1 Introduction Regional energy integration is increasingly vital as it en­hances energy security, facilitates the efficient integration of variable renewables, and supports decarbonisation goals amid growing global energy interdependence and climate commitments. The importance of regional energy integration in the South Caucasus is important on several levels. Firstly, the transition to renewable energy systems, in particular with higher shares of variable sources such as solar and wind energy, can be attained more efficiently if countries can trade electricity and energy with each other. Secondly, the recent instability exhibited by larger regions, both to the north(due to the Russian-Ukrainian conflict) and to the south(due to the Israeli-Iranian conflict), show­case the need for the South Caucasus to become more re­silient as a region, especially as its own conflicts have not been fully resolved. In light of this, cooperation with the European Union(EU) would provide another extraregional cooperation format for the South Caucasus, allowing a greater diversification of energy sources. This study focus­es on Armenia and Georgia as the two countries in the re­gion that lack domestic fossil fuel reserves, making the question of energy security more acute for them than for Azerbaijan. As a result, stronger EU-South Caucasus energy coopera­tion offers mutual benefits by advancing EU decarbonisa­tion and diversification goals while supporting Armenia and Georgia in energy security, infrastructure modernisa­tion, and regulatory alignment, ultimately fostering stabili­ty in a geopolitically sensitive region, while simultaneously advancing the EU’s own decarbonisation and diversifica­tion goals. Armenia and Georgia are strategically located at the EU’s eastern frontier, with complementary energy profiles and untapped potential for exploitation of renewable energy sources, making them key partners in efforts to promote regional electricity integration and aligning neighborhood policy with the European Green Deal and REPowerEU ob­jectives, especially as both countries have clearly aired as­pirations for deeper integration with the European Union through regulatory harmonisation, energy reforms, and ­infrastructural connectivity. Armenia and Georgia already engage in active energy co­operation, particularly in the electricity and gas sectors, with three power transmission lines linking their grids and enabling emergency electricity exchanges. Support­ed by the EU, a new high-voltage transmission line is un­der construction to further strengthen this connectivity and facilitate exports to third countries. This existing col­laboration – as illustrated by Armenia’s record electricity exports to Georgia in 2022 1 – demonstrates that regional integration efforts are building on a solid foundation rather than starting from scratch. The transition to sustainable electricity systems is an op­portunity and a challenge for Armenia and Georgia, two South Caucasus states with distinct energy landscapes yet shared regional opportunities. As both countries strive to integrate renewable energy, enhance energy security, and align with global decarbonisation goals, understanding the dynamics of their electricity sectors becomes crucial. This research examines the transformations in Arme ­nia’s and Georgia’s electricity systems, assessing renew ­able energy development, policy frameworks, and exist ­ing challenges. Given the region’s interconnected nature, the study further explores potential avenues for collabo ­ration both between the two countries and with the EU which could enhance resilience and sustainability. By iden­tifying key policy recommendations, this research contrib­utes to the discourse on regional energy cooperation and facilitates informed decision-making for a low-carbon en­ergy future. This collaboration aligns with the EU Green Deal’s objective of strengthening sustainable energy part­nerships beyond its borders, ensuring long-term stability and reliability in the regional energy network. The study employed a methodology combining policy analysis and quantitative data interpretation to assess Armenia and Georgia’s renewable electricity transitions. It drew on national strategies and regulatory documents, complemented by energy data from national and inter­national sources(International Energy Agency, IEA, and International Renewable Energy Agency, IRENA), to ex­amine energy supply, demand, and the potential offered by renewables. Infrastructure projects such as the Black Sea Submarine Electricity Cable and cross-border inter­connection projects were used to explore regional inte­gration, while EU-aligned frameworks provided a lens with which to assess regulatory convergence and cross-­border trade readiness. 1  Economic Cooperation Between Armenia and Georgia: Potential and Challenges Ahead – Caucasus Watch Introduction 3