The July 24–25 outages turned a technical failure into a dispute over sabotage, cryptocurrency mining, Russia, and the cost of Tbilisi’s transit ambitions. But the central question is far more consequential: can Georgia’s power system withstand the geopolitical role that Azerbaijan, Turkey, and Europe are already assigning to it?
On the night of July 24, a significant part of Georgia suddenly went dark. Power disappeared in Tbilisi, Batumi, Rustavi, Gori, Telavi, Kutaisi, and other cities. Before the system had fully recovered from the first shock, a second major disruption occurred on the morning of July 25. The Georgian National Energy and Water Supply Regulatory Commission opened an investigation, while Georgia’s State Security Service launched a criminal case under Article 318 of the Criminal Code, which covers sabotage.
The opening of a criminal case does not, of course, mean that sabotage has been established. The publicly available technical evidence so far points much more convincingly in another direction: Georgia’s power system suffered a cascading disturbance in which a major failure at the high-voltage transmission level was capable of dragging a substantial part of the country down with it.
This is where the story of two July outages ends and a much more serious one begins.
Georgia aspires to become an energy bridge linking the Caspian basin, Central Asia, Turkey, the Black Sea, and the European Union. Azerbaijan intends to use Georgian territory to expand electricity exports westward. Turkey is discussing a new electricity corridor comparable in strategic logic to TANAP. The European Union is advancing the Black Sea energy corridor project. Billions are expected to be invested in transmission lines, substations, storage facilities, and cross-border interconnections.
But every transit state faces a harsh rule: geography offers the chance to become indispensable, while infrastructure determines whether that indispensability becomes reality.
The two July blackouts showed that Georgia has developed a dangerous gap between those two concepts.
The Country Went Dark Twice. The Grid Said More Than the Politicians
After the second outage, Levan Mebonia, director of the Enguri Hydropower Plant, said the system disturbance was caused by the disconnection of the 500-kilovolt Imereti transmission line, which had been operating under an extremely heavy load. The loss of that line was followed by a disruption of power-system stability.
For an ordinary consumer, this is a technical detail. For a power engineer, it is the key to understanding the problem.
A large national grid is designed so that the loss of a single component does not automatically result in the loss of the entire system. The electricity sector operates under the N-1 principle: a power system should be capable of withstanding the failure of one significant element, whether a transmission line, transformer, or generating unit, without causing widespread customer outages.
Notably, Georgian State Electrosystem’s long-term development plans had already identified reliable autonomous operation and compliance with the N-1 criterion as central objectives. Among the grid reinforcement projects was the 500-kilovolt Jvari–Tskaltubo–Akhaltsikhe connection, intended, among other purposes, to provide redundancy for the Imereti transmission corridor and reduce the risk of large-scale load shedding in the event of an emergency.
That is why the main technical question after July 2026 is not: why did a particular transmission line trip?
Transmission lines trip in power systems all over the world.
The real question is: why did the loss of this line produce such a large-scale systemic effect?
If the investigation ultimately confirms that grid stability was lost after the failure of a major transmission element or a change in the mode of parallel operation with a neighboring power system, then this was not simply an accident. It would be evidence of insufficient redundancy, problems with system protection and emergency automation, limited dispatchable capacity, an imbalance between generation and load, or some combination of these factors.
That is far more serious than the explanation of a single unsuccessful switching operation.
Azerbaijan Is Not an External “Power Outlet” but Part of Georgia’s Energy Stability
There is one factor in Georgia’s energy architecture that can no longer be treated as secondary after the July events: Azerbaijan.
On May 18, 2026, a new package of energy cooperation documents was signed in Baku in the presence of President Ilham Aliyev and Georgian Prime Minister Irakli Kobakhidze. It covers gas supplies, transit, electricity deliveries to Georgia, and the onward transmission of that electricity through Georgian territory toward Turkey.
On July 9, President Ilham Aliyev approved the agreement on electricity supply and transit. The new contractual framework is not designed for occasional trade involving a few hundred million kilowatt-hours. It is intended to reshape the region’s energy map over the long term.
Existing power flows already reveal the direction of this transformation. In 2025, Georgia exported approximately 0.5 TWh of electricity, with nearly four-fifths of those exports going to Turkey. Transit volumes totaled about 0.7 TWh, while approximately 63 percent of the electricity transiting Georgia originated in Azerbaijan.
That is a fundamental consideration.
