Alberta changing how it produces and pays for electricity

FPL Hurricane Surcharge explained: restoration costs, Florida PSC review, rate impacts, grid resilience, and transparency after Hurricanes Debby and Helene as FPL funds infrastructure hardening and rapid storm recovery across Florida.

Key Points

A fee by Florida Power & Light to recoup hurricane restoration costs, under Florida PSC review for consumer fairness.

✅ Funds Debby and Helene restoration, materials, and crews

✅ Reviewed by Florida PSC for consumer protection and fairness

✅ Raises questions on grid resilience, transparency, and renewables

In the aftermath of recent hurricanes, Florida Power & Light (FPL) is under scrutiny as it implements a rate surcharge, alongside proposed rate hikes that span multiple years, to help cover the costs of restoration and recovery efforts. The surcharges, attributed to Hurricanes Debby and Helene, have stirred significant debate among consumers and state regulators, highlighting the ongoing challenges of hurricane preparedness and response in the Sunshine State.

Hurricanes are a regular threat in Florida, and FPL, as the state's largest utility provider, plays a critical role in restoring power and services after such events. However, the financial implications of these natural disasters often leave residents questioning the fairness and necessity of additional charges on their monthly bills. The newly proposed surcharge, which is expected to affect millions of customers, has ignited discussions about the adequacy of the company’s infrastructure investments and its responsibility in disaster recovery.

FPL’s decision to implement a surcharge comes as the company faces rising operational costs due to extensive damage caused by the hurricanes. Restoration efforts are not only labor-intensive but also require significant investment in materials and equipment to restore power swiftly and efficiently. With the added pressures of increased demand for electricity during peak hurricane seasons, utilities like FPL must navigate complex financial landscapes, similar to Snohomish PUD's weather-related rate hikes seen in other regions, while ensuring reliable service.

Consumer advocacy groups have raised concerns over the timing and justification for the surcharge. Many argue that frequent rate increases following natural disasters can strain already financially burdened households, echoing pandemic-related shutoff concerns raised during COVID that heightened energy insecurity. Florida residents are already facing inflationary pressures and rising living costs, making additional surcharges particularly difficult for many to absorb. Critics assert that utility companies should prioritize transparency and accountability, especially when it comes to costs incurred during emergencies.

The Florida Public Service Commission (PSC), which regulates utility rates and services, even as California regulators face calls for action amid soaring bills elsewhere, is tasked with reviewing the surcharge proposal. The commission’s role is crucial in determining whether the surcharge is justified and in line with the interests of consumers. As part of this process, stakeholders—including FPL, consumer advocacy groups, and the general public—will have the opportunity to voice their opinions and concerns. This input is essential in ensuring that the commission makes an informed decision that balances the utility’s financial needs with consumer protection.

In recent years, FPL has invested heavily in strengthening its infrastructure to better withstand hurricane impacts. These investments include hardening power lines, enhancing grid resilience, and implementing advanced technologies for quicker recovery, with public outage prevention tips also promoted to enhance preparedness. However, as storms become increasingly severe due to climate change, the question arises: are these measures sufficient? Critics argue that more proactive measures are needed to mitigate the impacts of future storms and reduce the reliance on post-disaster rate increases.

Additionally, the conversation around climate resilience is becoming increasingly prominent in discussions about energy policy in Florida. As extreme weather events grow more common, utilities are under pressure to innovate and adapt their systems. Some experts suggest that FPL and other utilities should explore alternative strategies, such as investing in decentralized energy resources like solar and battery storage, even as Florida declined federal solar incentives that could accelerate adoption, which could provide more reliable service during outages and reduce the overall strain on the grid.

The issue of rate surcharges also highlights a broader conversation about the energy landscape in Florida. With a growing emphasis on renewable energy and sustainability, consumers are becoming more aware of the environmental impacts of their energy choices, and some recall a one-time Gulf Power bill decrease as an example of short-term relief. This shift in consumer awareness may push utilities like FPL to reevaluate their business models and explore more sustainable practices that align with the public’s evolving expectations.

