Georgia's Tourism Sector - Tourism Market Watch | December 2016
10 Jan, 2017
The number of international arrivals was up 4.3% y/y to 0.49mn in December 2016. Out of the top five source markets, there was growth from Armenia (+9.5% y/y), Azerbaijan (+3.9% y/y), and Ukraine (+14.0% y/y), while arrivals were down from Russia (-2.3% y/y) and Turkey (-16.7% y/y). Arrivals from the EU were up 28.6% y/y to over 13,400 visitors.
The number of international arrivals was up 7.6% y/y to 6.35 mn visitors in 2016. The number of visitors increased from all major countries except for Turkey (-9.9% y/y) in 2016. Russia and Ukraine posted double-digit growth rates, while Azerbaijan (+9.3% y/y) was the single largest contributor to overall growth. Travel inflows were up 11.7% y/y to US$ 1.68bn in 3Q16. Based on our estimates, travel inflows will reach approximately US$ 2.1bn in FY16.
While the top four source markets accounted for 83.6% of international arrivals in 2016, secondary source markets also posted robust performances. Ukraine, the 5th largest source market, posted a 21.9% y/y increase in 2016. The number of Iranian visitors is up almost 5.9x to 148,000, while the number of Israeli visitors during the same period is up 1.6x to over 92,000 visitors.
The tourist category continues to drive arrival growth in December 2016. The number of overnight visitors (‘tourist’ category) was up 14.8% y/y and accounted for 36.6% of total international arrivals. Same-day arrivals posted modest growth of 5.1% y/y, while the number of transit visitors declined 15.8% y/y in December 2016. The number of tourist arrivals is up 19.0% y/y to 2.7mn in 2016, compared to 2.3mn in 2015. The number of same-day visitors is up 4.4% y/y, while the number of transit visitors is down 5.7% y/y in 2016.
Georgia's Energy Sector - Electricity Market Watch | November 2016
29 Dec, 2016
New Year - new tariffs. GNERC has announced new tariffs for certain HPPs and TPPs, as well as for commercial users of Telasi and Energo-Pro; residential tariffs remain unchanged in 2017.
Enguri and Vardnili tariffs were revised for the first time since 2006. The tariff was increased to 1.496 tetri/kWh (from 1.187 tetri) for Enguri and to 2.88 tetri/kWh (from 1.17 tetri) for Vardnili. Enguri and Vardnili are the largest state-owned HPPs, generating 38.9% of total and 51.7% of hydro generation, on average. Tariffs were revised for ten other HPPs (all owned by Energo-Pro), which together accounted for 18.1% of total generation in 11M16. Only one of them got a tariff increase, while tariffs were lowered by 12.5%, on average, for the remainder.
Tariffs were revised upward for all TPPs for the year 2017. Revisions varied from a 13.5% increase for the Gardabani CCGT to a 66.9% increase for GPower. The highest tariff (14.234 tetri/kWh) was received by Blocks 3 and 4, owned by Georgian International Energy Corporation Ltd (GIEC). According to Market Rules, this tariff is the new balancing electricity price that deregulated power plants will receive for electricity sold to ESCO without a contract September through April. The guaranteed capacity fee, received by TPPs for the number of days they are on standby, was decreased for Block 3 (-23.8%), Block 4 (-30.6%), and the Gardabani CCGT (-6.1%), while it was increased for Block 9 (+10.5%) and GPower (+1.4%). The guaranteed capacity payments are collected by ESCO from all consumers and exporters in proportion to their consumption or export.
Domestic consumption increased 11.5% y/y in November 2016, with Telasi and other DNOs driving the growth. DNO consumption was up 14.0% y/y, with the greater Tbilisi area (Telasi subscribers) posting an outsized 21.5% y/y growth rate. Usage of Energo-Pro subscribers was up 10.3% y/y, while Kakheti Energy Distribution usage was up 5.9% y/y. Consumption of the Abkhazian region was up 10.4% y/y, following a 20.8% y/y increase in October 2016. Eligible consumer usage was down 4.3% y/y from an already very low base in November 2015 (-32.7% y/y). Consumption by Georgian Manganese, the largest direct consumer (73.9% of direct consumption), was up 1.7% y/y from the November 2015 low base (-35.7 % y/y). Consumption by GWP, the second-largest direct consumer (24.8% of direct consumption), declined 6.3% y/y.
Domestic consumption needs were met almost entirely by domestic generation in November 2016. Imports accounted for a mere 1.3% of total electricity supplied to the grid. The newly commissioned wind power plant generated 1.8gWh, accounting for 0.2% of total electricity supplied to the grid. Total generation increased 17.9% y/y, with HPP generation up 17.0% y/y (63.5% of total) and TPP generation up 18.9% y/y (35.0% of total). The main drivers of the increase in hydro generation were Enguri and Vardnili (+43.3% y/y). Electricity imports in November 2016 were down 84.8% y/y to 12.7gWh, with 76.4% coming from Azerbaijan and the rest from Russia. The GC fee was down 5.4% y/y to USc 0.8/kWh. Guaranteed capacity was provided by each of the five guaranteed capacity sources for most of the month. Mtkvari Energy and Gardabani CCGT operated at full power for the whole month, while Blocks 3 and 4 and GPower were mainly providing reserve for the system.
Wholesale market prices in Georgia decreased 21.2% y/y to USc 4.3/kWh, 9.0% below the Turkish market clearing price in November 2016. Turkish electricity prices decreased 0.2% y/y to USc 4.7/kWh from a significantly low base in November 2015 (-42.4% y/y). 16.2% of total electricity supplied to the grid in November 2016 was traded through the market operator, with the rest traded through bilateral contracts.
