Georgia’s electricity system has a familiar seasonal challenge. Hydropower can create surplus generation in parts of the year, while winter demand and lower water availability can increase the need for imports.
A conceptual paper by Professor Davit Narmania, Chair of the Georgian National Energy and Water Supply Regulatory Commission (GNERC), asks whether the country could connect those two realities more deliberately.
Published by the Elizbar Eristavi Energy Training Centre, the paper proposes a market architecture that would combine competitive electricity trade, cross-border exchanges and energy-security mechanisms. It is a conceptual proposal, rather than a newly adopted market rule or regulatory decision.
From summer surplus to a strategic resource
The central idea is straightforward: electricity exported from Georgia during a surplus period could be linked to arrangements that support the country when it faces a seasonal deficit.
Under the proposed model, energy exported in summer could return in winter as electricity—or potentially in another agreed form—through a mechanism described as a Seasonal Energy Swap.
This would move beyond treating every export as a standalone commercial transaction. Instead, a part of Georgia’s seasonal surplus could be used to create an agreed future entitlement: supplying energy when the system needs it most.
The proposal’s stated aim is to combine three objectives:
- economic efficiency through a competitive electricity market;
- deeper integration with regional markets;
- lower exposure to winter electricity deficits and related energy-security risks.
What would a Seasonal Energy Swap mean?
A Seasonal Energy Swap is not simply an immediate electricity sale across a border.
In principle, it would link an export during one period with a return obligation in another. For Georgia, that could mean exporting electricity when hydropower generation is high and receiving agreed energy support in winter, when domestic supply is tighter.
The detail would matter greatly. Such an arrangement would need to define the volumes involved, the delivery periods, the counterparties, the commercial terms and the responsibility if the agreed energy could not be delivered.
It would also need to be clear what “returning” energy in another form could mean in practice. That is one of the areas that would require much more detailed market design before any mechanism could operate.
Why transmission capacity is part of the proposal
The paper also refers to strategic NTC.
NTC—net transfer capacity—is the amount of cross-border transmission capacity available for commercial electricity exchanges. In this context, strategic NTC means reserving part of that available capacity in advance for agreed strategic exchange volumes.
Nugzar Beridze, Deputy Director of the Elizbar Eristavi Energy Training Centre, told renewables.GE that strategic NTC would mean the advance reservation of transmission capacity on an interconnector for strategic swap volumes.
This is an important distinction. An energy-swap agreement would have little practical value if transmission capacity were unavailable when Georgia needed to receive the electricity. The proposal therefore links commercial arrangements with the physical ability to move power across borders.
A three-part market architecture
The model brings together three elements:
- Competitive electricity trading, including spot-market activity;
- Cross-border trade, including Seasonal Energy Swap arrangements;
- Energy-security mechanisms, including the management of strategic NTC.
The value of the approach is that it does not treat electricity-market development and energy security as separate discussions. It suggests that market tools can also be designed around a system’s seasonal reliability needs.
For a hydro-heavy system such as Georgia’s, that is a relevant question. The country’s electricity balance can look very different in summer and winter, while growing demand, new renewable generation and deeper regional connections all add complexity to planning.
What would need to happen next?
The proposal offers a useful direction, but moving from concept to implementation would require work well beyond the market model itself.
Among the practical questions would be whether neighbouring systems and market participants would be willing to enter seasonal arrangements; how capacity would be reserved and priced; how delivery risk would be managed; and how such contracts would fit with Georgia’s broader electricity-market rules and cross-border trading arrangements.
It would also require transparent data, credible seasonal forecasting, clear transmission-capacity calculations and coordination between system operators, regulators and market participants.
Those are substantial tasks. But the paper raises an important strategic question for Georgia: can surplus renewable and hydropower generation be used not only to earn export revenue, but also to reduce vulnerability during the winter season?
That discussion is likely to become more relevant as Georgia seeks to add renewable capacity, strengthen regional interconnections and develop a more mature electricity market.
Source note: This article is based on Professor Davit Narmania’s conceptual paper, “A Conceptual Model of Georgia’s Electricity Market Taking Energy-Security Requirements into Account,” published by the Elizbar Eristavi Energy Training Centre, and clarification provided to renewables.GE by Nugzar Beridze, Deputy Director of the Centre.