As FPL navigates the complexities of hurricane recovery and financial sustainability, the impending surcharge serves as a reminder of the ongoing challenges faced by utility providers in a climate-volatile world. While the need for recovery funding is undeniable, the manner in which it is implemented and communicated will be crucial in maintaining public trust and ensuring fair treatment of consumers. As discussions unfold in the coming weeks, all eyes will be on the PSC’s decision and FPL’s approach to balancing recovery efforts with consumer affordability.

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ICT Electricity Demand is surging as data centers, 5G, IoT, and server farms expand, straining grids, boosting carbon emissions, and challenging climate targets unless efficiency, renewable energy, and smarter cooling dramatically improve.

Key Points

ICT electricity demand is power used by networks, devices, and data centers across the global communications sector.

✅ Projected to reach up to 20 percent of global electricity by 2025

✅ Driven by data centers, 5G traffic, IoT, and high-res streaming

✅ Mitigation: efficiency, renewable PPAs, advanced cooling, workload shifts

The communications industry could use 20% of all the world’s electricity by 2025, hampering attempts to meet climate change targets, even as countries like New Zealand's electrification plans seek broader decarbonization, and straining grids as demand by power-hungry server farms storing digital data from billions of smartphones, tablets and internet-connected devices grows exponentially.

The industry has long argued that it can considerably reduce carbon emissions by increasing efficiency and reducing waste, but academics are challenging industry assumptions. A new paper, due to be published by US researchers later this month, will forecast that information and communications technology could create up to 3.5% of global emissions by 2020 – surpassing aviation and shipping – and up to 14% 2040, around the same proportion as the US today.

Global computing power demand from internet-connected devices, high resolution video streaming, emails, surveillance cameras and a new generation of smart TVs is increasing 20% a year, consuming roughly 3-5% of the world’s electricity in 2015, says Swedish researcher Anders Andrae.

In an update o a 2016 peer-reviewed study, Andrae found that without dramatic increases in efficiency, the ICT industry could use 20% of all electricity and emit up to 5.5% of the world’s carbon emissions by 2025. This would be more than any country, except China, India and the USA, where China's data center electricity use is drawing scrutiny.

He expects industry power demand to increase from 200-300 terawatt hours (TWh) of electricity a year now, to 1,200 or even 3,000TWh by 2025. Data centres on their own could produce 1.9 gigatonnes (Gt) (or 3.2% of the global total) of carbon emissions, he says.

“The situation is alarming,” said Andrae, who works for the Chinese communications technology firm Huawei. “We have a tsunami of data approaching. Everything which can be is being digitalised. It is a perfect storm. 5G [the fifth generation of mobile technology] is coming, IP [internet protocol] traffic is much higher than estimated, and all cars and machines, robots and artificial intelligence are being digitalised, producing huge amounts of data which is stored in data centres.”

US researchers expect power consumption to triple in the next five years as one billion more people come online in developing countries, and the “internet of things” (IoT), driverless cars, robots, video surveillance and artificial intelligence grows exponentially in rich countries.

The industry has encouraged the idea that the digital transformation of economies and large-scale energy efficiencies will slash global emissions by 20% or more, but the scale and speed of the revolution has been a surprise.

Global internet traffic will increase nearly threefold in the next five years says the latest Cisco Visual Networking Index, a leading industry tracker of internet use.

“More than one billion new internet users are expected, growing from three billion in 2015 to 4.1bn by 2020. Over the next five years global IP networks will support up to 10bn new devices and connections, increasing from 16.3bn in 2015 to 26bn by 2020,” says Cisco.

A 2016 Berkeley laboratory report for the US government estimated the country’s data centres, which held about 350m terabytes of data in 2015, could together need over 100TWh of electricity a year by 2020. This is the equivalent of about 10 large nuclear power stations.

Data centre capacity is also rocketing in Europe, where the EU's plan to double electricity use by 2050 could compound demand, and Asia with London, Frankfurt, Paris and Amsterdam expected to add nearly 200MW of consumption in 2017, or the power equivalent of a medium size power station.

“We are seeing massive growth of data centres in all regions. Trends that started in the US are now standard in Europe. Asia is taking off massively,” says Mitual Patel, head of EMEA data centre research at global investment firm CBRE.