For Georgia, Azerbaijan is no longer merely its largest gas supplier, a neighboring state, and the owner of critically important transport and energy routes. Azerbaijan is gradually becoming one of the systemically important players in the regional electricity market, of which the Georgian grid is itself a part.
That means the resilience of the two countries’ power systems is increasingly evolving from a national concern into a shared strategic asset.
Tbilisi gains transit revenue, investment, infrastructure, and political leverage. Baku gains a western outlet for its growing energy potential. Ankara gains an additional source of electricity and another channel for integration with the Caucasus. Europe gains a potential alternative to some of its traditional energy routes.
But a chain is only as reliable as its weakest link.
The New TANAP Will Carry Electricity, Which Is Why the July Failure Is More Dangerous Than It Appears
On June 1, Turkish Energy Minister Alparslan Bayraktar publicly discussed the creation of an Azerbaijan–Georgia–Turkey electricity corridor with further access to Southeastern Europe. In its geoeconomic logic, he compared the future system to TANAP, the gas artery that transformed the architecture of Caspian gas supplies to the West. At the same time, Turkey plans to invest about $30 billion in upgrading its own power-grid infrastructure over the next decade.
An even more ambitious route is developing in parallel.
Azerbaijan, Georgia, Romania, and Hungary have created the institutional framework for the Black Sea Green Energy Corridor. The project envisages transmitting electricity across the Black Sea toward the European Union. A subsea cable approximately 1,100 kilometers long and with a capacity of around 1,000 MW is under consideration. The project has been incorporated into European grid development planning, while Italy’s CESI is conducting technical studies. In February 2026, the next stage of preparations for offshore surveys began.
This is no longer diplomatic window dressing.
If implemented, the project would effectively create a new electricity axis running from the Caspian region through the South Caucasus and the Black Sea to the European Union.
And the entire axis runs through Georgia.
That is why a blackout in Tbilisi ceases to be an exclusively Georgian problem the moment the Georgian grid becomes infrastructure of international significance.
Investors, lenders, operators, and electricity buyers do not evaluate political declarations. They evaluate SAIDI, SAIFI, redundancy, available transfer capacity, frequency stability, dispatch performance, restoration time after failures, and the grid’s ability to withstand the loss of its largest element.
The Black Sea cable can be built. Power plants can be financed. Intergovernmental agreements can be signed.
But electricity cannot be exported through a grid that lacks sufficient resilience itself.
Georgia Does Not Need Megawatts on Paper. It Needs a Grid Capable of Handling Them
The numbers already point to mounting tension between ambition and the physical capabilities of the infrastructure.
In 2025, Georgia consumed approximately 14.9 billion kWh of electricity, while domestic generation amounted to around 13.8 billion kWh. Hydropower accounted for approximately 11 billion kWh, while thermal power plants generated about 2.8 billion kWh. The Enguri Hydropower Plant alone produced roughly 3.4 billion kWh, nearly one-quarter of Georgia’s total electricity generation and approximately one-third of the country’s hydropower output.
This structure gives Georgia an obvious advantage: enormous hydropower resources.
At the same time, however, it creates concentration risks.
Hydropower generation depends on seasonal water availability. Enguri remains a unique facility with an extraordinarily complex political and geographic configuration: the dam is located in territory controlled by Tbilisi, while the powerhouse is situated in Abkhazia, outside the control of Georgia’s central authorities.
This vulnerability is compounded by the condition of major transmission lines, the need for new substations and battery storage systems, and the requirement to expand transmission capacity.
In March 2026, Georgian authorities said the transmission network would require approximately €570 million in investment over the next five years to connect around 4,000 MW of new generating capacity and deploy energy storage systems.
This is precisely where the July outages acquire strategic significance.
Georgia is attempting simultaneously to sharply increase generation, connect new power plants, expand transit, integrate with Azerbaijan, Turkey, and the European market, and meet growing domestic demand, all while relying on a grid in which individual components, under critical operating conditions, can still trigger a cascading collapse.
This is no longer a question of repairs. It is a question of the pace at which the state can modernize.
Cryptocurrency Miners Became the Perfect Culprit. The Problem Is That They Really Are a Problem
Almost immediately after the outages, a politically attractive explanation emerged: cryptocurrency mining was to blame.
Roman Gotsiridze, a former president of the National Bank of Georgia and an opposition politician, said cryptocurrency mining operations had become excessively large electricity consumers and called for cryptocurrency mining to be banned in free industrial zones. He estimated that mining accounted for approximately 6 percent of Georgia’s electricity consumption, or roughly 1 billion kWh annually.
