Georgia Adopts Energy Efficiency Regulations

MG Law Office, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Ana Kochiashvili, Tamar Jikia, associate Mariam Kalandadze, Junior Associate Ana Jikia and Paralegal Lasha Machavariani is partnering with Georgia Today on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia. In particular, we will highlight significant issues which may impact businesses operating in Georgia.

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On 21 May 2020, the Parliament of Georgia adopted two new legal acts – the Law on Energy Efficiency and the Law on Energy Performance of Buildings (the New Laws). The New Laws constitute a part of the reform of the energy sector that the Government of Georgia (the Government) initiated recently. The reform is a result of the Deep and Comprehensive Free Trade Agreement (DCFTA) and membership of the Energy Community.

The adoption of the New Laws was not overlooked by the international organizations. The European Bank for Reconstruction and Development (EBRD) supported the drafting of a reform concept and welcomed the adoption of the New Laws. EBRD’s Regional Director for the Caucasus stated: “It is an outstanding achievement for Georgia. The legislation opens new investment opportunities with greener technologies while boosting the usage of energy from ecologically cleaner sources.” EBRD’s senior counsel in the legal transition programme added: “The adoption of the new energy efficiency laws is a landmark achievement for Georgia, which until now had virtually no energy efficiency regulations in place and very limited investment in energy performance.”

Below is a brief overview of the concepts and basic provisions of the New Laws.

The Law on Energy Efficiency

The Law on Energy Efficiency is a framework legislative act, which aims to reduce energy intensity, to secure energy supply, to increase energy independence and to support activities that will increase energy efficiency. Within the framework of the Law on Energy Efficiency, the Government has to adopt particular normative acts that will determine specific arrangements to achieve the aims envisaged by the law.

According to the Law on Energy Efficiency, the Ministry of Economy and Sustainable Development (the Ministry) shall adopt National Energy Efficiency Action Plan in every three years, which will determine the national energy efficiency target that the state aims to achieve in the following three years. The action plan shall also envisage activities that shall be carried out in order to increase energy efficiency level.

Besides, based on the Law on Energy Efficiency, the Ministry shall determine the format of the electronic platform on which the results of the energy efficiency activities shall be uploaded. Particularly, relevant public authority, energy distributors, energy suppliers and subsidy providers are obliged to disclose information about the actions that they implemented in order to reduce energy intensity and the results of such reduction.

The Law on Energy Efficiency imposes new obligations on the first category companies. Particularly, within every four years the first category company is obliged to conduct energy audit. Energy audit aims to identify possibilities for reduction of energy usage and to prepare recommendations about activities that will be beneficial for energy efficiency.

Furthermore, the Ministry has to adopt energy efficiency obligations scheme and/or alternative policy mechanisms. If the necessary funds and opportunities are allocated the scheme might impose obligations on the energy distributors and energy suppliers to reduce losses in the process of energy transformation, transmission and distribution or to adopt programs for reduction of usage of energy by final customers.

The Law on Energy Performance of Buildings

The aim of the Law on Energy Performance of Buildings is to promote reasonable usage of energy recourses and to improve energy efficiency of buildings. The provisions of the law apply to almost all types of buildings e.g. individual houses, multi-story buildings, offices, hotels.

According to the Law on Energy Performance of Building, the Government shall determine minimum requirements of energy efficiency no later than June 30, 2021. The minimum requirements of energy efficiency will apply to new buildings, if their relevant construction permit applications are submitted after June 30, 2021. The same requirements will apply to existing buildings as well in case 25% of the buildings is reconstructed or if the value of reconstruction exceeds 25% of the total value of each building.

The Government will also determine the requirements to the energy efficiency of the engineering technical systems that will apply at least to the big systems of heating, hot water supply, air conditioning and ventilation.

The Law on Energy Performance of Buildings prescribes future policies regarding energy efficiency of the buildings. Namely, all buildings construction permit application of which will be submitted after 30 September 2029 will have to meet requirements for almost zero energy usage if during the exploitation period cost-effectiveness of the building is not negative.

Besides, according to the Law on Energy Performance of Building the Government shall adopt rules of certification of energy efficiency of the buildings. Obtaining certificate will be necessary for new buildings and existing buildings if they are being sold or leased. All the best online casinos bonuses are presented on . No deposit bonuses, bonuses for deposit, cashback bonuses and promocodes - all these and a lot more info is on the website.

In addition, the owner of the building is obliged to conduct inspection of heating and air conditioning systems on a regular basis. Detailed instructions of the inspection will be determined by the Government.

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The News Laws earmark a significant step in the energy sector reform. Georgia is continuously striving to harmonize its legislation with EU rules and regulations. Georgia is committed to make its building industry more competitive and to boost the usage of greener energy sources.

1 First category company is a company that satisfies at least two from the following requirements: 1. Total value of its assets is more than GEL 50 million; 2. Total value of its income is more than GEL 100 million; and/or 3. Average number of the employees during one accounting period exceeds 250.

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13 August 2020 14:16