Trial Run and Complex Testing
For a solar farm to be accepted into operation, Article 36 of the Georgian Law on Energy and Water Supply makes the trial run and/or complex testing of the object a mandatory stage. An enterprise that has built an electricity generation object or reconstructed it — including by increasing its capacity — and connected it to the transmission or distribution network in accordance with the procedure and technical requirements established by Georgian legislation, must apply for the trial run and/or complex testing to the operator of the system to whose network the object is connected, and representatives of the transmission system operator participate in the process. The testing and the consent to acceptance into operation are carried out under the procedure established by the network rules, and unless those rules provide otherwise, the operator must declare its consent or refusal within no more than 90 calendar days from the trial run. During this acceptance period the owner enterprise is not required to hold a generation license, and the purchase and sale of the electricity produced during the period is regulated by the electricity market rules. Once the object has been accepted into operation, generation is allowed only on the basis of a generation license issued in accordance with Chapter V of this law or, in the cases envisaged by the law, on the basis of a document confirming acceptance into operation issued by the authorized organ.
Principles of Generation Support
Under Article 37 of the law, the promotion of electricity generation is regulated transparently and non-discriminatorily, taking into account economic expediency, the minimal costs of the final consumer, and criteria of influence on the electricity balance and the operation of the Georgian electricity system. Generation from renewable energy sources and high-efficiency cogeneration may be encouraged through incentives and support mechanisms defined by legislative acts of Georgia or normative acts of the Government — to reach the level established for Georgia by the relevant legislation of the Energy Community. Those rules must cover the support mechanisms, the rights and obligations of electricity enterprises, the conditions of incentivized generation and the related regulatory requirements, while every incentive or supporting measure must, where necessary, be justified in accordance with the legislation regulating competition and state aid. For a solar developer this framework defines both the boundary of what support is lawfully available and the conditions attached to it.
The Ten-Year Transmission Network Development Plan
Integration of a solar farm into the grid takes place in a planning context: under Article 53 the transmission system operator annually develops or updates, for the next 10 calendar years, the ten-year transmission network development plan, based on existing and forecast supply and demand indicators. The plan contains information on electricity and natural gas demand and supply, on domestic forecast generation and cross-border flows, on the main infrastructure to be built or improved over the next 10 years, on the investments decided and the new investments to be implemented over the next 3 years, on concrete deadlines for investment projects, and — decisive for a solar project — on the integration into the network of new generation objects, including renewable energy sources. The draft plan, after consultations with interested parties, is submitted no later than 1 October of the relevant year to the Ministry and the Commission; the Commission submits its remarks and recommendations to the Ministry within 2 months of receiving the draft, and the Ministry, with the consent of the Government, approves the plan no later than the end of the year. The plan also reflects the target indicators of strategic network development envisaged by state energy policy together with transboundary and local projects, and in developing the plan the operator makes reasonable assumptions about production, supply, consumption and cross-border flows, taking into account the investment plans of neighboring networks.
Enforcement of the Plan and Investment Decisions
Where a planned investment for the following three years is not implemented, except for reasons of independent, insurmountable causes, the Commission, in agreement with the Government, adopts one or several measures: it demands the implementation of the investment from the operator, holds an open tender to select an interested investor, or instructs the operator to increase its own capital and allows independent investors to become shareholders or partners of the operator. Such investors may not be companies engaged in the generation, supply or trading of electricity or natural gas. The value of an investment selected by tender is reimbursed through the tariff for transmission-related service, and the tender conditions may include the operator's consent to financing by third parties or to the construction of assets by third parties, as well as the operator's own construction or operation of the new assets. Projects corresponding to state target indicators cannot be removed from the plan, although their implementation deadlines may be changed where expedient; their costs may be financed fully or partly from the state budget if the Government so decides on the basis of a cost-benefit analysis, and otherwise they are reflected in the regulated tariff. The operator is obliged to make maximum efforts to facilitate investment projects and to provide investors with all necessary information, including on the connection of new devices to the transmission network, and financial arrangements arising from this obligation require the Commission's prior consent.
Third-Party Access to the Transmission System
Article 57 obliges the transmission system operator to ensure, in observance of the requirements of the transmission network rules, non-discriminatory and unrestricted access of users to the transmission system; the fee for access is accounted for and set by the Commission under the relevant methodology. The same service must be offered to different users on equal contractual terms. The law does not prevent the conclusion of long-term contracts, provided they conform to the competition rules established by Georgian and Energy Community legislation. The operator publishes on its website the access procedure, rules and conditions, including the requirements established by the network rules and the fees defined by the Commission, together with the technical and quantitative data needed for access and use of the system, which must be regularly updated. A financial guarantee may be required as a precondition only in the cases envisaged by a legal act of the Commission, and it must be non-discriminatory, transparent, proportionate and must not create an unjustified barrier to market entry. In dispatching generation objects the operator may give priority, under the procedure established by Georgian legislation, to objects producing energy from renewable sources — an additional operational advantage for solar farms. The operator may also have access to the networks of neighboring transmission system operators where this is necessary for performing its functions, including for cross-border transmission of electricity.