“The volume of data being handled by such centres is growing at unprecedented rates. They are seen as a key element in the next stage of growth for the ICT industry”, says Peter Corcoran, a researcher at the university of Ireland, Galway.

Using renewable energy sounds good but no one else benefits from what will be generated, and it skews national attempts to reduce emissions

Ireland, which with Denmark is becoming a data base for the world’s biggest tech companies, has 350MW connected to data centres but this is expected to triple to over 1,000MW, or the equivalent of a nuclear power station size plant, in the next five years.

Permission has been given for a further 550MW to be connected and 750MW more is in the pipeline, says Eirgrid, the country’s main grid operator.

“If all enquiries connect, the data centre load could account for 20% of Ireland’s peak demand,” says Eirgrid in its All-Island Generation Capacity Statement 2017-2026  report.

The data will be stored in vast new one million square feet or larger “hyper-scale” server farms, which companies are now building. The scale of these farms is huge; a single $1bn Apple data centre planned for Athenry in Co Galway, expects to eventually use 300MW of electricity, or over 8% of the national capacity and more than the daily entire usage of Dublin. It will require 144 large diesel generators as back up for when the wind does not blow.

 Facebook’s Lulea data centre in Sweden, located on the edge of the Arctic circle, uses outside air for cooling rather than air conditioning and runs on hydroelectic power generated on the nearby Lule River. Photograph: David Levene for the Guardian

Pressed by Greenpeace and other environment groups, large tech companies with a public face , including Google, Facebook, Apple, Intel and Amazon, have promised to use renewable energy to power data centres. In most cases they are buying it off grid but some are planning to build solar and wind farms close to their centres.

Greenpeace IT analyst Gary Cook says only about 20% of the electricity used in the world’s data centres is so far renewable, with 80% of the power still coming from fossil fuels.

“The good news is that some companies have certainly embraced their responsibility, and are moving quite aggressively to meet their rapid growth with renewable energy. Others are just growing aggressively,” he says.

Architect David Hughes, who has challenged Apple’s new centre in Ireland, says the government should not be taken in by the promises.

“Using renewable energy sounds good but no one else benefits from what will be generated, and it skews national attempts to reduce emissions. Data centres … have eaten into any progress we made to achieving Ireland’s 40% carbon emissions reduction target. They are just adding to demand and reducing our percentage. They are getting a free ride at the Irish citizens’ expense,” says Hughes.

Eirgrid estimates indicate that by 2025, one in every 3kWh generated in Ireland could be going to a data centre, he added. “We have sleepwalked our way into a 10% increase in electricity consumption.”

Fossil fuel plants may have to be kept open longer to power other parts of the country, and manage issues like SF6 use in electrical equipment, and the costs will fall on the consumer, he says. “We will have to upgrade our grid and build more power generation both wind and backup generation for when the wind isn’t there and this all goes onto people’s bills.”

Under a best case scenario, says Andrae, there will be massive continuous improvements of power saving, as the global energy transition gathers pace, renewable energy will become the norm and the explosive growth in demand for data will slow.

But equally, he says, demand could continue to rise dramatically if the industry keeps growing at 20% a year, driverless cars each with dozens of embedded sensors, and cypto-currencies like Bitcoin which need vast amounts of computer power become mainstream.

“There is a real risk that it all gets out of control. Policy makers need to keep a close eye on this,” says Andrae.

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CAISO Net Negative Emissions signal moments when greenhouse gas intensity of serving ISO demand drops below zero, driven by high renewable generation, low load, strong solar exports, and imports accounting in the California grid.

Key Points

Moments when CAISO's CO2 to serve demand is below zero, driven by renewables, exports, and import accounting.

✅ Calculated using imports and exports to serve ISO demand

✅ Occur during high solar output, low weekend load

✅ Coincide with curtailment and record renewable penetration

We’re a long way from the land of milk and honey, but on Easter Sunday – for about an hour – we got a taste.

