Georgia has been a net energy-importing republic in the former USSR. Almost four fifths of the country’s energy supply was imported from other republics. In 1985-1990, energy consumption in Georgia was stable and constituted approximately 18 million TCE (Tons of Coke Equivalent) per year. The collapse of the former USSR had a devastating effect on the energy supply of Georgia. Between 1990 and 2000, the energy consumption was reduced more than twofold.

As most accurate data is available on electricity generation and demand in Georgia, the below figures (Table 3 and Figure 1) are provided from the last seven years and compared to those from 1990.

From the above data one can easily see how dramatically energy consumption (generation) was reduced in Georgia. This is due to political instabilities, civil wars and significant destruction of industrial base, followed by rapid decline of the country’s economy. Most generating plants are undermaintained and at the verge of breakdown, generating only a small fraction of their design capacity. A serious problem is a very low collection rate for delivered electricity (in 2003 average countrywide payments were below 25-30% and approximately 65-75% in Tbilisi[39] [40]) and a widespread corruption in the energy system. Blackouts and electricity restrictions are frequent; many parts of Georgia do not receive electricity for hours or even days at a time. The generation system operates almost without a spinning reserve. The retail tariff for electricity (in Tbilisi) has grown from 2.5 Tetri/kWh (1.9 US cents/kWh) in 1998 to 12.4 Tetri/kWh (5.8 US cents/kWh) in 2003.[41] All this contributes to and stimulates population’s creative thinking regarding attractiveness of micro-hydro and small solar home systems. Small-size renewable energy installations supply them with power to satisfy at least a family’s minimal energy needs when not available from the national grid.