That figure requires independent verification because it comes from a political opponent of the government rather than from the system operator.
But the underlying problem is entirely real.
Cryptocurrency mining has a particularly troublesome characteristic for a weak grid: its electricity demand is constant, concentrated, and capable of expanding rapidly wherever cheap power becomes available.
For a miner, electricity is the principal operating input. The lower the tariff, the more attractive the location. The industry therefore naturally migrates to places where there is an abundance of cheap hydropower, subsidies, or even an opportunity to avoid paying for electricity altogether.
Georgia fit this model almost perfectly.
Nowhere was that more evident than in Svaneti.
Svaneti Turned Free Electricity Into Cryptocurrency and Left the State With the Bill
On June 1, Mamuka Mdinaradze, who at the time served as state minister for law enforcement coordination, cited a figure that illustrates the scale of the anomaly better than any political speech could.
In 2025, the municipality of Mestia consumed approximately 133 million kWh of electricity. According to Mdinaradze, a Georgian municipality with a comparable population should have consumed roughly 10 million kWh.
The difference is more than tenfold.
The government estimates that illegal cryptocurrency mining and the associated unauthorized electricity consumption cost the state at least 20–25 million lari annually. The authorities announced the introduction of metering, limits on free household electricity consumption, and enforcement measures against large illegal consumers.
There is very little room for dispute here.
If household electricity is free and dozens or hundreds of ASIC miners can be installed nearby, an almost perfect economic arbitrage emerges: a private operator converts a state subsidy into a crypto asset, while society pays for the deterioration of transformers, transmission lines, and the distribution grid.
Such a model can destroy even a well-designed local network.
But that still does not mean cryptocurrency miners caused the nationwide blackout on July 24 or July 25.
That distinction is fundamental.
Mining can reduce system resilience margins, increase baseload demand, overload distribution networks, and accelerate equipment deterioration. But a cascading nationwide failure following the loss of a major transmission line points first and foremost to the architecture of the power system itself: redundancy, system balance, automation, dispatch operations, and the grid’s ability to contain a fault.
If it emerges that demand from cryptocurrency mining facilities aggravated the emergency operating conditions, that would be a significant factor.
But declaring miners the cause before the technical reconstruction of events is complete would mean identifying a politically convenient culprit before engineers have identified the actual answer.
ARD Saw the Kremlin Behind Bitcoin. The Numbers Demand a Much More Cautious Conclusion
The international information dimension proved even more intriguing than the domestic one.
German public broadcaster ARD released an investigation titled “Crypto War: How Putin Is Fighting Us With Bitcoin.” Its authors describe a model in which Russia, having lost part of its traditional European gas market, could redirect surplus gas into the production of cheap electricity, use that electricity to mine cryptocurrency, and employ digital financial instruments to reduce the effectiveness of Western sanctions. Cryptocurrency mining facilities in Georgia are also mentioned in this context.
The mechanism itself is not implausible.
Cryptocurrencies can indeed be used in cross-border settlements, and since 2022 the Russian economy has actively sought alternative financial channels.
But moving from that general proposition to a specific accusation involving Georgia’s energy sector requires a chain of evidence.
And this is where the problem begins.
According to Georgia’s energy regulator, Georgia imported approximately 2.27 billion cubic meters of gas from Azerbaijan in 2025 and about 886 million cubic meters from Russia. Azerbaijan accounted for around 71.7 percent of the total, while Russia’s share was 27.9 percent. In the approved 2026 balance, the gap becomes even wider: approximately 2.93 billion cubic meters are expected to come from Azerbaijan and around 400 million from Russia. In other words, Azerbaijan’s share approaches 88 percent.
Moreover, Georgia’s cryptocurrency mining sector has historically been attracted above all by cheap hydropower.
The formula “Russian gas–Georgian electricity–Bitcoin–Russian budget” therefore cannot automatically be applied to the entire industry.
It may prove accurate in the case of a specific company, a specific power plant, or a specific financial arrangement. But that would require data on the origin of the gas, electricity supply contracts, the owners of mining equipment, cryptocurrency wallets, payments, and ultimate beneficiaries.
Without such evidence, the investigation risks crossing the line from forensic analysis into geopolitical narrative.
Kulevi Changed the Rules of the Game: Brussels Is Now Scrutinizing Georgia’s Pipelines, Plants, and Money
It would also be a mistake to dismiss Europe’s attention as nothing more than a political campaign.
