Georgia already has a familiar model of rooftop generation through net metering, while net billing and other self-consumption arrangements are broadening the options available to consumers.

But the longer-term shift is not only about installing more solar panels. It is about allowing households, businesses and communities to use, store and share electricity in ways that create value both for them and for the electricity system.

In written answers to renewables.GE, Salome Janelidze, Senior Energy Expert at the Energy Community Secretariat, explains what active customers, energy communities, peer-to-peer trading and aggregation could mean in practice for Georgia.

From rooftop solar to active participation

For many consumers, rooftop solar still means one straightforward proposition: generate electricity on-site and reduce the amount bought from the grid. Janelidze says the next stage is broader. It gives consumers more options for how they use their generation—and, eventually, how they participate in the wider market.

renewables.GE: Georgia already has a relatively familiar model of rooftop generation through net metering. How would the next generation of renewable self-consumption differ from the system consumers and businesses know today?

Salome Janelidze: Georgia already has net metering and net billing, including collective and virtual arrangements, so there is a good starting point. But the active-customer model goes considerably further than using one’s own generation to reduce electricity purchases or receiving remuneration for surplus electricity.

An active customer can go beyond simply purchasing electricity, for example by using or selling self-generated electricity, storing electricity or participating directly or through aggregation in flexibility schemes and electricity markets.

Importantly, this does not necessarily require new assets. Even a household with the same rooftop solar installation can have more ways to use and sell the electricity it produces. The main shift is from self-consumption towards active participation in the electricity market.

Additional assets widen those opportunities further. A battery can increase self-consumption, respond to electricity-price signals and potentially provide flexibility services. An electric vehicle or another controllable load can shift consumption in time and also offer flexibility.

At scale, flexible demand, storage and aggregated distributed resources can help balance supply and demand, integrate more variable renewable generation and help address network constraints.

A collective route into renewable energy

Not every household or small business has a suitable roof, capital for a solar installation or the ability to manage one alone. Energy communities could offer a collective model, allowing several participants to benefit from generation or storage while keeping a local social or economic purpose at the centre.

renewables.GE: “Energy community” can sound abstract. What could one actually look like in Georgia? Could residents of an apartment building, a village, or several businesses jointly own or use renewable generation and storage?

Salome Janelidze: One simple example would be a municipality making the roof of a school or another public building available for a solar installation. Local residents and small businesses could form an energy community around it, contribute to the project, use or share the electricity it produces and, where there is surplus, sell it under the applicable market arrangements.

It is important to keep in mind that an energy community is not just another small commercial power project. Its primary purpose is to provide environmental, economic or social benefits to its members or to the local area, rather than to generate financial profit as its primary objective.

Energy communities can still generate income and provide financial benefits to their members, but financial return should not become their primary purpose.

They can also help address energy poverty by widening access to renewable energy for low-income and vulnerable households. In practice, this can be supported through targeted measures, such as reduced or deferred participation costs, better access to finance, or specific participation arrangements in publicly supported and municipal projects.

A framework that people can actually use

Recognition in legislation would be an important first step, but it would not by itself create functioning community projects. For Janelidze, the practical rules—how people join, share electricity, connect, receive bills and leave a project—will determine whether the model is usable beyond a handful of specialists.

renewables.GE: What are the main regulatory and practical building blocks that still need to be in place before energy communities can operate effectively in Georgia?

Salome Janelidze: The first step is the legal basis. Georgian primary legislation needs to recognise renewable and citizen energy communities and set out their core rights, governance principles and relationship with the electricity market.

But simply introducing the term “energy community” into the law is not enough. Those rights then have to be translated into workable processes through secondary legislation: registration, membership and effective control, governance, electricity sharing and allocation, connection and metering, interaction with suppliers and distribution-system operators, billing and settlement.

A second priority is making the framework usable by ordinary citizens. Energy communities have quite demanding governance requirements: who may participate, who controls the community, how decisions are taken, how members join or leave and how benefits are allocated.

If every small community has to design all of this from scratch with specialist legal advice, the framework will be difficult to use in practice. Model founding documents, standard application forms, guidance and formation support can therefore make a real difference.

More advanced forms of energy sharing and market participation will ultimately depend on further development of the electricity market, including an operational balancing market and more granular settlement.

But that is not a reason to wait. Georgia already has the basis for a simpler first-stage model using the existing supplier interface and monthly settlement arrangements, with community generation allocated among members according to an agreed methodology. As balancing and interval-based settlement develop, the same framework can support more sophisticated allocation and wider market participation.

