The legal framework of renewable energy
Renewable energy in Georgia is regulated by the law on energy, which begins with the state energy policy and continues through the tasks of the commission and the promotion of generation. The law defines renewable energy sources as renewable non-fossil sources — wind, solar, geothermal energy, waves, sea tides, hydropower, biomass, gas obtained from waste processing, sewage treatment plant gas and biogas. Accordingly, when planning a renewable project, all fundamental questions — support mechanisms, integration with the network and public service obligations — must be read from this single framework.
In practical terms this framework appears as three levels. The first is strategic — the state energy policy and its national plan, where the goals of renewable energy are fixed. The second is regulatory — the tasks of the commission, the rules and methodologies it establishes. The third is contractual — the support mechanisms defined by legislative and government acts. The success of a renewable project requires simultaneous assessment at all three levels.
State energy policy
The ministry, in cooperation with the government, the commission and other parties, develops the state energy policy for a period of at least 10 years and, after its approval and publication by the Parliament, ensures its implementation. Among other matters, this policy must provide for measures aimed at the use of renewable energy sources for the generation and consumption of electricity from such sources, as well as any encouraging measure or support mechanism; also measures aimed at encouraging the combined generation of electricity and heat, together with measures for safe and reliable supply, physical and financial accessibility, and the gradual overcoming of energy poverty. The policy must include the national integrated energy and climate plan, directed towards the reduction of greenhouse gas emissions, approved as an integral part of the energy policy document or as its annex; the national plan is prepared and submitted to the Secretariat of the Energy Community under the Ministerial Council’s recommendation.
Public service obligations
Article 9 of the law governs public service. Deriving from the general economic interest — for the purpose of ensuring security, continuity, quality and price of supply, environmental protection, energy efficiency, generation of energy from renewable sources and climate protection — an energy enterprise may be charged with a public service obligation. This obligation is imposed by the government after consultation with the competent authorities, the commission and the Secretariat of the Energy Community; it is a temporary measure subject to regular review. Compensation or the granting of any exclusive right must take place in a transparent and non-discriminatory manner, and the benefit granted by the state must not exceed the costs connected with the performance of the obligation. The commission is authorized to set the tariff for performing this obligation.
The framework of public service obligations does not extend to transmission and distribution: these activities are already carried out as a public service by the corresponding system operators. For a generation object the obligation arises only in cases of defined necessity, with consultations and proportionality.
The commission's tasks in the sphere of renewable energy
Article 28 of the law establishes the tasks of the commission, and among them the facilitation of the integration into the transmission and distribution networks of large- and small-scale generation of electricity and natural gas from renewable sources and of devices connected to distribution networks appears directly. So does the facilitation of access to the network of new generation capacities — in particular, the removal of obstacles that may hinder the access to the network of new market participants and of energy obtained from renewable sources. This norm gives renewable projects a legal guarantee of support for entering the market. The tasks of the commission also include energy efficiency and consumer protection — the same single legal environment.
Promotion of electricity generation
Under Article 37 of the law, the promotion of generation is regulated transparently and non-discriminatorily, taking into account economic expediency, the minimal costs of the final consumer and the criteria of influence on the electricity balance. Generation from renewable sources and high-efficiency cogeneration may be encouraged through mechanisms defined by legislative acts or normative acts of the government, in order to reach the level established for Georgia by the legislation of the Energy Community. Such rules must include, together with the mechanisms, the rights and duties of electricity enterprises, the conditions of encouraged generation and the related regulatory requirements. Every encouraging measure is assessed in compliance with the requirements of the law and, where necessary, substantiated in accordance with the rules on competition and state aid.
Frequently Asked Questions
Below we answer the questions most frequently asked about renewable energy projects.
For what period is the state energy policy developed?
The ministry develops it, in cooperation with the government, the commission and other parties, for a period of at least 10 years; after parliamentary approval and publication it ensures its implementation.
Does the public service obligation extend to transmission and distribution?
No — transmission and distribution of electricity or natural gas are already carried out as a public service by the corresponding system operators, so this article does not apply to them.
Can such an obligation be imposed on a renewable project?
Yes — production from renewable sources is among the enumerated aims; the obligation is imposed after consultation, is temporary and must be proportional.
How is generation from renewable sources encouraged?
Through encouragement and support mechanisms defined by rules established in legislative or government normative acts, to reach the level established for Georgia by Energy Community legislation.
How We Help on Legal.ge
Our team assists in the legal classification of a renewable project, in assessing access to support mechanisms, in network integration and access procedures, and in matters connected with public service obligations. Every recommendation rests on the above-mentioned articles of the law on energy. Contact us for a consultation.