The Black Sea Power Interconnector project has cleared several strategic milestones and is aimed to be completed by 2032, placing Georgia closer to establishing its first direct electricity link with the EU, member of the board of directors of Georgia's transmission system operator (TSO) GSE Zviad Gachechiladze told Argus in an interview ahead of the Energy Week Black Sea conference in Bucharest:
Has the launch of the day-ahead and intraday electricity markets in 2024 supported transparency in the domestic electricity market, and what further steps should Georgia take to develop its electricity market?
The launch of the day-ahead and intraday markets has strengthened transparency and fairplay rules in Georgia, even though market reforms are still ongoing and full market liberalisation is expected in 2027. Because energy sector reforms are a sensitive issue for each country, Georgia chose a soft reform approach, which means that a segmented and step-wise reform course has been chosen.
The Georgian Energy Exchange currently operates on a voluntary basis. This gives market participants — beyond regulated trade and bilateral contracts — the option to trade on the day-ahead and intraday markets through the Nord Pool platform. This supports price transparency, builds market confidence and attracts investment. The intention is to continue reforms aiming to decrease the regulated segment and increase deregulated trade.
Georgia aims to connect with the EU through the Black Sea Power Interconnector. What steps have been taken recently towards its implementation, and when is commercial operation expected to begin?
The project is a flagship and very strategic for Georgia, designed to establish a direct connection with European electricity grids and markets. For Georgia, it is not only commercial but vital for its energy sector. It will support commercial interconnectivity, renewable energy development and trade and energy security of Georgia and Romania.
The Georgian and Romanian TSOs are the project promoters. Its feasibility study was completed in 2024 with financial support from the World Bank, confirming both technical and economic viability. The project has since been included in European grid operators' association Entso-E's 10-Year Network Development Plan, and the European Commission recently included it in the list of Projects of Mutual Interest [PMI].
Development continues with World Bank support. Georgia will follow the roadmap set out in the PMI application. In 2026, the country plans to procure consulting services for the design, procurement and supervision of seabed surveys. In 2027–28, work will focus on marine studies, environmental impact assessment and preparation of the business model for regulatory approvals. Permitting will follow, with commercial operations expected to start in 2032.
Have any regulatory hurdles emerged in the implementation of the Black Sea Power Interconnector, and has the carbon border adjustment mechanism (CBAM) influenced project planning?
No regulatory barriers have been identified that cannot be overcome. One very important regulatory issue that is in the agenda is to continue the approximation of Georgian legislation with EU directives and regulations, including the Trans-European Networks for Energy framework, as well as to continue market reforms in Georgia. This is very important for the successful realisation of the project. And as a contracting party to the Energy Community, Georgia has the obligation to be in line with the EU energy acquis and fulfil related commitments. This also includes the implementation of a compliant emissions trading system in Georgia. After gaining the PMI status, project promoters must prepare the business model, define costs and financing structures, and submit regulatory applications in Georgia, Romania and potentially other participating countries. Cross-border cost allocation will form a crucial part of this process. Georgia is also seeking private-sector participation and is seeing strong interest.
The Black Sea cable aims to transport renewable electricity from the South Caucasus to Europe. What is the current pace of renewable additions in Georgia, and can the existing infrastructure support faster deployment?
It is worth mentioning that Georgia participates in several regional green-energy co-operation initiatives that may require substantial national infrastructure upgrades. But if we focus on the Black Sea submarine cable — which has a capacity of approximately 1.3GW — major internal network reinforcements in Georgia and Romania may not be needed, because power flows at that level can be in great extent supported by the existing network. Investments into the project will be focused mainly on the submarine cable and converter station's parts.
System studies are already completed based on the national network development plans, which already include prospective renewable capacity. Implementing these plans — which tend to have a 10-year perspective — is essential for the successful operation of the project. The interconnector is designed to mainly be used for exports — at around 90pc of annual hours — with some reverse flows back to the South Caucasus region.
Georgia and the region have significant untapped renewable resources. Georgia offers attractive support schemes for renewables, and along with the Black Sea cable project it can boost renewable energy development in the near future. The access to the European market via the interconnector will further improve bankability of renewable projects.
Battery energy storage systems (Bess) are expanding rapidly across Europe and are key for balancing renewables and stabilising the grid. But Georgia is a country with high hydropower capacity installed — can Bess facilities still play a key role for the integration of renewables and balancing the system in Georgia, and what is the current outlook for their installation?
Battery energy storage is an important part of modern energy systems, including Georgia's. The country is developing a strategic Bess initiative with a unique implementation approach.
GSE is currently developing a 200MWh Bess project which will be connected near the Tbilisi region to mostly support short-term system stability. This is designed to facilitate additional wind and solar energy integration into the grid. The project is being developed with financial support from the Asian Development Bank. The tendering procedures are currently ongoing, and we are expecting to open bids by March 2026. We are planning to finalise the implementation of the project by 2028.