On Sunday, at 1:55 PM Pacific Time the California Independent Systems Operator (CAISO) reported that greenhouse gas emissions necessary to serve its demand (~80% of California’s electricity demand on an annual basis), was measured at a rate -16 metric tons of CO2 per hour. Five minutes later, the value was -2 mTCO2/h, before it crept back up to 40 mTCO2/h at 2:05 PM PST. At 2:10 PST though it fell back to -86 mTCO2/h and stayed negative until 3:05 PM PST, even as global CO2 emissions flatlined in 2019 according to the IEA.

This information was brought to the attention of pv magazine via tweet from eagle eye Jon Pa after CAISO’s site first noted the negative values:

The region was still generating CO2 though, as natural gas, biogas, biomass, geothermal and even coal plants were running and pumping out emissions, even as potent greenhouse gases declined in the US under control efforts. CAISO’s Greenhouse Gas Emission Tracking Methodology, December 28, 2016 (pdf) notes the below calculations to create the value what it terms, “Total GHG emissions to serve ISO demand”:

Of importance to note is that to get to the net negative value, CAISO considered all electricity imports and exports, a reminder that climate policy shapes grid operations across North America. And as can be noted in the image below the CO2 intensity of imports during the day rapidly declined as the sun came up, first going negative around 9:05 AM PST, and mostly staying so until just before 6 PM PST.

During this same weekend, other records were noted (reiterating that we’re in record setting season and as the state pursues its 100% carbon-free mandate now in law) such as a new electricity export record of greater than 2 GW and total renewable electricity as part of total demand at greater than 70%.

At the peak negative moment of 2:15 PM PST, -112 mTCO2/h seen below, the total amount of clean instantaneous generation being used in the power grid region was 17 GW, a far cry from heat-driven reliability strains like rolling blackout warnings that arise during extreme demand, with renewables giving 76% of the total, hydro 14%, nuclear 13% and imports of -12% countering the CO2 coming from just over 1.4 GW of gas generation.

Also of importance are a few layers of nuance in the electricity demand charts. First off we’re in the shoulder seasons  of California – nice cool weather before the warmth of summer drives air conditioning demand. Additional the weekend electricity demand is always lower, as well, Easter Sunday might have had an affect, whereas in colder regions Calgary’s electricity use can soar during frigid snaps.

Lastly to note was the amount of electricity from solar and wind generation being curtailed. And while the Sunday numbers weren’t available yet, the below image noted Saturday with 10 GWh in total being curtailed (pdf) – peaking at over 3.2 GW of instantaneous mostly solar power even as solar is now the cheapest electricity according to the IEA, in the hours of 2 and 3 PM PST. On an annualized basis, less than 2% of total potential solar electricity was curtailed in 2018.

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U.S. Power Grid Cybersecurity combats DHS-FBI flagged threats to energy infrastructure, with PJM Interconnection using ICS/SCADA segmentation, phishing defenses, incident response, and resilience exercises against Russia-linked attacks and pipeline intrusions.

Key Points

Strategies, controls, and training that protect U.S. electric infrastructure from cyber threats and disruptions.

✅ ICS/SCADA network segmentation and zero-trust architecture

✅ Employee phishing drills and incident response playbooks

✅ DOE-led grid exercises and threat intelligence sharing

The joint alert from the FBI and Department of Homeland Security last month warning that Russia was hacking into critical U.S. energy infrastructure, as outlined in six essential reads on Russian hacks from recent coverage, came as no surprise to the nation’s largest grid operator, PJM Interconnection.

“You will never stop people from trying to get into your systems. That isn’t even something we try to do.” said PJM Chief Information Officer, Tom O’Brien. “People will always try to get into your systems. The question is, what controls do you have to not allow them to penetrate? And how do you respond in the event they actually do get into your system?”

PJM is the regional transmission organization for 65 million people, covering 13 states, including Pennsylvania, and Washington D.C.

On a rainy day in early April, about 10 people were working inside PJM’s main control center, outside Philadelphia, closely monitoring floor-to-ceiling digital displays showing real-time information from the electric power sector throughout PJM’s territory in the mid-Atlantic and parts of the midwest, amid reports that hackers accessed control rooms at U.S. utilities.

#google#

Donnie Bielak, a reliability engineering manager, was overseeing things from his office, perched one floor up.

