Georgia, which is a transit country for oil and gas routes, is spearheading efforts to launch a very ambitious project that would create a corridor for green energy from the Caspian to the Balkans and Central and Eastern Europe (CEE), boosting the EU’s diversification efforts. While the project now appears to make sense in pure economic terms, regional geopolitical challenges remain to be addressed.
In Bucharest during Black Sea Energy Week on February 7-9, Zviad Gachechiladze, Member of the Board of Directors at the Georgian State Electrosystem (GSE), the country’s single Electricity Transmission System Operator, presented the development of the Black Sea Submarine Cable Project that will connect Georgia to Europe using green electricity from Georgia as well as wind farms in Azerbaijan.
The leaders of Azerbaijan, Georgia, Hungary, and Romania signed in December an agreement in Bucharest to build a new power cable across the Caucasus and under the Black Sea that can help bring renewable electricity to Europe.
“The idea is to get regional renewable energy and deliver it to the European Union from a surplus cheaper price zone to a higher price zone with demand for energy. It’s not just Azerbaijani renewable energy but also Georgian renewable energy so it’s regional renewable energy but we are aware that Azerbaijan has quite big potential in wind,” Gachechiladze told NE Global on February 8.
Project faces major technical, economic challenges
Despite the political agreement, there are big technical and economic challenges. He noted that for now, Georgia has agreed with the Italian consulting company to perform a feasibility study for the Georgian-Romanian Submarine Cable Project to determine the best ways and opportunities for the practical implementation of the project. The consulting company started the study on May 11, 2022, and its completion is scheduled in 18 months.
To link Georgia and Romania, the company would need to develop a special 500 kV DC cable with a capacity of 1,000-1,500 megawatts (MW). “Unfortunately, the technology does not allow higher capacity because of the difficulties in the sea, insulation type, and weight of the cable. Then, you must start another parallel line with converter station,” he said.
Gachechiladze acknowledged that Georgia and Romania cannot realize the project on their own but argued that they have donors eager to finance the project and reminded that the project is also supported by the European Union. A previous World Bank economic assessment indicated that the undersea cable project would generate sufficient economic and financial benefits to warrant further consideration. USAID and the United States Energy Association (USEA) completed a technical follow-up assessment and confirmed that, in fact, with minimal upgrades, the countries’ power networks are already robust enough to transfer up to 1,000 MW of electricity in each direction.
At the same Black Sea energy conference, Romania’s Energy Ministry State Secretary Dan Dragos Dragan told NE Global the submarine electric cable between Georgia and Romania, “is an important project which will bring additional renewable energy sources to the European consumers, and this is only part of the strategy of diversifying the renewable sources and the energy sources that are coming to Europe.”
Romania as a new regional energy hub
He explained that the cable would reach Constanta, a major Romanian port on the Black Sea, and from Constanta there will be another project that will bring the electricity from Constanta up to the Hungarian border to facilitate this transfer of electricity from Caspian area to other parts of Central and Eastern Europe. “It will start from Azerbaijan to Georgia undersea on the Black Sea and from Constanta it will be on land and will go up to the Hungarian border,” he said.
Romania’s Energy Ministry State Secretary argued that the Black Sea electric cable could help bring additional electricity to Romania’s neighbors in Moldova and the Western Balkans, and, of course, to Ukraine – it will help start rebuilding Ukraine’s energy system and the reconstruction of the country.
Romania wants to boost its role as a regional energy security provider, Dragan said, adding that his country has been a net exporter of electricity. “We want to boost our investment in all kinds of renewables and, we will continue for bringing also some new flexible and efficient CGTs (combined cycle power plants) to balance the grid in the region and to re-emerge as a net exporter of electricity. Due to very good wind conditions, we succeeded to export these days a lot of volumes to our neighboring countries bringing stability also to countries that are in not very good position right now and here I’m referring to Moldova and Ukraine,” Dragan said.
He stressed, however, that Romania would continue to use natural gas to meet its domestic needs and in order to balance the grid. “We’re seeing gas as a transition fuel. We have significant internal resources covering almost 80-85% of our needs today for domestic production. We see that natural gas will represent this decade a very important instrument to balance all the renewables that are going to be connected to the grid,” he said.
Dragan warned about replacing one dependency with another. “I’m referring here mostly to green hydrogen. It’s important to develop inside the European Union facilities for the production also for green hydrogen,” he said, adding that his country has already signed the first contract for electrolyzers that we are going to use for certified electricity to produce green hydrogen.