Black Sea submarine cable - the way to Georgia's economic recover

Abstract

  In June 2020, the World Bank studied and, based on preliminary economic analysis, confirmed the feasibility of the strategic project of the 21st century - the laying of an underwater cable in the Black Sea.

         On December 17, 2022, the leaders of Georgia, Azerbaijan, Romania and Hungary signed an agreement on "strategic partnership in the field of green energy development and transmission".

The project of the Black Sea submarine cable envisages the arrangement of an underwater high-voltage transmission network, which should connect the electrical energy systems of Georgia and Europe.

If the project is implemented, a 1,195-kilometer cable (1,100 km underwater, and 95 km on land) will connect to Romania, which will allow the countries of the South Caucasus and Romania to take advantage of the expanded export opportunities and trade in electricity, taking into account the hourly prices of the electricity market.

The implementation of the project will help strengthen the energy security of Europe and the South Caucasus region, develop the renewable energy sector and increase the transit opportunities between the mentioned regions.

The purpose of our research is to determine in advance what economic benefits Georgia will receive during the implementation of this important project, and we will be able to export the energy of renewable resources of our country (the European market is opening for us), if we remain only as a transit corridor, which is also very attractive, although less profitable.

While working on the article, we evaluated the potential of Georgia's renewable, non-traditional energy sources, their target indicators and characteristics. Based on the researched information, we developed conclusions and recommendations.