Energy Policy Review
The International Energy Agency (IEA) conducts in-depth peer reviews of the energy
policies of its members and non-member countries. This process supports a holistic
approach to energy policy development and encourages the exchange of international
best practices and experiences. This report is the first in-depth review conducted
by the EU4Energy programme (implemented by the IEA and the European Union) in the
2019-2021 cycle. It updates and extends the analysis of energy policies in the countries
of Eastern Europe, Caucasus and Central Asia that the IEA conducted in 2015.
Since the 2015 review, Georgia has made solid progress in improving both the security
and sustainability of its energy supply. The country entered into the EU-Georgia Association
Agreement in 2016 and become a Contracting party of the Energy Community Treaty in
2017. Since then, it has made significant legal and institutional reforms demonstrating
the government’s commitment to align its energy sector with EU regulations for electricity
and gas markets, security of supply, renewable energy, energy efficiency and statistics.
The energy sector has been instrumental in establishing Georgia’s overall economic
policy focused on creating a liberalised environment through minimal state interference,
deregulation, privatisation, reduced and simplified licensing and taxation, and free
trade, earning the country the reputation of a “star reformer”. Taking advantage of
its favourable geographical situation, Georgia plays an important role in the regional
trade of electricity, oil and natural gas.
Nevertheless, Georgia is still confronted with many challenges in its transition to
a more secure, sustainable and affordable energy future. The government recognises
most of them and is considering various measures to address them. There is room for
the further strengthening of the country’s long-term energy strategy, raising institutional
capacity and improving coordination between stakeholders to develop policies based
on solid analysis of supply-demand trends and alternative scenario models. More efforts
could be made to develop effective secondary legislation to accelerate the implementation
of the EU energy acquis, and to gradually phase out implicit subsidies and cross-subsidies
in the electricity and gas sectors. In this report, the IEA provides recommendations
for further improvements of Georgia’s policies to help the country guide the transformation
of its energy sector.
Available from July 31, 2020