Energy in Armenia

Armenian and Iranian authorities have for years been discussing an oil pipeline (distinct from the existing Iran-Armenia natural gas pipeline) that will pump Iranian oil products to Armenia; however, as of early 2011, no concrete dates have been set for the construction.[11] Armenian Energy Minister Armen Movsisian has said that the construction will take two years and cost Armenia about $100 million.[11] Earlier Iran's Oil Minister has said that the 365-kilometer pipeline could go on stream by 2014.[11] Iran plans to export 1.5 million liters of gasoline and diesel fuel a day to Armenia through the pipeline; Armenia's annual demand for refined oil products stands at around 400,000 metric tons.[11]

The Russian gas export monopoly Gazprom supplies Armenia with gas through a pipeline that runs through Georgia.[13] In 2007, Gazprom provided Armenia with just under 2 billion cubic meters of natural gas. As a transit fee, Armenia pays Georgia approximately 10% of the gas that was destined to reach Armenia.[14] Russian natural gas supplies to Georgia and Armenia are provided by two main pipelines: the North Caucasus-Transcaucasus pipeline (1,200 mm diameter) and the Mozdok-Tbilisi pipeline (700 mm diameter).[15]

In 2008, Armenia imported 2.2 billion cubic meters of natural gas from Russia.[16]

A new gas pipeline, the Iran-Armenia Natural Gas Pipeline, was completed in October, 2008. It is owned and operated by Gazprom Armenia and links Armenia to neighboring Iran, which has the world's second largest natural gas reserve after Russia.[17] It has a capacity to pump 2.3-2.5 billion cubic meters of Iranian gas per year. However, although Iran is ready to export gas to Armenia, the Armenian Ministry of Energy claimed in October 2008 that it "does not yet have a need" for Iranian gas.[18] Analysts have said that Armenia's reluctance to import Iranian gas is a result of pressure from Russia which maintains a monopoly over Armenia's natural gas market.[18]

Gazprom wholly owns a crucial 24-mile section of the pipeline which Armenia surrendered in exchange for natural gas supplies from Russia at prices well below the European average until 2009. According to an analyst, Armenia "effectively bargained away its future prospects for energy sources in return for cheaper prices now." While Armenia could diversify its gas supply, with control of the Iran-Armenia gas pipeline, Gazprom now controls the competitors' supply.[17]

In 2009 Armenia was importing 1-1.5 million cubic meters of Iranian natural gas, paying for this by electricity exports.[16] In 2010 Iran will sell about 150 million cubic meters of natural gas to Armenia. A natural gas measuring center was installed late 2009/early 2010 at the Armenian-Iranian border to replace a provisional gas measuring station.[16]

In 2018 as part of gas for electricity swap deal Armenia receives about 370 million cubic meters of gas a year from Iran, which is converted into electricity and is shipped back to Iran.[19]

According to the agreements reached in 2017 by Karapetyan government gas import price stands at $150 for one thousand cubic meters throughout year 2018.[20] Gazprom Armenia sells it to Armenian households at almost $300.[21]

The examination done by the working group set by the instruction of PM Pashinyan revealed in October 2018 that gas tariffs can be reduced by at least 10%.[22]

Armenia operates one Soviet-designed VVER-440 nuclear unit at Metsamor, which supplies over 40% of the country's energy needs. The EU and Turkey have expressed concern about the continuing operation of the plant. The Armenian energy minister has announced that a US$2 billion feasibility study of a new 1,000 MWe nuclear power plant is to be carried out in cooperation with Russia, the United States and the IAEA. Russia has agreed to build the plant in return for minority ownership of it. Furthermore, the USA has signalled its commitment to help Armenia with preliminary studies.

Armenia's Metsamor Nuclear Power Plant

Armenia's Metsamor Nuclear Power Plant has an installed capacity of 815 MW, though only one unit of 407.5 MW is currently in operation.[25]

Because Turkey, despite its WTO obligation, illegally blockades Armenian borders, nuclear fuel must be flown in from Russia.[6] Used fuel is sent back to Russia.

Armenia signed a cooperation agreement with the European Organization for Nuclear Research in March 1994.[26] Since 2018, Armenia has also signed a cooperation agreement with the European Atomic Energy Community. [27]

The Hrazdan Thermal Power Plant in central Armenia

During 2010-2017 thermal power plants (running on imported natural gas from Russia and Iran) provided about one-third of Armenia's electricity.[28]

Thermal power plants (running on natural gas) in Armenia have an established capacity of 1,756 MW.[25]

The following table lists the three thermal power plants which together account for 24% of Armenia's domestic electricity generation.[29]

In April 2010, a new natural gas-fired thermal power plant was inaugurated in Yerevan, making it the first major energy facility built in the country since independence.[28] The plant will reportedly allow Armenia to considerably cut back on use of natural gas for electricity production, because officials say it will also be twice as efficient as the plant's decommissioned unit and four other Soviet-era facilities of its kind functioning in the central Armenian town of Hrazdan.[28] With a capacity of 242 megawatts, its gas-powered turbine will be able to generate approximately one-quarter of Armenia's current (as of 2010) electricity output.[28] The state-of-the-art plant was built in Yerevan in place of an obsolete facility with a $247 million loan provided by the Japanese government through the Japan Bank of International Cooperation (JBIC). The long-term loan was disbursed to the Armenian government on concessional terms in 2007.[28]