“This is a very large, orchestrated effort that goes unnoticed most of the time,” Bielak said. “That’s a good thing.”

But the industry certainly did take notice in late 2015 and early 2016, when hackers successfully disrupted power to the Ukrainian grid. The outages lasted a few hours and affected about 225,000 customers. It was the first publicly-known case of a cyber attack causing major disruptions to a power grid. It was widely blamed on Russia.

One of the many lessons of the Ukraine attacks was a reminder to people who work on critical infrastructure to keep an eye out for odd communications.

“A very large percentage of entry points to attacks are coming through emails,” O’Brien said. “That’s why PJM, as well as many others, have aggressive phishing campaigns. We’re training our employees.”

O’Brien doesn’t want to get into specifics about how PJM deals with cyber threats. But one common way to limit exposure is by having separate systems: For example, industrial controls in a power plant are not connected to corporate business networks, a separation underscored after breaches at U.S. power plants prompted reviews across the sector.

Since 2011, North American grid operators and government agencies have also done large, security exercises every two years. Thousands of people practice how they’d respond to a coordinated physical or cyber event, including rising substation attacks that highlight resilience gaps.

So far, nothing like that has happened in the U.S. It’s possible, but not likely, according to Robert M. Lee, a former military intelligence analyst, who runs the industrial cybersecurity firm Dragos.

“The more complex the system, the harder it is to have a scalable attack,” said Lee, who co-authored a report analyzing the Ukraine attacks. “If you wanted to take out a power generation station– that isn’t the most complex thing. Let’s say you cause an hour of outage. But now you want to cause two months of outages? That’s an exponential increase in effort required.”

For example, he said, it would very difficult for hackers to knock out power to the entire east coast for a long time. But briefly disrupting a major city is easier. That’s the sort of thing that keeps him up at night.

“I worry about an adversary getting into, maybe, Washington D.C.’s portion of the grid, taking down power for 30 minutes,” he said.

The Department of Energy is creating a new office focused on cybersecurity and emergency response, following the U.S. government’s condemnation of power grid hacking by Russia.

Deterrence may be one reason why there has not yet been a major attack on the U.S. grid, said John MacWilliams, a former senior DOE official who’s now a fellow at Columbia University’s Center on Global Energy Policy.

“That’s obviously an act of war,” he said. “We have the capability of responding either through cyber mechanisms or kinetic military.”

In the meantime, small-scale incidents keep happening.

This spring, another cyber attack targeted natural gas pipelines. Four companies shut down their computer systems, just in case, but they say no service was disrupted.

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Maryland Community Solar Program enables renters and condo residents to subscribe to offsite solar, earn utility bill discounts, and support projects across BGE, Pepco, Delmarva, and Potomac Edison territories, with low to moderate income participation.

Key Points

A pilot allowing residents to subscribe to offsite solar and get bill credits and savings, regardless of home ownership.

✅ 5-10 percent discounts on standard utility rates

✅ Available in BGE, Pepco, Delmarva, Potomac Edison areas

✅ Includes low and moderate income subscriber carve-outs

Maryland has launched a pilot program that will allow anyone to power their home with solar panels — even if they are renters or condo-dwellers, or live in the shade of trees.

Solar developers are looking for hundreds of residents to subscribe to six power projects planned across the state, including recently announced sites in Owings Mills and Westminster. Their offers include discounts on standard electric rates.

The developers need a critical mass of customers who are willing to buy the projects’ electricity before they can move forward with plans to install solar panels on about 80 acres. Under state rules, the customer base must include low- and moderate-income residents, many of whom face energy insecurity challenges.

The idea of the community solar program is to tap into the pool of residential customers who don’t want to get their energy from fossil fuels but currently have no way to switch to a cleaner alternative.

That could significantly expand demand for solar projects, said Gary Skulnik, a longtime Maryland solar entrepreneur.

Skulnik is now CEO of Neighborhood Sun, a company recruiting customers for the six projects.

“You’re signing up for a project that won’t exist unless we get enough subscribers,” Skulnik said. “You’re actually getting a new project built.”

It could also stoke simmering conflicts over what sort of land is appropriate for solar development.

