Hydroelectric station on Georgian Military Highway between Tbilisi and Mtskheta

The lack of significant domestic fuel reserves made the Georgian economy extremely dependent on neighboring republics, especially Russia, to meet its energy needs. Under the fuel supply conditions of 1994, only further exploitation of hydroelectric power could enhance energy self-sufficiency. In 1990 over 95 percent of Georgia's fuel was imported. For that reason, the collapse of the Soviet Union in 1991 caused an energy crisis and stimulated a search for alternative suppliers.

The harsh winter of 1991-92 increased fuel demand at a time when supply was especially limited. Oil imports were reduced by the conflict between Armenia and Azerbaijan, cold weather curtailed domestic hydroelectric production, and the price of fuel and energy imports from other former Soviet republics rose drastically because of Georgia's independent political stance and the new economic realities throughout the former union. Beginning in December 1991, industries received only about one-third of the energy needed for full-scale operation, and most operated far below capacity throughout 1992.

Small amounts of oil were discovered in the Samgori region (southern Georgia) in the 1930s and in eastern Georgia in the 1970s, but no oil exploration has occurred in most of the republic. In 1993 some 96 percent of Georgia's oil came from Azerbaijan and Russia, although new supply agreements had been reached with Iran and Turkey. Oil and gas pipelines connect Georgia with Azerbaijan, Armenia, Russia, and Turkmenistan. Refinery and storage facilities in Batumi receive oil through a long pipeline from Baku in Azerbaijan.

Coal is mined in Abkhazia and near Kutaisi, but between 1976 and 1991 output fell nearly 50 percent, to about 1 million tons. The largest deposits, both in Abkhazia, are estimated to contain 250 million tons and 80 million tons, respectively. Domestic coal provides half the Rustavi plant's needs and fuels some electrical power generation. In 1993 natural gas, nearly all of which was imported, accounted for 44 percent of fuel consumption.

Georgia has substantial hydroelectric potential, only 14 percent of which was in use in 1993 in a network of small hydroelectric stations. In 1993 all but eight of Georgia's seventy-two power stations were hydroelectric, but together they provided only half the republic's energy needs. In the early 1990s, Georgia's total consumption of electrical energy exceeded domestic generation by as much as 30 percent. Georgian planners see further hydroelectric development as the best domestic solution to the country's power shortage.

Data as of March 1994