On December 16, PMC Research conducted a presentation and public discussion on the findings of its research entitled “Electricity Market Prices and Georgia’s Energy Security,” which was aimed at drawing attention to the issue of electricity prices, their importance in energy security, and electricity supply security.
Prices are an important component of electricity supply security and, in most cases, they reflect tendencies in many other aspects of security of electricity supply. The research paper emphasized the role and importance of electricity market prices in Georgia’s energy security, analyzing the current structure of the wholesale electricity market in Georgia, identifying different prices, payment schemes, and some fundamental issues that are inherent in the structure of the ongoing wholesale electricity market in Georgia, and highlighting some challenges that need resolving to strengthen the security of supply in the electricity market.
“Energy security is an important component of national security that affects the economic, social, and security environment of a country,” said Giorgi Mukhigulishvili, Lead Researcher at World Experience for Georgia, adding that “Transparency of energy prices and development of competition are critical factors in the ongoing energy reform process in Georgia.”
During the presentation, Levan Pavlenishvili, Associate Consultant at PMCG, presented the key findings of the research and discussed important aspects of electricity supply security, the role of prices in the latter, the need for data transparency for different components of wholesale market prices, and the need to develop an ancillary service market to generate price incentives.
“Prices are important for everyone, as much for businesses as for the end-users. It is important that the balance between investment attractiveness and availability for end-users is reasonably maintained. This is usually provided by a market in which the interests of both parties are balanced and protected,” said Levan Vepkhvadze, Executive Director of the Business Association of Georgia.
The study was conducted by PMC Research, under the project “Public Policy Discourse and Dialogue Platform,” with the support of the Konrad Adenauer Foundation.