Armenia's energy sector will expand further after the ongoing construction of the Hrazdan thermal plant's new and even more powerful Fifth Unit.[28] Russia's Gazprom monopoly acquired the incomplete facility in 2006 as part of a complex agreement with the Armenian government that raised its controlling stake in the Armenian gas distribution network to a commanding 80 percent. The Russian giant pledged to spend more than $200 million on finishing its protracted construction by 2011.[28]

The new Yerevan and Hrazdan TPP facilities will pave the way for large-scale Armenian imports of natural gas from neighboring Iran through a pipeline constructed in late 2008. Armenia began receiving modest amounts of Iranian gas in May 2009. With Russian gas essentially meeting its domestic needs, it is expected that the bulk of that gas will be converted into electricity and exported to the Islamic Republic.[28]

In late December 2010, the Armenian Energy Ministry announced that the fifth block of the Hrazdan thermal power plant will go online by April 2011.[1] Although construction on the fifth block began in the late 1980s, the Armenian government tried to unsuccessfully finish it in the late 1990s. The current project is part of a 2006 deal between Gazprom and the Armenian government, in which Gazprom acquired the incomplete facility and increased its stake in Armenia's gas distribution network, in turn pledging to spend $200 million in completing the project by 2011.[1]

The Kanaker hydroelectric power plant along the Hrazdan river just north of Yerevan's Arabkir district

The Atarbekyan Hydro Power Plant in Hrazdan

Hydropower plants have an established capacity of 1,038 MW.[25]

The economically justified hydropower potential of Armenia is around 3.600 GWh/year. From this amount, 1.500 GWh/year (or about 42% of economically justified hydropower potential) has been developed already.[36]

Armenia has 9 hydroelectric power plants which together accounted for one third of its domestic electricity generation. The plants are grouped along two cascades: the Sevan–Hrazdan Cascade and the Vorotan Cascade.[36] The following table lists the details of each cascade:[29][36]

By 2020, it is expected that the Meghri HPP (also known as the Araks Hydro Power Plant) with 140 MW capacity and the Loriberd HPP with 60 MW capacity will be built with the cumulative generation of 1,012 million kWh/year.[38] The Meghri Hydro Power Plant is a joint Armenian-Iranian project to be constructed on the Araks River near Armenia's southern border town of Meghri.[39]

In 2010, the energy ministers of Armenia and Iran signed a document on the long-anticipated construction of two hydropower stations on the Arax River. The agreement stipulates that the $323 million project will be fundamentally financed and operated by Iran, 793 million kWh of energy transported to Iran annually, and the stations transferred to Armenia's ownership 15 years later. Construction was expected to commence in 2011 and take five years to complete.[40] By 2018 construction is not completed.

According to a USAID sponsored report, 313 small hydroelectric power plants (small HPPs) with an installed capacity of 243.366 MW and an average yearly electricity production of 737.38 GWh are installed in the country.[38] In 2006, the small HPPs produced 166.6 GWh of electricity.[24]

The Lori 1 Wind Power plant at Pushkin Pass

According to a study sponsored by the United States Department of Energy (DOE) and the United States Agency for International Development (USAID) in 2002–2003, the theoretical wind power potential of Armenia is 4,900 MWe in 4 zones with a total area of 979 km².[41]

As of 2008, the Lori 1 Wind power plant is Armenia's only wind power plant. Completed in December 2005 by the Iranian company "Sunir" with funding from Iran, it consists of 4 wind turbines and has a capacity of 2.64 MWe. It is located along the Bazum Mountains at Pushkin Pass (40°54′41.36″N 44°25′52.86″E) in Armenia's northern region of Lori. In 2006, the Lori 1 WPP generated only 2.6 GWh of electricity (a yearly average of 296.8 KWe—about 11% of installed capacity).[24]

Wind power in Armenia is underdeveloped and as of 2008, Armenia has only one wind power farm located in the Lori marz. The Armenian and Iranian energy sectors are currently jointly constructing the Iran-Armenia Wind Farm which is set to become the country's largest wind farm, having an installed electric capacity of 90 MW.[42]

According to the report of Renewable Energy Roadmap for Armenia [43] the technical potential of the solar energy in the country is exceeding 1000 MW, or around 2% of the country's annual energy consumption. Solar energy utilization in the country remains low due to solar's tendency for less efficient and less reliable energy generation in comparison with nuclear, natural gas and hydroelectric energy.

A 55 MW solar power plant to be located near Mets Masrik village in Gegharkunik province, is to be built by consortium of the Netherlands’ Fotowatio Renewable Ventures (FRV) B.V and Spain's FSL Solar S.L. that won an international tender, announced by the government of Armenia to choose a company for building the first large photovoltaik power station. It is expected to commission the station in 2020.[44]

Armenia is constructing the Jermaghbyur Geothermal Power Plant which will be the country's largest geothermal power plant having an installed electric capacity of 150 MW.[45]