On July 23, literally one day before the first large-scale power outage, the European Union included the Kulevi oil refinery in its 21st package of sanctions against Russia. The reason was the processing of Russian crude oil. A ban on transactions is scheduled to take effect after a transition period. According to data cited by Reuters from research conducted by the Centre for Research on Energy and Clean Air, the refinery received six shipments of Russian crude between October 2025 and May 2026. The plant’s owner, Black Sea Petroleum, announced plans to switch to crude oil from Turkmenistan and Kazakhstan. Tbilisi rejected accusations that it had knowingly facilitated sanctions evasion and said it was prepared to cooperate with EU institutions.
This is the first time that a major Georgian company of this scale has been directly targeted by European Union sanctions.
It changes the entire context of the debate.
European institutions no longer view Georgia simply as a small transit state between the Black Sea and the Caspian Sea. Its oil terminals, refineries, banks, cryptocurrency infrastructure, transport corridors, and energy companies are increasingly regarded as components of the broader Eurasian sanctions landscape.
That is precisely why the cryptocurrency mining issue has acquired a political charge far greater than the actual value of the Bitcoin being mined.
The geography that gave Georgia political dividends for two decades is now generating political risks as well.
Tbilisi Is Caught Between Brussels and Moscow, and the Power Grid Has Been Drawn Into the Political Crisis
The energy crisis is unfolding against the backdrop of the deepest deterioration in relations between Georgia and the European Union in years.
Georgia received EU candidate status in December 2023. By 2024, however, the European Council had concluded that the accession process had effectively come to a halt, and the Georgian government subsequently announced that it did not intend to raise the issue of opening accession negotiations before 2028. In the European Commission’s current materials, Georgia remains among the candidate countries with which accession negotiations have not been opened.
Against this backdrop, any major infrastructure incident inevitably becomes politicized.
The opposition gains an opportunity to accuse Georgian Dream of incompetence, institutional decay, and opaque protection of major economic interests.
The government, in turn, gains grounds to accuse its opponents of speculation, political exploitation of the accident, and threats to critical infrastructure.
The State Security Service opens a sabotage investigation, and a technical inquiry automatically moves into the realm of national security.
After the 2008 war, with diplomatic relations with Russia still absent and Moscow maintaining control over Abkhazia and the Tskhinvali region, suspicion surrounding any major infrastructure failure in Georgia is understandable.
But that is precisely why the evidentiary standard should be higher, not lower.
To speak of sabotage, there must be evidence of deliberate interference, whether physical, cyber, operational, or intelligence-related.
So far, the information presented publicly points first and foremost to a power-system accident.
Treating Article 318 as proof of sabotage would be just as wrong as treating the existence of cryptocurrency mining farms as proof that they caused a nationwide blackout.
Kazakhstan Has Already Traveled This Road and Learned That Mining Cannot Be Left Outside Energy Planning
Kazakhstan’s experience is particularly instructive for Georgia.
After China banned cryptocurrency mining in 2021, Kazakhstan became one of the world’s largest centers of Bitcoin production. Vast amounts of computing capacity relocated there because of cheap electricity and the country’s existing energy base.
The system was not prepared for it.
In 2021, electricity consumption in Kazakhstan rose by approximately 8 percent, compared with the 1–2 percent annual growth typical of previous years. The capacity deficit intensified, authorities began restricting legal miners, and the energy problems coincided with the political crisis of January 2022. Researchers linked the sharp increase in demand partly to cryptocurrency mining, although attributing major regional power failures exclusively to mining would be an oversimplification.
Kazakhstan did not destroy the industry.
Instead, it began transforming mining from an energy parasite into a regulated industrial consumer.
On July 18, 2026, rules governing so-called strategic digital mining were approved. The model links access to energy quotas to the transfer of part of the digital assets produced into the infrastructure of a national strategic cryptocurrency reserve, provides for direct contracts with power generators, and caps electricity consumption through established quotas.
For Georgia, this example is far more useful than the slogan “ban everything.”
A large legal mining operation should not be a privileged consumer. It should be a controllable load.
It should be required to have separate commercial metering, telemetry, disclosed installed capacity, a contractual mechanism allowing remote load reduction during emergencies, higher tariffs during periods of scarcity, and financial liability for exceeding agreed capacity.
In a free industrial zone, a tax privilege should not become an energy exemption.
The Most Uncomfortable Question: Why Is Georgia Exporting Electricity If It Cannot Withstand an Accident at Home?
At first glance, there is an obvious paradox.
Why should a country experiencing large-scale outages become a transit state and exporter of electricity?
The answer lies in the physics of power systems.