Georgia's Tourism Sector - Tourism Market Watch | November 2016
15 Dec, 2016
The number of international arrivals was up 5.1% y/y to 0.46mn in November 2016. Out of the top five source markets, there was strong growth from Armenia (+10.8% y/y), Russia (+9.8% y/y), and Ukraine (+15.9% y/y), while arrivals were down from Azerbaijan (-1.8% y/y) and Turkey (-12.1% y/y). Arrivals from the EU were up 26.0% y/y to over 14,000 visitors.
The number of international arrivals is up 7.9% y/y to 5.86mn visitors in 11M16. The number of visitors increased from all major countries except for Turkey in 11M16. Russia and Ukraine posted double-digit growth rates, while Azerbaijan (+9.8%) was the single largest contributor to overall growth. The number of Turkish visitors has been on the decline for six consecutive months, starting in June 2016, largely due to political unrest in the country, resulting in a 9.4% y/y drop in visitors in 11M16.
While the top four source markets accounted for 83.3% of international arrivals in 11M16, secondary source markets also posted robust performances. Georgia has benefited from visa-free travel reinstatement for Iranian citizens in February 2016, with the number of Iranian visitors increasing at triple-digit rates, compared to last year. The number of Iranian visitors in 11M16 is up almost 6.0x to 139,000. The number of Israeli visitors during the same period is up 1.5x to nearly 89,000 visitors. Ukraine, the 5th largest source market, posted a 22.4% y/y increase in 11M16, more than compensating for the 2015 drop in the number of Ukrainian visitors caused by political tension in the country.
Tourist arrivals continue to be the driver of growth in November 2016. The number of overnight visitors (‘tourist’ category) was up 14.1% y/y and accounted for 35.9% of total international arrivals. Same-day arrivals posted modest growth of 3.1% y/y, while the number of transit visitors decreased 4.5% y/y. The number of tourist arrivals is up 19.3% y/y in 11M16 to 2.54mn, compared to 2.13mn in 11M15. The number of same-day visitors is up 4.3% y/y in 11M16, while the number of transit visitors is down 5.0% y/y.
Georgia's Energy Sector - Electricity Market Watch | October 2016
14 Dec, 2016
The list of electricity exporters in 2017 is largely defined. Net Transfer Capacity (NTC) for the “Meskheti” transmission line connecting Georgia and Turkey was announced for the year 2017. Maximum capacity of the line is 700MW, but according to the Interconnection Operation Agreement, parties might limit transfer capacities on an annual basis. For the main export months of 2017, NTC was set at 250MW in May, 300MW in June, and 700MW in July. The line was allocated to the group of companies with long term transmission rights (TDA owners) and to Eastern Power Corporation Ltd. The latter secured its allocation via special auction (gcat.com.ge). The line is only partially utilized, leaving room for transit companies and other exporters willing to export to Turkey.
Allowed export volumes for 2017 have been announced by Georgian State Electrosystem (GSE). Export allocations for the summer months were set as follows: May - 35.6GWh, 48MW; June - 126.7GWh, 176MW; and July - 114.6GWh, 154MW. These amounts can be exported to any neighboring country, subject to auction allocation. The auction revealed that 10.3% of annual export volume will be directed to Armenia, while the export market and exporter identity for 38.7% of annual export capacity remains undetermined, to be allocated via auction.
Domestic consumption increased 13.0% y/y in October 2016, with Tbilisi and the Abkhazian region driving the growth. DNO consumption was up 13.2% y/y, with the greater Tbilisi area (Telasi subscribers) posting an outsized 24.9% y/y growth rate. Usage of Energo-Pro subscribers was up 8.0% y/y, while Kakheti Energy Distribution usage was up 5.0% y/y. Consumption of eligible consumers was largely flat, down 0.2% y/y from an already very low base in October 2015 (-42.4% y/y). Georgian Manganese drove the trend in direct consumption, up only 5.7% y/y from the October 2015 low base (-47.4% y/y). Consumption of the Abkhazian region was up 20.8% y/y, following a 17.3% y/y increase in September 2016. Electricity exports were negligible. A significant amount of electricity transit (130.6 GWh) took place from Azerbaijan to Turkey.
Domestic consumption needs were met almost entirely by domestic generation in October 2016, with imports accounting for a mere 1.8% of total electricity supplied to the grid. Total generation was up 14.4% y/y, with regulated HPP generation increasing 25.3% y/y and accounting for 86.9% of total hydro generation. Generation by Enguri and Vardnili was up 44.8% y/y, while generation by deregulated HPPs increased 1.7% y/y. TPP generation was roughly flat (-0.6% y/y). Guaranteed capacity was provided by each of the five guaranteed capacity sources for the entire month. The GC fee almost quadrupled (3.9x), to USc 0.92/kWh, compared to October 2015 and was up 8.3% m/m. Electricity imports in October 2016 were down 71.0% y/y, with Azerbaijan the sole source of imports.
Wholesale market prices in Georgia decreased 10.1% y/y to USc 4.7/kWh, 1.5% below the Turkish market clearing price in October 2016. Turkish electricity prices decreased 1.8% y/y to USc 4.7/kWh from a significantly low base in October 2015 (-31.3% y/y). 6.3% of total electricity supplied to the grid was traded through the market operator, with the rest traded through bilateral contracts.