The General Assembly authorized the community solar pilot program in 2015. But not-in-my-backyard opposition and concerns about the loss of agricultural land have slowed progress.

Community solar could force more communities to confront those sorts of clashes — and to consider more carefully where solar farms belong.

“We are going to see a lot more solar development in the state,” said Megan Billingsley, assistant director of the Valleys Planning Council in Baltimore County. “One of the things we haven’t seen is any direction or thoughtful planning on where we want to see solar development.”

The General Assembly authorized about 200 megawatts in community solar projects — enough to power about 40,000 households — over three years.

Customers can sign up for projects built within the territory of their electric utility. About half of that solar energy load has been allotted for the region served by Baltimore Gas and Electric Co.

By subscribing to a community solar project, customers won’t actually be getting their electricity from its photovoltaic panels. But their payments will help finance it and, in some cases, complementary battery storage solutions as well.

The Public Service Commission has approved six projects so far: Two in BGE territory, in Owings Mills and near Westminster; one in Pepco territory, in Prince George’s County; two in Delmarva Power and Light territory, in Caroline and Worcester counties; and one in Potomac Edison territory, in Washington County where planning officials have developed proposed recommendations.

More projects are expected to win approval in the next two years.

But none of them can be built unless they catch on with electricity customers. The developers are looking for 2,600 customers statewide.

Skulnik would not say how many customers an individual project needs to get the green light. But he said that the Prince George’s proposal, a 25-acre array atop a Fort Washington landfill is the closest, with about 100 subscribers so far.

The terms of subscription vary by project, but discounts range from 5 percent to 10 percent off utility rates. Customers are asked to commit to the projects for as long as 25 years. (They can break the contracts with advance notice, or if they move to a different utility service area.)

Maryland joins more than a dozen states in advancing community solar projects, as scientists work to improve solar and wind power technology.

Corey Ramsden is an executive for Solar United Neighbors, a nonprofit that promotes the solar industry in eight states and the District of Columbia.

He said potential customers are often confused by the mechanics of subscribing to community solar, or hesitant to commit for years or even decades. The industry is working to answer questions and get people more comfortable with the idea, he said.

But it has been a challenge across the country, including debates over New England grid upgrades, and in Maryland. Advocates for solar say there is broad support for renewable energy generation. The state has set goals to increase green energy use and reduce greenhouse gas emissions.

Still, many Marylanders don’t welcome the reality when a project attempts to move in.

Rural land is often the most desirable for solar developers, because it requires the least effort to prepare for an array of panels. But community groups in those areas have asked whether land historically used for farming is right for a more industrial use.

“People are very much in favor of going for a lot more renewables, for whatever reason,” said Dru Schmidt-Perkins, the former president of the land conservation group 1,000 Friends of Maryland. “That support comes to a screeching halt when land that is perceived to be valuable for other things, whether a historic view­shed or farming, suddenly becomes a target of a location for this new project.”

Such concerns have at least temporarily stalled the momentum for solar across the state. Anne Arundel County had at least five small community solar projects in the pipeline in December when officials decided to pause development for eight months. Baltimore County officials imposed a four-month moratorium on solar development before passing an ordinance last year to limit the size and number of solar farms.

Billingsley said the Valley Plannings Council, which advocates for historic and rural areas in western Baltimore County, is frustrated that there hasn’t been more discussion about which areas the county should target for solar development — and which it shouldn’t.

She said she fears that pressure to expand solar farms across rural lands is only going to grow as community solar projects launch, and as lawmakers in Annapolis talk about more policies to promote investment in renewable energy.

Schmidt-Perkins called community solar “an amazing program” for those who would install solar panels on their roofs if they could. But she said its launch heightens the importance of discussions about a broader solar strategy.

“Most communities are caught a little flat-footed on this and are somewhat at the mercy of an industry that’s chomping at the bit,” she said. “It’s time for Maryland to say, ‘Okay, let’s come up with our plan so that we know how much solar can we really generate in this state on lands that are not conflict-based.’”

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Georgia Electricity Imports October 2017 surged as hydropower output fell and thermal power plants underperformed; ESCO balanced demand via low-cost imports, mainly from Azerbaijan, amid rising tariffs, kWh consumption growth, and a widening generation-consumption gap.