The problem does not necessarily consist of an insufficient annual volume of electricity. A country may have substantial hydropower generation in spring and summer, export the surplus, and simultaneously face difficulties with balancing, winter shortages, transmission constraints, or system stability during emergencies.
Electricity is not oil.
It cannot simply be produced, stored in a tank, and shipped a week later.
At every moment, generation and consumption must remain almost perfectly balanced. Frequency must be maintained close to its prescribed level. The loss of a major transmission line instantly redistributes power flows across other lines. If those lines become overloaded, protection systems disconnect the next element. Then the next.
That is how a cascade begins.
For this reason, the principal resource of Georgia’s future energy hub is not the kilowatt-hour.
The principal resource is controllability.
Three Blackout Scenarios, and Only One of Them Is Truly Dangerous for the State
Three scenarios can be identified after the July events.
The first is purely technical: overload of a major transmission element, its emergency disconnection, insufficient redundancy, and the resulting cascade. The publicly available technical information so far fits this explanation better than any other.
The second is a technical accident compounded by human factors: dispatching errors, improperly configured protection systems, delayed modernization, unaccounted-for load, or insufficient operating reserves.
The third is deliberate interference.
That is the scenario currently being investigated by the State Security Service.
If the third scenario is confirmed, Georgia will face a qualitatively new threat: an attack on critical infrastructure in a country that is supposed to become part of a transcontinental energy corridor.
But if the first or second scenario is confirmed, the political consequences may be no less painful.
Sabotage can be explained by the presence of an adversary.
Systemic weakness has to be explained by one’s own policies.
Who Benefits From Energy Anxiety, and Who Pays the Price
Azerbaijan has a direct interest in a strong Georgian power system. The more reliable Georgia’s transit network becomes, the greater the opportunities for exporting Azerbaijani electricity and, potentially, electricity from Central Asia across the Caspian Sea.
Turkey has the same interest. An electricity connection with Azerbaijan strengthens its position as a regional energy hub.
The European Union needs infrastructure that expands the number of available routes and suppliers while complying with European requirements for technical reliability, transparency, and sanctions enforcement.
Georgia stands to gain the most if it succeeds.
It has the opportunity to convert its geographic position into a permanent stream of infrastructure revenue.
But Georgia will also lose the most if its power grid acquires a reputation for unreliability.
Major international energy projects are evaluated over decades. The cost of capital reacts to risk. Investors incorporate the probability of accidents into their financial models. Lenders reflect it in interest rates. Operators translate it into redundancy requirements. Buyers incorporate it into contractual guarantees.
A few hours without electricity may end after a few hours.
Reputational risk lasts much longer.
Georgia Wanted to Become a Bridge. Now It Must Prove That the Bridge Can Carry the Load
Ultimately, the July blackouts are not about cryptocurrency.
They are not about Roman Gotsiridze.
They are not about ARD.
They are not even about who specifically disconnected the Imereti transmission line.
They are about the price of geopolitical ambition.
For three decades, Georgia has built its international value around one principal advantage: its location. The Baku–Tbilisi–Ceyhan oil pipeline, the South Caucasus gas pipeline, the Baku–Tbilisi–Kars railway, and major transport and digital routes all pass through the country. Large-scale electricity transmission is now expected to join that list.
But electricity transit is far more demanding than an oil pipeline.
It requires continuous equilibrium.
Georgia will therefore have to do several things simultaneously: physically reinforce its high-voltage transmission network, ensure genuine N-1 redundancy, accelerate construction of new transmission lines and substations, deploy energy storage systems, modernize emergency protection and automation, establish precise metering for major consumers, turn legal cryptocurrency mining into a controllable interruptible load, and finally force illegal mining operations out of the gray economy.
Most importantly, Tbilisi will have to separate engineering from politics.
If the cause of the accident was technical, it should be identified as technical.
If there was negligence, those responsible should be named.
If cryptocurrency mining increased the scale of the disruption, the data should be presented.
If there was deliberate interference, the evidence should be produced.
Because the worst-case scenario for Georgia’s energy sector is not even a third blackout.
The worst-case scenario is a system in which every outage is first assigned a politically convenient explanation and only afterward subjected to a search for its physical cause.
Azerbaijan has energy. Turkey has a market and infrastructure ambitions. Europe has demand for new routes. Central Asia has enormous potential resources. Georgia has unique geography.
Now Tbilisi must prove that it has one more thing: a power system that can be trusted with all of it.
July 2026 made that test public.
The next blackout could make it prohibitively expensive.