NATIONAL ENERGY AND WATER SUPPLY REGULATORY COMMISSION OF GEORGIAREGULATORY COMMISSION OF GEORGIA

Power Transmission SystemPower Transmission SystemPower Transmission System Power Transmission System of Georgia and Its Regulationof Georgia and Its Regulation

ZURAB GABELAIAZURAB GABELAIACOMMISSIONERCOMMISSIONER

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May 5May 5--6, Chisinau6, Chisinau

MayMay 20102010

SCHEMATIC MAP OF THE 220-500 kV POWER GRID NETWORK OF GEORGIA

Сухумгэс

Сухуми

Кавкасиони

Legend:

500 kV substations220 kV substations110 kV substationsRUSSIA

Ладжанургэс

vardnilhesi

IV III II I

I II

Ткварчелгэс

Ingurges

Зугдиди 110 кв

-Дариали

К 110 kV substationsThermal power plantsHydro power plants500 kV transmission lines330 kV transmission lines220 kV transmission lines110 kV transmission lines

RUSSIA

varcixehesebi

Гуматгэс

Рионгэс

Шаоргэс

Дзеврулагэс

Цкалтубо

Варцихегэс

IV III II I

Менджи

Кутаиси 220 Жинвалгэс

ГориХашури

Zestafoni 500

Загэс

Джава

Казбеги

110 kV transmission lines

Ацгэс

Ksani

Batumi

Гурджаани

Навтлуги 220

Дшдубе

Лиси

Рустави 220

Глдани

Ортачалгэс

AzenergoKhopa

Алазангэс

Ацгэс

TbilsresiМарнеули

Храмгэс I

Храмгэс II

Лалвари

Ниноцминда 110

Садахло 110

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TURKEYAZERBAIJANARMENIA

Power transmission licensesPower transmission licensesPower transmission licensesPower transmission licensesJSC ‘JSC ‘RosGruzenergoRosGruzenergo’’

-- 500 kV transmission line ‘500 kV transmission line ‘KavkasioniKavkasioni’ ~ (’ ~ (IngurgesIngurges –– subsub--station `station `TsentralnayaTsentralnaya~) ~) –– 408 km (254 miles)408 km (254 miles)

-- 500 kV transmission line ‘500 kV transmission line ‘ImeretiImereti” ~ (” ~ (IngurgesIngurges –– subsub--station station ZestafoniZestafoni 500) 500) –– 128 km (79.5 miles)128 km (79.5 miles)

-- 500 kV transmission line ‘500 kV transmission line ‘MukhraniMukhrani’ ~ (’ ~ (AzenergoAzenergo –– subsub--station station KsaniKsani 500) 500) –– 85.4 km (53 miles)85.4 km (53 miles)

-- 500 kV transmission line ‘500 kV transmission line ‘KartliKartli I’ ~ (I’ ~ (TbilsresiTbilsresi –– susbsusb--station station KsaniKsani 500) 500) –– 90.7 km (56 miles)90.7 km (56 miles)

-- 500 kV transmission line ‘500 kV transmission line ‘KartliKartli II’ ~ (subII’ ~ (sub--station station ZestafoniZestafoni 500 500 –– substation substation KsaniKsani500) 500) –– 164.2 km (102 miles)164.2 km (102 miles)

-- 330 kV transmission line ‘330 kV transmission line ‘GardabaniGardabani’ ~ (’ ~ (TbilsresiTbilsresi –– subsub--station station AgstafaAgstafa) ) 64 8 k (40 3 il )64 8 k (40 3 il )

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–– 64.8 km (40.3 miles)64.8 km (40.3 miles)

-- 220 kV transmission line ‘220 kV transmission line ‘AdjaraAdjara’ ~ (sub’ ~ (sub--station Batumi 220 station Batumi 220 –– substation substation KhopaKhopa) ) –– 32 km (20 miles)32 km (20 miles)

Power transmission licensesPower transmission licensesLimited Liability Company “State Power Grid of Georgia”Limited Liability Company “State Power Grid of Georgia”

-- 500 kV number of substations: 500 kV number of substations: 3 3

220 kV number of substations:220 kV number of substations: 1515-- 220 kV number of substations:220 kV number of substations: 1515

-- 110 kV number of substations: 110 kV number of substations: 2222

-- 35 kV number of substations:35 kV number of substations: 3434

-- 220 kV total length of power transmission lines: 1430 km220 kV total length of power transmission lines: 1430 km

-- 110 kV total length of power transmission lines: 918.3 km110 kV total length of power transmission lines: 918.3 km

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0 tota e gt o po e t a s ss o es 9 8 30 tota e gt o po e t a s ss o es 9 8 3

-- 35 kV total length of power transmission lines: 405.3 km35 kV total length of power transmission lines: 405.3 km

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Import of electricity, 2005-2010 (thous. kWh)

15000001398638

p y, ( )

1000000 777568

433264649048

0

500000

2005

254802 277800

2005 2006 2007 2008 2009 2010

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1158.7

Export of electricity, 2006-2010 (in kWh)

800

1000

1200

629.470079679.5594 749.428866

ions

200

400

600

82.642167

Mill

0

2006 2007 2008 2009 2010

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9

Regulated, deregulated, partially deregulatedRegulated, deregulated, partially deregulated electricity and electricity generated by thermal

power plants in 2009 (in million kWh)

3,465.10, 42%

963.50, 12%

248.50, 3%

Regulated HPPs (Vardnil HPP, Ingur HPP)

Partially deregulating

3,601.00, 43%

Deregulating

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Thermal power plants

Tariff MethodologTariff MethodologTariff MethodologyTariff Methodology

The Commission sets tariff methodologies;

The current methodology was adopted by the Commission in 1998;;

The full-cost based methodology in use

Currently the new incentive tariff settingCurrently, the new incentive tariff setting methodology has been elaborated.