Peer-to-peer trading is not a separate grid

Selling solar electricity directly from one person to another can sound simple. In reality, the network, suppliers and system operators still have essential roles: the buyer needs electricity when the seller is not generating, and someone must manage metering, balancing and settlement.

renewables.GE: You have researched peer-to-peer electricity trading specifically in the Georgian context. How realistic is a model in which one consumer or prosumer can sell surplus electricity directly to another?

Salome Janelidze: It is realistic, but whether it develops in practice will depend first of all on whether it offers consumers a better deal than the alternatives they already have.

Peer-to-peer trading does not necessarily mean creating a separate electricity system. A producer and a consumer can agree that a certain amount of renewable electricity is sold between them and at what price, but in a grid-connected arrangement the electricity will normally still flow through the existing network.

Therefore, the supplier and system operators do not simply disappear. Someone still has to provide electricity when the seller is not producing, as well as deal with metering, balancing, network charges and settlement.

The economics are particularly relevant in Georgia. Under the existing net-metering scheme, a prosumer already has a relatively simple way of obtaining value from surplus generation through offsetting, so the additional benefit of selling that electricity to another consumer may be limited.

Under net billing, the calculation changes because surplus electricity is remunerated separately from the electricity the customer buys. This, coupled with further opening of the wholesale and retail electricity markets, could create room for peer-to-peer transactions where the seller can receive more than under the standard export arrangement while the buyer still pays less than for alternative supply.

But the difference has to be large enough to cover the costs of making the transaction work. The seller, buyer and any intermediary involved all need to have a reason to participate.

P2P trading could also be relevant in remote areas of Georgia that are not connected to the electricity grid. Where extending the grid is difficult or costly, local microgrids combining renewable generation, storage and electricity demand could offer an alternative. Within such systems, P2P trading could help make better use of locally generated electricity by encouraging consumption when supply is abundant and shifting demand when it is scarce.

Prosumer, energy community or active customer?

The terminology can easily become confusing. A prosumer, an energy community and a peer-to-peer transaction are related concepts, but they describe different roles. Understanding the distinction matters because each will require different legal rights and commercial arrangements.

renewables.GE: For an ordinary consumer, what is the practical difference between being a prosumer, participating in an energy community, and trading electricity peer-to-peer? Could these models eventually coexist?

Salome Janelidze: The easiest way to explain it is that these concepts describe different ways of participating in the electricity market.

An active customer is the broader concept. It describes a final customer, or customers acting together, that can go beyond simply buying electricity—for example, by using or selling self-generated electricity, storing electricity or participating in flexibility schemes.

A renewable self-consumer, often referred to more generally as a prosumer, is a more specific category focused on generating renewable electricity for its own consumption, with the possibility of storing or selling surplus generation.

An energy community is a collective organisational model that allows several participants to act together under defined membership, governance and control arrangements.

Peer-to-peer trading represents a transaction. It is one way in which renewable electricity can be sold from one market participant to another. It is also important to distinguish peer-to-peer trading from collective self-consumption or energy sharing within an energy community, because the legal and commercial relationships are different.

These forms of participation can coexist. The same household could have rooftop solar, be a member of an energy community and, where the relevant framework allows it, also sell electricity through a peer-to-peer arrangement.

When flexibility becomes valuable

Batteries, electric vehicles and controllable equipment could help the electricity system respond to changing demand and renewable output. But their technical capability alone is not enough. Consumers need a clear reason to change behaviour and a reliable way to be compensated when they provide a measurable service.

renewables.GE: As rooftop solar, batteries and electric vehicles become more common, consumers can potentially provide flexibility to the electricity system rather than simply consume or generate power. How could this work in Georgia?

Salome Janelidze: Having a battery, an electric vehicle or a flexible load does not automatically make it a flexibility resource for the system. There also has to be a reason to change consumption or production at a particular time, and a way to measure the response and give the consumer value for it.

There are two main ways this can happen. The simplest is through prices. If electricity is cheaper at certain hours, an EV owner may choose to charge then, a battery may charge when electricity is abundant and discharge later, or a business may shift part of its consumption away from a more expensive period. The benefit to the customer comes mainly through a lower electricity bill. This is usually referred to as implicit demand response.

The second possibility is that flexibility itself becomes a service. A consumer, often through an aggregator, can agree to reduce or increase consumption when required and be paid for providing that response. Depending on the service, payment can be for making capacity available, for being activated, or for the amount of flexibility actually delivered. This is explicit demand response.