Key Points

They mark a record import surge due to costly local generation, lower hydropower, ESCO balancing costs, and rising demand.

✅ Imports rose 832% YoY to 157 mln kWh, mainly from Azerbaijan

✅ TPP output fell despite capacity; only low-tariff plants ran

✅ Balancing price 13.8 tetri/kWh signaled costly domestic PPAs

In October 2017, Georgian power plants generated 828 mln. KWh of electricity, marginally up (+0.79%) compared to September. Following the traditional seasonal pattern and amid European concerns over dispatchable power shortages affecting markets, the share of electricity produced by renewable sources declined to 71% of total generation (87% in September), while thermal power generation’s share increased, accounting for 29% of total generation (compared to 13% in September). When we compare last October’s total generation with the total generation of October 2016, however, we observe an 8.7% decrease in total generation (in October 2016, total generation was 907 mln. kWh). The overall decline in generation with respect to the previous year is due to a simultaneous decline in both thermal power and hydro power generation. 

Consumption of electricity on the local market in the same period was 949 mln. kWh (+7% compared to October 2016, and +3% with respect to September 2017), and reflected global trends such as India's electricity growth in recent years. The gap between consumption and generation increased to 121 mln. kWh (15% of the amount generated in October), up from 100 mln. kWh in September. Even more importantly, the situation was radically different with respect to the prior year, when generation exceeded consumption.

The import figure for October was by far the highest from the last 12 years (since ESCO was established), occurring as Ukraine electricity exports resumed regionally, highlighting wider cross-border dynamics. In October 2017, Georgia imported 157 mln. kWh of electricity (for 5.2 ¢/kWh – 13 tetri/kWh). This constituted an 832% increase compared to October 2016, and is about 50% larger than the second largest import figure (104.2 mln. kWh in October 2014). Most of the October 2017 imports (99.6%) came from Azerbaijan, with the remaining 0.04% coming from Russia.

The main question that comes to mind when observing these statistics is: why did Georgia import so much? One might argue that this is just the result of a bad year for hydropower generation and increased demand. This argument, however, is not fully convincing. While it is true that hydropower generation declined and demand increased, the country’s excess demand could have been easily satisfied by its existing thermal power plants, even as imported coal volumes rose in regional markets. Instead of increasing, however, the electricity coming from thermal power plants declined as well. Therefore, that cannot be the reason, and another must be found. The first that comes to mind is that importing electricity may have been cheaper than buying it from local TPPs, or from other generators selling electricity to ESCO under power purchase agreements (PPAs). We can test the first part of this hypothesis by comparing the average price of imported electricity to the price ceiling on the tariff that TPPs can charge for the electricity they sell. Looking at the trade statistics from Geostat, the average price for imported electricity in October 2017 remained stable with respect to the same month of the previous year, at 5.2 ¢ (13 tetri) per kWh. Only two thermal power plants (Gardabani and Mtkvari) had a price ceiling below 13 tetri per kWh. Observing the electricity balance of Georgia, we see that indeed more than 98% of the electricity generated by TPPs in October 2017 was generated by those two power plants.

What about other potential sources of electricity amid Central Asia's power shortages at the time? To answer this question, we can use the information derived from the weighted average price of balancing electricity. Why balancing electricity? Because it allows us to reconstruct the costs the market operator (ESCO) faced during the month of October to make sure demand and supply were balanced, and it allows us to gain an insight about the price of electricity sold through PPAs.

ESCO reports that the weighted average price of balancing electricity in October 2017 was 13.8 tetri/kWh, (25% higher than in October 2016, when it was below the average weighted cost of imports – 11 vs. 13 – and when the quantity of imported electricity was substantially smaller). Knowing that in October 2017, 61% of balancing electricity came from imports, while 39% came from hydropower and wind power plants selling electricity to ESCO under their PPAs, we can deduce that in this case, internal generation was (on average) also substantially more expensive than imports. Therefore, the high cost of internally generated electricity, rather than the technical impossibility of generating enough electricity to satisfy electricity demand, indeed appears to be one the main reasons why electricity imports spiked in October 2017.

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