The EU4Energy Governance project undertakes to support Georgia in developing a standard form and template for a Contract for Difference, a market-based mechanism for supporting renewables based electricity generation. Georgia introduced a provision on Contracts for Difference in its recently adopted Renewable Energy Law, however, the necessary contractual framework for its implementation is not yet developed.
The Contract for Difference incentivizes investment in renewable energy by providing stability to project developers through direct protection from financially unsustainable low wholesale prices, while at the same time ensuring that support is granted via a competitive bidding process. It also shields consumers from paying increased support costs when electricity prices are high.
The technical assistance was launched on 21 July 2020 with the participation of Energy Community experts and in close cooperation with the Ministry of Economy and Sustainable Development of Georgia and the Electricity System Commercial Operator “ESCO”. The templates will be delivered by the end of September this year.
* The EU4Energy Initiative covers all EU support to improve energy supply, security and connectivity, as well as to promote energy efficiency and the use of renewables in the Eastern Partner countries Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It does this by financing projects and programmes that help to reform energy markets and to reduce national energy dependence and consumption. Over the longer term, this makes energy supply more reliable, transparent and affordable, thus reducing energy poverty and energy bills for both citizens and the private sector.