For Georgia, the main constraint today is the market architecture. The country has day-ahead trading, but balancing is still settled under a transitional monthly framework and market participants do not yet carry balance responsibility.

Under Georgia’s existing central-dispatch arrangements, the system operator can already instruct certain users to adjust consumption when required for secure system operation. But this is an operational dispatch measure rather than a market-based flexibility service. The consumer is not offering flexibility as a separately procured and remunerated product.

Why small resources may need to be combined

One household battery or rooftop system may be too small to participate in many market services on its own. Aggregation could combine many smaller resources, while a virtual power plant could digitally coordinate them so they behave more like one larger system asset.

renewables.GE: Technologies such as aggregation and virtual power plants can combine many small distributed resources so that they operate more like a single power-system asset. Do you see a realistic role for such models in Georgia?

Salome Janelidze: Yes, potentially a very important one, though I would distinguish aggregation from the concept of a virtual power plant.

Aggregation is the market function of combining a number of smaller loads or generation resources so that they can participate collectively in electricity markets. A virtual power plant is one way of organising and operating such a portfolio, using digital monitoring and control to coordinate the underlying resources so that they can behave more like a single power-system resource.

For many electricity-market products and system services, an individual household battery, EV or rooftop installation may be too small, or participation may simply be uneconomic on an individual basis. An aggregator can combine hundreds or thousands of such assets and offer their combined capability to the market.

For Georgia to benefit from aggregation, both the legal framework and the necessary market arrangements need to be in place. The market has to be able to register the portfolio, measure what it delivers, allocate balancing responsibility, and settle and pay for the service.

Keeping solar investment attractive and network costs fair

As more consumers generate their own electricity, tariff design becomes increasingly important. The system must reward useful generation and flexibility without placing an unfair share of network costs on consumers who do not own solar or storage assets.

renewables.GE: Self-consumption schemes have to make renewable investment attractive while also ensuring that network costs are shared fairly among consumers. What principles should Georgia follow?

Salome Janelidze: I would start from a simple principle: the framework should reflect both the costs associated with prosumers’ use of the system and the value they can provide to it.

A prosumer can use the electricity system in several ways. At one moment electricity is withdrawn from the grid; at another, surplus generation is injected into it. These flows have different economic effects, and the framework should reflect those effects rather than treating prosumers simply as a separate customer category.

It is important to keep three elements distinct. Electricity exported by the prosumer has an energy value and should be remunerated accordingly. Use of the network creates a separate set of network costs, which should be reflected through transparent and cost-reflective tariffs. And where a prosumer provides a measurable service to the system, for example through flexibility, that service may have its own value and should be remunerated separately.

There is no single ideal network tariff for prosumers. Some network costs are driven by capacity, some by the volume of electricity transported, and some by when and where the network is used. The appropriate design has to reflect the actual cost drivers of the Georgian network. Self-generation should not be penalised simply because a customer is active, but any preferential treatment should equally be based on a demonstrable benefit to the network rather than on prosumer status alone.

Predictability is also important. Rooftop solar and storage are long-term investments, so consumers need a clear understanding of how exported electricity will be valued and how network charges may evolve. Changes should therefore be transparent and gradual.

A practical test for the next five years

For Janelidze, Georgia does not need to introduce every new market model at once. The decisive measure of progress is whether the rights discussed in policy documents become ordinary, understandable options for households and businesses.

renewables.GE: Looking three to five years ahead, what would meaningful progress look like? What would need to change for Georgian consumers to become genuine participants in the electricity market rather than primarily passive electricity users?

Salome Janelidze: I would look primarily at what consumers can actually do, rather than only at what is written in legislation.

Establishing the legal concepts of active customers, aggregators and energy communities is essential. But meaningful progress means making those rights usable in practice through connection, metering, data access, market participation, settlement and payment.

In three to five years, I would hope to see energy communities and collective self-consumption operating in practice; customers combining rooftop generation with storage and flexible demand; aggregators managing real portfolios and participating in relevant electricity markets; and households and businesses being remunerated for measurable flexibility or other services to the system.

Georgia does not need to introduce every element at once. Implementation can develop in stages, but each new option should be genuinely usable when introduced.

Perhaps the simplest test is whether an ordinary household or SME can choose to participate, understand the economic benefit, complete the necessary steps without excessive complexity and actually receive value from doing so. Once that becomes business as usual, Georgian consumers will have moved from being primarily passive electricity users to genuine active market participants.

Source note: This article is based on written responses provided to renewables.GE by Salome Janelidze, Senior Energy Expert at the Energy Community Secretariat.