JEL Classifications: M11, Q4
CORONOMICS AND SOCIOECONOMIC ASPECTS OF THE ENERGY SECTOR Author: Dr. Davit Narmania
| Published: 2020-12-28
| Pages: 58 - 62
For Citation: Narmania D. (2020). Coronomics And Socioeconomic Aspects of The Energy Sector. Globalization and Business, 10, 58-62. https://doi.org/10.35945/gb.2020.10.006
The worldwide pandemics of COVID-19 has influenced all sectors of the economy. Energy sector as one of the branches of the economy has been affected as well. Suspension of a number of enterprises and institutions, switching staff to the remote working mode and other restrictions for the purpose of preventing risks stemming from the pandemics reduces overall energy consumption. On the other hand, staying at home significantly increases household energy consumption. However, the reduction of the energy consumption due to the stop/less active operation of the enterprises and institutions usually exceeds the amount of increased household consumption. Subsequently, amount of the energy to be distributed is reduced.
Another important factor is the price of energy. Energy price in Georgia is mainly determined according to the exchange rate of the national currency in relation to US Dollar. Pandemics and decrease of economic activities have caused dramatic drop of Georgian Lari rate. This has increased price of both – imported energy (electricity and natural gas) and electricity to be purchased from the local hydro power plants on the basis of the power purchase agreements so called PPAs (where the purchase price of the electricity is indicated in US Cents).
During the pandemics the solvency of enterprises/organizations and the population is also quite important. Restrictions related to pandemics have reduced revenues of business sector as well as of the population. Many enterprises and institutions (e.g. hotels, restaurants, cafes, beauty parlors etc.) have completely stopped. Hereby, a lot of employees have lost their jobs and the income or the remuneration for some people has decreased due to pandemics. Therefore, many subscribers have faced problem of paying bills and applied companies as well as the regulatory commission and the State with request to defer their debts. Envisaging social background, the decision of the Government of Georgia to subsidize utility services of the natural persons definitely bears quite progressive character. The Government of Georgia has spent more than 170 million GEL within 3 months for those subscribers whose monthly electricity consumption doesn’t exceed 200 kW and natural gas consumption doesn’t exceed 200 cubic meters. For such consumers the Government has also subsidized water and cleaning service fees.
This article analysis abovementioned and other socioeconomic aspects of the energy sector that have become relevant due to COVID-19.
Coronomics; Energy; Consumption; Utility subsidies
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