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Transmission tariffsTransmission tariffsTransmission tariffsTransmission tariffs

Transmission tariffs are set for two voltage groups:Transmission tariffs are set for two voltage groups:500500--330 kV and 220330 kV and 220--110110--35 kV;35 kV;Transmission tariff is a singleTransmission tariff is a single--block tariff and it is determined block tariff and it is determined for transmission of the system’s peak energy;for transmission of the system’s peak energy;for transmission of the system s peak energy;for transmission of the system s peak energy;The transmission tariff includes the losses;The transmission tariff includes the losses;According to the legislation, the Commission sets the level of According to the legislation, the Commission sets the level of cco d g o e eg s a o , e Co ss o se s e e e occo d g o e eg s a o , e Co ss o se s e e e othe network losses.the network losses.

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NearNear--term plans term plans NearNear term plans term plans In the memorandum of 2007 signed between the Government of Georgia and“Georgian Urban energy”, terms for the construction of 78 MW ‘Parvan HPP’were corrected in 2009 (construction of HPP had to begun in August)were corrected in 2009 (construction of HPP had to begun in August).

On the basis of the memorandum signed between the Government ofGeorgia and “Hydro Zoti”, the construction of the 41.2 MW cascade wouldstart in 2010.

In 2009 a memorandum was signed with the Caucasus Energy andInfrastructure for the construction of 28 MW “Mtkvari HPP”.

Oth i t t t i 2009 th i i f th d b tOther important events in 2009 were the signing of the memoranda betweenthe Government of Georgia and the Nural Energy Production and MarketingJnc (Turkey), the Korea Electric Power Corporation and the SK Engineeringand Construction Co, Ltd (Korea), for the construction of the cascadeNamakhvani (installed capacity 450 MW. Annual generation 1.5 billion kWh).C t ti f thi d i h d l d f 2011Construction of this cascade is scheduled for 2011.

In 2010, the Turkish company “Kolin” won the tender for construction of105.7 MW cascade of 4 HPPs on the Tekhuri River. After that a memo wassigned with the company. The company committed to obtaining permissions

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signed with the company. The company committed to obtaining permissionsand construction licenses within 9 months and to putting the cascade intooperation in three years. Annual projected cascade generation is 490million kWh.

LongLong--term plansterm plansLongLong term plansterm plans

According to the existing project, The Khudon HPP has to be constructed on the InguriRiver 75 km away from the city River 75 km away from the city of Zugdidi and 36 km north of the Inguri dam.

Construction of the KhudonConstruction of the KhudonHPP began in 1979 and stopped in 1989.

On the basis of completed On the basis of completed research, the installed capacity of the Khudon HPP will be 750 MW, and annual generation of electricity will be 1.455 billion

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electricity will be 1.455 billion kW-h.

C diti d l fC diti d l fConditions and rules for Conditions and rules for construction of new hydro power plantsconstruction of new hydro power plants

Main information related to construction of the hydro l b f d h b f hpower plant can be found on the webpage of the

Ministry of Energy, www.minenergy.gov.ge

Comprehensive information about future construction of new power plants can be found in the following webpage of the Ministry of Energy http://hpp minenergy gov geof the Ministry of Energy, http://hpp.minenergy.gov.ge

Investors have the right to sell generated electricity from

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g g yconstructed HPPs, and also to export at non-regulated prices.

SCHEMATIC MAP OF 220-500 kV POWER GRID NETWORKS OF GEORGIA

Сухумгэс

Сухуми

Кавкасиони

Legend:

500 kV substation

220 kV b t ti

RUSSIA

Ладжанургэс

Варднилгэс

IV III II I

I II

Ткварчелсрес

Ingurges

Зугдиди 110

kV -Дариали

К 220 kV substation

110 kV substation

Thermal power plant

Hydro power plant

500 kV transmission lines

500 kV future transmission lines

330 kV transmission lines

220 kV transmission lines

110 kV t i i li

varcixehesebi

Гуматгэс

Рионгэс

Шаоргэс

Дзеврулагэс

Цкалтубо

Варцихегэс

IV III II I

Менджи

Кутаиси 220 Жинвалгэс

ГориКашури

Zestafoni 500

Загэс

Джава

Казбеги

110 kV transmission lines

Ацгэс

Ksani 500

Batumi

Гурджаани

Навтлуги 220

Дидубе

Лиси 220

Рустави 220

Глдани

Ортачадгэс

Акалцихе 500/400

Азенерго

Khopa

Алазангэс

Ацгэс

Tbilsresi Марнеули

Храмгэс I

Храмгэс II Садахло цева 110

Ниноцминда 110Борчха

TURKEY

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ARMENIAAZERBAIJAN

Third Party AccessThird Party AccessThird Party AccessThird Party Access

According to the Law on Electricity and NaturalAccording to the Law on Electricity and Natural Gas, electricity transmission and distribution license holders have to secure transit oflicense holders have to secure transit of electricity to persons, who have the legal right to sell electricity to end users at the tariff levels setsell electricity to end users at the tariff levels set by the Commission.

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Thank you for your Thank you for your attention

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