Georgia’s wind sector is moving from long-standing potential towards a more practical question: how can the country create a market that delivers constructed and operating projects, rather than an ambitious pipeline on paper?

For Christoph Zipf, Head of Press & Communications at WindEurope, the answer starts with clarity. Investors, manufacturers and developers need to see not only targets, but a practical route from permitting and grid access to auctions, revenue certainty and system integration.

In this written interview, Christoph Zipf outlines the lessons from European experience that may be relevant as Georgia develops its wind market.

From targets to real projects

Targets matter because they make a market visible. But WindEurope’s central point is that targets must be followed by permitting, grid investment, credible auctions and demand for the electricity those projects will produce.

renewables.GE: European experience suggests that announcing wind-capacity targets is easier than creating a market in which projects reliably move from a development pipeline into construction and operation. What distinguishes a credible, functioning wind market from one that exists mainly on paper?

Christoph Zipf: There is nothing wrong with targets. The EU’s 2030 target to cut net greenhouse-gas emissions by at least 55% compared with 1990 levels, underpinned by National Energy and Climate Plans in which Member States detail how they intend to achieve those reductions, was a significant milestone.

Targets help investors, project developers and supply chains understand the size of a given market. They can help answer questions such as: should I invest in a given market? Is there enough “space” for several project developers? Should I ramp up my manufacturing facilities? That is why WindEurope is now advocating for a binding renewable-energy target for 2040. This target should maintain the visibility of the 2030 target for the coming decade.

But targets alone are not enough.

Any target must be backed by strong governance: national energy and climate plans must translate targets into technology-specific auctions and, ultimately, into real projects on the ground. This is where many countries in Europe are struggling. The main bottlenecks are cumbersome and slow permitting, insufficient investment in grid infrastructure and long grid-connection queues, as well as slow uptake of electrification and corporate power purchase agreements on the demand side.

Finally, an auction is not a wind farm. Too often, European governments get their auction designs wrong, leading to failed auction rounds or increased project-realisation risks.

Building a bankable project pipeline

The next question is whether all the necessary elements of a market can develop in isolation. WindEurope’s answer is no: permitting, grid access and revenue arrangements must support each other.

renewables.GE: For a country at Georgia’s stage of development, which parts of the framework need to be designed together rather than separately: long-term planning, permitting, land access, grid connection, auctions or other revenue arrangements? Is there a useful sequence for putting these elements in place?

Christoph Zipf: Ultimately, all of it will be needed. In the EU, permitting has long been a major issue. Without sufficient permits, the best-designed auctions will fail to create their intended competition or award any capacity.

The EU is now treating the permitting of new wind-energy projects and grid connections as a matter of overriding public interest. Permitting runs through digital one-stop shops. All of this helps create a credible pipeline of projects eligible to bid in auctions.

That does not mean that auctions are not important. They should follow a clear schedule with timings, volumes and budgets, giving good visibility ahead of time. Auctions should award enough volume to avoid artificial scarcity.

Across Europe, two-sided contracts for difference have proven to be the most effective and successful revenue-stabilisation tool. Most countries are now using two-sided CfDs in their national wind-energy auctions. CfDs stabilise revenues, keep financing costs low and pay money back when market prices are above the strike price. CfD strike prices should be indexed for inflation and cost changes. Projects should be able to split capacity between a CfD and corporate PPAs.

Alongside the price of a bid, Georgia may also want to consider including non-price criteria in its auction design. The EU is now doing this. Criteria include cybersecurity, responsible business conduct, biodiversity protection, local job creation and a developer’s proven ability to deliver. That way, auctions reward the projects that bring the most value, not just the cheapest bid.

Grid connection is one of the points at which a promising project can become a stranded development. Zipf argues that Georgia has an opportunity to build a more disciplined process before its queues become as congested as those in many European markets.

renewables.GE: Grid connection is often presented simply as a technical issue. From a developer’s perspective, what information and commitments should a grid-connection process provide on capacity, timing, cost and responsibility in order to be genuinely investable?

Christoph Zipf: Across Europe, the rapid expansion of wind and solar as homegrown and competitive energy sources has created grid-connection queues. Too many projects apply for a new grid connection, while there is not enough administrative capacity to deal with those applications.

To change that, countries are now moving away from “first come, first served” principles for grid-connection requests. Georgia should do better from the outset.

First, apply strict entry criteria so speculative projects do not block new capacity. Second, track milestones and require financial guarantees, so only mature projects keep their grid access. Third, prioritise projects by maturity and value to the system. Fourth, remove “zombie projects” – projects that are no longer being pursued – from the grid-connection queue.

Grid-code requirements should be clear, predictable and harmonised with European rules, not a separate national set. Each requirement should match what the technology can deliver today. Advanced capabilities beyond the baseline, such as grid-forming, should be procured through transparent, market-based schemes with fair pay.

New requirements should come with transition periods, so projects already in development can still commission. Compliance testing should be cost-effective and avoid duplicate country-specific procedures.

