Generation restrictions and water spillage during May and June may have cost Georgia’s power sector up to GEL 100 million, according to a preliminary estimate by energy expert Davit Mirtskhulava.
Speaking to BM.GE, Mirtskhulava said high water availability, relatively low domestic demand and limited export opportunities forced the electricity system to restrict a significant share of available generation.
The estimate has not been published as an official calculation and should be viewed as an expert assessment of electricity that could have been generated and sold under more favourable market conditions.
Generation exceeded available demand
According to Mirtskhulava, Georgia has around 3,600 MW of installed non-thermal generation capacity, while peak domestic demand during late spring and early summer was approximately 1,700–1,800 MW.
The gap became especially difficult to manage during periods of strong hydropower production.
With limited demand inside Georgia and reduced opportunities to sell electricity abroad, the system operator restricted output from hydropower, wind and solar facilities to maintain the balance between supply and demand.
Mirtskhulava said nearly half of the country’s generating facilities experienced some form of restriction during May and June. This figure is also based on his assessment rather than a published plant-by-plant official total.
June generation fell sharply
Galt & Taggart reported that Georgia’s electricity generation fell by 16.3% year on year in June 2026.
The investment bank attributed the decline largely to reduced export opportunities and generation restrictions. Run-of-river hydropower plants were particularly affected, with output falling by around 30–35%, according to Galt & Taggart’s sector analysis.
Local electricity consumption increased only slightly, while exports fell sharply compared with June 2025.
Commercial electricity exports were effectively absent during the month. Cross-border flows recorded in the official electricity balance included non-commercial settlement and return arrangements rather than ordinary market sales.
Turkey’s market has changed
Turkey has traditionally been Georgia’s principal electricity export market during the spring and summer.
However, rapid expansion of Turkish renewable generation has reduced daytime market prices and weakened demand for imported Georgian electricity.
By the end of June 2026, Turkey’s total installed power capacity had reached 126.1 GW, with solar accounting for 21.6% of the total. This represents more than 27 GW of solar capacity.
The growth of solar generation has changed the hours in which electricity exports from Georgia remain commercially attractive.
Galt & Taggart said exports resumed in July as Turkish prices improved, but warned that Turkey should no longer be expected to provide the consistently high export prices seen in some previous years.
Developers reconsider financial models
Mirtskhulava said the restrictions are already affecting how developers and banks assess new renewable-energy projects.
Solar, wind and hydropower projects normally estimate how much electricity they will generate and sell over their operating life. More frequent curtailment reduces expected revenue and can therefore change project returns, debt coverage and repayment schedules.
According to Mirtskhulava, developers are beginning to include higher curtailment risk in their financial models. Banks may also apply more conservative assumptions when considering loans for new projects.
This could increase financing costs or require investors to provide more equity before a project reaches financial close. These potential effects remain an expert forecast rather than a confirmed sector-wide change in lending conditions.
Proposal to reduce export costs
Mirtskhulava proposed temporarily reducing transmission, dispatch and related charges during periods when generation is being restricted.
He estimated the combined cost of these services at approximately 1.7 US cents per kWh and argued that temporarily lowering the charges could make exports more competitive and reduce losses for generators.
The proposal has not been announced as government policy.
It would also require consideration of how transmission and system-operation costs would be recovered if generators were temporarily exempted from the charges.
More generation requires more flexibility
The spring restrictions demonstrate that adding renewable capacity must be accompanied by stronger export access, transmission investment and tools for managing seasonal surpluses.
Galt & Taggart has identified reservoir hydropower, battery storage and diversified export markets as possible responses. The planned Black Sea submarine cable could also provide longer-term access to European electricity markets, although the project remains under development.
Without additional flexibility, more solar and wind generation could increase the frequency of periods when available electricity exceeds domestic demand and export capacity.
The challenge is therefore not whether Georgia should continue developing renewable energy, but whether the market and power system can use the electricity when it becomes available.
This article is based on comments by energy expert Davit Mirtskhulava published by BM.GE, together with market information from Galt & Taggart, ESCO and the Turkish Ministry of Energy and Natural Resources.