Georgian Gov’t to offer fixed tariffs for power plant projects without auctions

Individuals or entities meeting predetermined technical and economic criteria will be able to secure a fixed tariff for the development of power plant projects in Georgia through direct negotiations with the state without having to go through an auction, the Ministry of Economy said on Wednesday.

The body added the fixed tariffs, determined by the Government, would be available for a 15-year period, based on the price difference agreement with the state.

The fixed median rates for various types of power plants have been set as follows:

• Hydroelectric power stations (on-flow): $0.065 per kWh
• Wind power plants: $0.006
• Solar power plants: $0.056

The move comes as part of updated conditions of a state support scheme set to take effect from next month, the Ministry said.

Jubo Turashvili, the Head of the Energy Policy and Investment Department of the Ministry of Economy of Georgia said the tariffs were determined as a result of the second capacity auction, where a “high activity” of investors was recorded, and the total capacity of submitted applications was “several times higher” than the announced capacity.

Accordingly, the median rates established in the same auction were defined as fixed rates. Each interested individual will have solid support from the Government for 15 years on the basis of the price difference agreement”, he said.

Turashvili added the initiative was a step forward in supporting the sector and attracting both local and foreign direct investments.

The Ministry said it would “soon” announce direct selection of beneficiaries for the support scheme, focusing on the production and use of electricity from renewable sources in hydroelectric, wind and solar power plants.