Alternative Energy Sources: Pathways to Georgia's Energy Independence

Georgia stands at a pivotal juncture in its energy development, with alternative energy sources offering a clear path toward greater independence and sustainability. The country’s diverse geography and climate provide substantial potential for hydropower, solar, and wind energy. However, realizing this potential requires addressing existing gaps in utilization, policy challenges, and infrastructural shortcomings.

Hydropower: A Dominant Yet Underutilized Resource

Hydropower remains the cornerstone of Georgia's renewable energy sector, contributing approximately 70% to the nation’s electricity generation. With over 20,000 rivers, nearly 300 of which are suitable for hydropower development, the country is well-positioned to expand in this area. Yet, only about 22% of the total hydropower capacity is currently harnessed. This underutilization is largely due to seasonal variability, infrastructure limitations, and environmental concerns.

Notable projects such as the Dariali (110 MW) and Shuakhevi (187 MW) hydropower plants highlight efforts to capitalize on this potential. The Shuakhevi project, for example, is the largest hydropower plant constructed in Georgia in the past 50 years, with an investment exceeding $420 million.

Georgia plans to expand its hydropower capacity by 520 MW by 2030. Upcoming large, medium, and small-scale projects could significantly enhance the country's energy independence.

This expansion is critical, particularly due to Georgia’s winter reliance on imported fossil fuels. Increasing domestic production will reduce the energy trade deficit and solidify Georgia’s role as a regional energy hub. Interconnections with Turkey, Armenia, and Azerbaijan further support electricity exports, especially during surplus periods.

Solar Energy: High Potential, Emerging Development

Georgia has considerable solar energy potential, with 250–280 sunny days annually and solar irradiance ranging from 1,250 to 1,800 kWh/m². Despite this, the sector remains largely underdeveloped.

By late 2024, Georgia had installed 133 MW of solar capacity, up from 64 MW in 2023, an encouraging sign of growth, yet still a small fraction of the country’s true potential.

The country targets 5.289 GW of renewable energy capacity by 2030, with solar expected to play a key role. Preliminary assessments suggest approximately 4.5 GW of untapped photovoltaic (PV) capacity. A flagship initiative is the 100 MW solar plant to be developed by Masdar and the Georgian Energy Development Fund, expected to commence operations by 2027.

Expanding solar capacity is essential for offsetting seasonal shortfalls in hydropower. Greater solar generation will enhance energy security, reduce fossil fuel dependency, and reinforce Georgia’s position in regional power exports.

Wind Energy: Complementing Seasonal Variations

Wind energy provides a strategic complement to Georgia’s hydropower and solar resources, especially during the winter months when river flows and sunshine diminish. The country’s wind energy potential is estimated at 4 TWh annually, with a theoretical capacity of 1,500 MW.

Currently, Georgia has only one operational wind project, the Qartli 1 Wind Farm (20.7 MW), which performed well with a 46% capacity factor in 2021.

Georgia aims to increase wind capacity to 1,332 MW by 2030. Feasibility studies are underway for 462 MW of new capacity, and thirteen Memorandums of Understanding (MoUs) have been signed for projects totaling 740 MW, with an expected annual generation of 2.65 billion kWh.

Wind energy development can help Georgia reduce seasonal energy imbalances, lower reliance on imports, and boost export potential. The country’s geographic location and established interconnection infrastructure enable active participation in regional electricity markets.

Diversifying the energy mix through solar and wind investments will mitigate hydropower seasonality, strengthen energy security, and reduce fossil fuel dependency. Georgia’s strategic interconnections with neighboring countries further position it as a dependable electricity exporter.

Expert Insights and Future Outlook

Experts emphasize that alignment with EU energy standards is essential for attracting investment and ensuring market transparency. The International Renewable Energy Agency (IRENA) also highlights Georgia’s considerable renewable potential and recommends increasing the share of renewables to achieve climate and energy security goals.

Several important policy measures have been implemented to support renewable energy development:

1. Liberalized Energy Market: Since 2008, Georgia has allowed investors to operate under a Build-Own-Operate (BOO) model.

2. Support Schemes: A market premium scheme and Contracts for Difference (CfD) auctions offer price stability for renewable energy investors.

3. Institutional Support: Entities such as the Georgian Energy Development Fund (GEDF) and the Ministry of Economy’s renewable energy division facilitate project development and policy implementation.

But is this enough to attract more investment and technology, and to accelerate green energy production? Is the Georgian market ready to absorb this energy, and is there sufficient demand in neighboring regions?

The answers are complex. One fact is clear: Georgia missed the opportunity to become a major regional player in the green energy sector. Much of what is unfolding in the Georgian energy market today should have occurred two decades ago.

Despite missed opportunities, is there still a light at the end of the tunnel? The answer is yes. One of the most promising developments is the Black Sea Submarine Cable Project, which would connect Georgia directly to the EU.

The Black Sea Submarine Cable Project

This project envisions a high-voltage underwater transmission line linking Georgia’s and Europe’s electricity grids. If realized, the 1,155-kilometer-long cable will connect Georgia with Romania, enabling Southeastern Europe to benefit from increased export capacity and participate in hourly electricity markets.

The project promises to enhance energy security in both Europe and the South Caucasus, support renewable energy growth, and expand Georgia’s transit potential.

From May 2022 to July 2024, the Italian consulting firm CESI conducted a techno-economic feasibility study, confirming the project’s viability. The study evaluated technical, environmental, social, and economic factors, identifying strong export potential from the South Caucasus to Southeastern Europe, primarily of renewable energy. It also projected net economic benefits for all countries involved.

Yet, even with such a strategically significant project, relevant authorities often fall short in implementing efficient policies. Regional and geopolitical instability, combined with domestic political turbulence, continues to weaken Georgia’s investment climate and make investors more cautious.

Conclusion

Georgia’s abundant renewable energy resources: hydropower, solar, and wind - offer a powerful route to energy independence, economic resilience, and environmental sustainability. However, the country has not capitalized on these advantages at the necessary pace or scale. Years of underinvestment, policy inefficiencies, and political instability have delayed Georgia’s emergence as a green energy leader.

Still, hope remains. Recent progress in solar and wind, coupled with the strategic vision embodied in the Black Sea Submarine Cable Project, suggests that Georgia can still become a vital renewable energy hub linking the Caucasus with the European Union.

Realizing this vision depends on decisive policy action, a stable investment environment, and closer alignment with EU regulatory frameworks. If these challenges are met, Georgia could regain lost momentum and emerge as a regional model for sustainable energy transformation.