Designing wind for a hydro-based system

Georgia’s hydro base can be a source of flexibility, but only if the wider market and grid are designed around the changing generation mix. WindEurope sees wind, solar, storage and hydropower as parts of one system rather than technologies to be planned separately.

renewables.GE: Georgia’s system is still strongly based on hydropower. As wind capacity grows, what market arrangements and investments are most important to ensure that balancing and flexibility are treated as part of wind-market design from the beginning?

Christoph Zipf: Georgia should first assess which energy mix minimises total energy-system costs. Practically, this means asking how much additional wind, solar and battery storage will be required on top of the existing hydro capacity.

When doing these calculations, do not forget that phasing out fossil fuels means that more applications will run on electricity: cars, heating systems and factories. Make sure to factor in this additional electricity demand and adjust national grid planning accordingly.

To improve energy-system flexibility, Georgia needs liquid day-ahead, intraday and balancing markets, with intraday trading closing as close to real time as possible. Wind farms should be able to offer balancing services. Participation should be voluntary and paid at market prices, and aggregation should be allowed. Balancing responsibility for wind should come once intraday and balancing markets are functioning well.

Revenue design is equally important. The more predictable a project’s income, the less expensive it is to finance – an important consideration for capital-intensive wind projects.

renewables.GE: Wind projects need revenue visibility, while governments also need competition and value for consumers. In a context of fluctuating turbine, financing and other project costs, what lessons does European experience offer on auction or contract-for-difference design that allocates risk fairly between investors and consumers?

Christoph Zipf: Two-sided contracts for difference have proven to be the best revenue-stabilisation model for wind-energy projects across Europe. Most countries use them. Some countries have experimented with negative bidding – especially for offshore wind – and burned their fingers in the process. Denmark and Germany, for example, are now considering switching to two-sided contracts for difference for their offshore-wind auctions.

Two-sided contracts for difference provide visibility on future revenues. This reduces project-realisation risks. But more importantly, it is valued by banks and lenders: they like this long-term visibility and are willing to lend money at lower interest rates.

Wind energy is a capital-intensive business. Much of the investment needs to be paid upfront. Reducing financing costs therefore means significantly reducing total project costs.

Communities and supply chains are part of delivery

Technical preparation does not remove the need for local participation. A project may have a grid connection and financing, but still lose time and public trust if it does not engage early and credibly with the communities around it.

renewables.GE: Permitting and community engagement can become major sources of delay when they are addressed too late. What does a predictable and responsible approach look like – one that gives developers certainty while maintaining credible environmental assessment and local participation?

Christoph Zipf: Inform early and consistently – that is key to local participation. Residents do not want to learn that a wind farm is being built when the cranes are set up. They want to have a say in the process and to be transparently informed throughout. That is crucial.

We live in a world of disinformation and misinformation. WindEurope published a report on disinformation this year, showing how myths and false claims around wind energy spread on social media and affect deployment. We identified common disinformation themes and looked at the accounts responsible for online disinformation.

Project developers need to be prepared for that with active communication strategies, rebutting false claims and creating trust and ownership among local residents.

Lastly, project developers need to take site- and community-specific conditions into account when designing benefit-sharing models. There is no one-size-fits-all solution to benefit sharing with, or financial participation by, local communities. What is the optimal fit for one project is not necessarily the optimal fit for another.

Benefits can range from local job creation to investment in local infrastructure, municipal taxes, regional electricity tariffs, environmental-compensation measures, community funds and share programmes. Whatever is chosen, project developers need to communicate these benefits clearly to residents.

For a smaller market, the question is also how to attract experienced suppliers without making unrealistic promises about local manufacturing or immediate project volume.

renewables.GE: Smaller emerging markets may have a limited initial pipeline, while turbine suppliers and major contractors must allocate resources across many countries. What practical signals can help attract experienced suppliers and build local capability without overstating the maturity of the market?

Christoph Zipf: Countries need to be strategic about which role they can play in the European wind-energy supply chain. One thing is clear: European turbine manufacturers will not build factories in every country in which they operate. Instead, they build production hubs and use scale effects for wider regions. The same is true for component suppliers.

So, be strategic. Which existing strengths can Georgia build on? Where are gaps in the European supply chain that could be filled with parts produced in Georgia? Should Georgia perhaps focus on raw-material extraction or refining?

Poland has done this exercise in recent years. It found its niche and started to build a very strong offshore-wind supply chain, which may be able to serve projects across the Baltic Sea.

Capital follows clarity

The final message is simple, but it runs through every part of the interview: a wind market becomes investable when its rules, project pipeline and physical infrastructure give participants confidence that the market will still function several years from now.

renewables.GE: Finally, what is one common policy mistake that countries entering wind development should avoid, and what should Georgia aim to have in place over the next several years to build a durable market?

Christoph Zipf: Capital follows clarity. Give long-term visibility on targets, volumes, sites and revenue models. This clarity will help attract investors and developers willing to build wind-energy projects and establish a Georgian wind-energy industry.

Source note: Interview with Christoph Zipf, Head of Press & Communications at WindEurope.

Photos courtesy © WindEurope – Jason Bickley