginning, let us start with a famous doctrine by Montesquieu: Les lois inutiles affaiblissent les lois nécessaires. This principle, literally meaning “useless laws weaken the necessary laws”, should always be kept in mind by lawmakers and politicians. If a regulation is not beneficial, then it is almost surely beneficial to get rid of the regulation. Some great Georgians endorsed this principle, like Kakha Bendukidze, who is widely praised for having erased many...
Rate this blog entry:
Recent Comments
Eric Livny
The article raises many factual questions:What is the level of these price caps and how do it compare to the price electricity gen... Read More
Sunday, 08 May 2016 8:08 AM
Florian Biermann
Regarding your first two questions:(1) As we say in the article, the capacity to export is for technical reasons very low. Therefo... Read More
Sunday, 08 May 2016 8:08 AM
Eric Livny
Florian, The (potential) export price could be a good benchmark to assess the extent to which the cap is binding, reasonable, etc.... Read More
Sunday, 08 May 2016 9:09 AM
Continue reading
2415
4 Comments
Write a Comment
Jun
29

Why Armenia Is Not (Yet) Ukraine?

  Yerevan is presently rife with protest. Dubbed “Electric Yerevan,” the protests are aptly named considering that they began as a result of Armenia’s government succumbing to demands by the country’s electricity distribution monopoly (Electric Network of Armenia (ENA)) to raise regulated tariffs by 16.7% as of 1 August, 2015. ENA is owned by Inter RAO UES, a Russian energy giant, giving rise to suggestions that Armenian officials are effectively serving Russian interests. Yet, the hike in electricity prices, which the government had initially resis...
Rate this blog entry:
Recent Comments
Guest — David Lee
I think that there is a danger of viewing all political and economic problems in the wider region, let use the Eastern Partnership... Read More
Monday, 29 June 2015 8:08 AM
Guest — Mikayel Badalyan
I would have deleted the word "yet" from the title and here is why:Let's measure the prices in USD!!!In Ukraine the gas price incr... Read More
Monday, 29 June 2015 10:10 AM
Guest — Eric Livny
Thanks, Michael, for your "Armenian insider" viewpoint. Just for me to understand better, you are saying that Armenia's electricit... Read More
Tuesday, 30 June 2015 9:09 AM
Continue reading
4235
9 Comments
Write a Comment
Apr
13

The Complexities Facing the Competition Authority

Economists disagree whether it was a good decision to reestablish the Georgian competition authority. When some years ago it was removed, the underlying logic was that a non-existing authority cannot be corrupt, and, more importantly, cannot harm the economy through misguided decisions. Assuming that corruption will not be a problem for the competition authority, neither now nor in the future, regulating markets is still a highly delicate issue which yields many possibilities to go wrong. WHAT IS THE RELEVANT MARKET? One of the central issues that have t...
Rate this blog entry:
Recent Comments
Guest — M
Actually, I had the pleasure of talking to a few people in the competition agency. They have a good understanding of the markets t... Read More
Tuesday, 14 April 2015 11:11 PM
Guest — megiddo02
Hi M, I agree that the sentence sounds somewhat condescending. You may be right that this advice is unnecessary -- I do not know t... Read More
Wednesday, 15 April 2015 3:03 PM
Continue reading
3609
2 Comments
Write a Comment
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...
Tags:
Rate this blog entry:
Recent Comments
Guest — Helene Ryding
Off the grid electricity (whether hydro or solar) has one drawback compared with on the grid electricity: there is no electricity... Read More
Saturday, 01 March 2014 12:12 AM
Guest — Irakli
So, with small subsidy there might a new business opportunity... and not temporary. The main point missing is the discussion of po... Read More
Tuesday, 04 March 2014 8:08 PM
Guest — Helene Ryding
In all my experience implementing change in post-socialist countries, I have never known a Ministry of Energy really take any inte... Read More
Thursday, 06 March 2014 7:07 PM
Continue reading
3473
8 Comments
Write a Comment
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...
Tags:
Rate this blog entry:
Continue reading
3303
0 Comments
Write a Comment
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...
Rate this blog entry:
Recent comment in this post
Guest — blintu
Waiting for the second part
Friday, 04 October 2013 5:05 PM
Continue reading
4106
1 Comment
Write a Comment

Our Partners