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Journal number 4 ∘ Demur Chomakhidze
Electricity tariff and the concept of its change

Doi: 10.36172/EKONOMISTI.2021.XVII.04.Demur.Chomakhidze

Expanded Summary

The article mentions that among the many problems of the Central Bank of Georgia is the issue of secure and sustainable energy supply. It is said that energy is the lifeblood of the economy. It depends on human-economic development and strength, population welfare, etc. We can not achieve economic security without achieving energy security; Moreover, it is related to independence and statehood. Of particular importance is the fact that an increase or decrease in energy prices through a chain reaction is immediately reflected in the consumer market. It is therefore not at all surprising that each increase in the consumer tariff on electricity is considered in the society. The article discusses the cause-and-effect aspects of the formation of electricity tariffs and forms an authorial version of its change.

The article describes the factors affecting energy tariffs that lead to its change. These include globalization, the existence and utilization of natural energy resources in the country, energy balance, energy efficiency, the role of society in energy development, etc. The peculiarities and principles of the field are mentioned in this regard, first of all, the need to utilize increasingly expensive energy resources and the need to take into account environmental requirements.

Globalization. Our country has long been connected to its future market economy and has become a full member of the international community. Here, too, the principle of value is the basis for setting tariffs. It does not take into account whether the country is rich or what the incomes of the population are. Georgia has so far maintained relatively low tariffs. Only in energy-rich countries is it lower than us. In most states, however, it is much higher.

Power generation structure. The impact of this factor on tariffs is well known. The existence of hydro and thermal capacities in the electrical system has its necessity, but also its pros and cons. Construction of hydroelectric power plants requires relatively more time and investment compared to thermal capacities. But due to the need for expensive fuel, the tariff in thermal power plants is 5-6 times higher.

Deficient energy balance. The energy balance of our country is traditionally deficient. Georgia currently imports about 70% of the energy resources it needs, only 30% of which is locally produced. Natural gas and petroleum products are almost completely imported in the energy balance. In recent years, especially in the autumn-winter period, the

Existence and utilization of natural energy resources. Almost all of them are more or less energetic on the territory of Georgia. We are especially rich in hydropower and non-traditional (solar, wind, geothermal) resources. We have coal and oil fields. The first of them is in the region only in Georgia. As for their assimilation it is unsatisfactory. We use only 10-12% of the technical capacity of hydropower resources and 20-25% of the economically advantageous potential. Oil and coal absorption levels are low. Only at the initial stage is the use of solar and wind yet expensive energy.  electricity balance is also deficient.

The role of society. The conscious participation of the community in the development of energy is special. Under the influence of this factor, Khudoni HPP and Namokhvani cascade could not be built in Georgia in recent years. The same picture continues now. If in the past large hydropower plants were targeted, now a certain part of the society is against the construction of hydropower plants of any size and in parallel they are also protesting against the increase of electricity tariffs. We unfortunately have many examples of this.

Energy efficiency. The ancient truth is that without an economy, society cannot successfully manage its limited resources. An intensive form of extended reproduction is an organic characteristic of the economic system of a society. It creates objective guidelines for the rational and efficient use of resources to achieve better end results.

Peculiarities of field development Tariff change is significantly influenced by the fact that the characteristics of energy are practically taken into account in the development of the sector. In addition to the fact that the production and consumption of electricity coincide in time, this sector is characterized by high intellectual labor capacity and capital capacity among the sectors of the economy. Second, the industry requires intensive and continuous funding to maintain its ability to function while achieving progress in meeting the needs of the macroeconomic environment. Third, unlike other sectors, energy has a high socio-economic responsibility. Fourth, it as a typical representative of a natural monopoly needs independent regulation. Fifth, it is necessary to attract a significant amount of investment. This is due to the combined influence of other objective factors (ecology, the need to use increasingly expensive energy resources, etc.) to further increase costs, which leads to tariff increases.

The article assesses the role and importance of energy For the socio-economic development of the country. Analysis of market economy, energy culture Levels and dynamics of product tariffs in Georgia. Compared to neighboring, former Soviet republics and With similar figures to the advanced countries of Europe. Factors acting on tariffs are characterized. between them Natural energy resources Electricity generation Structure, energy efficiency, energy The role of society in balance, energy development and The state of globalization.   The statement is a conclusion that in Georgia, as well The appearance of tariffs in the world is typical. this Driven by the ever-increasing energy resources The amount of extraction (production) is magnified and continuous The need for volume investments, environmental resistance Tightening, etc.   According to the author, in order to improve the technical field Economic indicators and reduced dates are essential More technologies of scientific and managerial progress With high rates and energy attraction.