Georgia, Russia, Armenia and Iran agree to create a single common electricity market

Energy Charter Conference in Tbilisi. December 4, 2015

According to sources, on April 13, the ministers of Energy of Georgia, Russia, Armenia and Iran met in the Armenian capital of Yerevan, where they agreed to create a single, common electricity market among these countries. For this purpose, bilateral Russia-Georgia, Armenia-Georgia, and Armenia-Iran projects are being planned to expand the capabilities of the four neighbours’ energy systems.

The Russia-Georgia project envisages synchronizing the two countries’ electricity grids. The Georgia-Armenia project aims to build transborder power lines and will be completed by the end of 2018. The Armenia-Iran project foresees construction of a 400-kilovolt electricity line that will supply Iran with Armenian electricity in exchange for Iranian natural gas being sent to the Yerevan Thermal Power Plant. The project will be finished by the end of 2017. Once all these projects are completed, the electricity networks of the four countries will be able to coordinate an energy capacity of 1,200 megawatts (MW), enough for commercial, barter and any other type of supply.

Experts on Caucasian issues consider that these energy projects will undoubtedly bring the four countries closer, facilitating not only energy, but also overall economic cooperation and integration in the Caucasus region. Economic cooperation never exists in isolation. It tends to be driven by deeper, often political, processes.

«Russia use any means at its disposal to solidify its influence in the Caucasus and beyond in Eurasia. The recently agreed-to quadrilateral energy market seems designed to advance this goal. First and foremost, it creates a huge space for energy (and hence, economic) cooperation, stretching from Russia to Iran, in which Russia, simply because of its size, will almost certainly dominate,» analysts said.

As well, «it locks Georgia into energy cooperation, and possibly future energy dependence, with Russia, from which the country managed to detach itself after much hardship from 2004–2008. Economic benefits of this renewed cooperation with Moscow are far from clear, and the Georgian government has yet to provide any satisfactory explanations for this policy course to the Georgian public. The political rationale also seems rather perplexing, given that 20 percent of Georgia’s territory remains under Russian military occupation. It is difficult to argue that energy cooperation with Russia will do anything to restore Georgia’s territorial integrity in the medium or long term. Above all, Russia’s long-standing record of being an unreliable energy partner to Georgia and Europe more generally, gives no guarantee that the past will not repeat itself,» they added.

The EU and Georgia signed an Association Agreement in June 2014. I've requested both, the Delegation of the EU to Georgia and the Georgian Ministry of Energy, the confirmation of the new without response.