Electricity sector in Armenia

According to International Energy Agency in 2015 electricity generation in Armenia increased since 2009 to nearly 8000 GWh, but still remains below 1990 levels. Also, in 2015 Armenia consumed more than twice as much natural gas than in 2009. Armenia lacks fossil energy source, and heavily relies on the production of electricity from a nuclear power plant and hydro power plants, and uses imported fossil fuels to operate thermal power plants. Solar energy and wind energy productions are just a small portion of the overall electricity production. Out of 3213.2 MW of installed capacity in Armenia, the largest portion of electricity generation comes from Metsamor Nuclear Power Plant at 38%, 33% from hydro power plants, 22% from gas-fired power plants, and the remaining 7% from other renewable sources. - during the period of 01.01.2012 - 30.06.2017 breakdown of aggregated electricity supply was: nuclear - 35.8%, hydro - 35.6%, fossil gas - 28.5%. The base loaded capacity is provided by the Metsamor Nuclear Power Plant, while the daily load regulation is provided by both the Sevan-Hrazdan Cascade and the Vorotan cascade hydropower plants. The aforementioned power plants are the primary domestic production energy sources while fossil fuel plants depend on imported gas. == Nuclear power ==

Nuclear power provides 38% of the electricity in Armenia through one operating nuclear reactor, Unit 2 of Metsamor Nuclear Power Plant, which is a WWER-440 reactor with extra seismic reinforcement. It was created in 1976 and is the only nuclear power plant in the South Caucasus. However, after the Spitak earthquake in 1988, the nuclear power plant's operation was forced to stop, becoming one of the causes of the Armenian energy crisis of 1990's. The second unit of the NPP was restarted in October 1995, putting an end to the 'dark and cold years'. While Armenia is the sole owner of the plant, the Russian company United Energy Systems (UES) manages the Metsamor NPP. Nuclear fuel must be flown in from Russia. A modernization of NPP is scheduled for 2018, which will enhance the safety and increase installed capacity by 40-50 MW. Earlier it was reported that Armenia is looking for a new reactor with 1060 MW capacity in 2026. 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 has an installed capacity of 815 MW, though only one unit of 407.5 MW is currently in operation. Because Turkey, despite its WTO obligation, blockades Armenian borders, nuclear fuel is flown in from Russia. Used fuel is sent back to Russia. Armenia signed a cooperation agreement with the European Organization for Nuclear Research in March 1994. Since 2018, Armenia has also had a cooperation agreement with the European Atomic Energy Community. Metsamor nuclear power plant provides more than 40 percent of power in Armenia; however, it is aging and will need to be replaced soon. It has received much financing for modernizing its systems and safety features. Russia has extended a loan of $270 million and a $30 million grant for extending the lifetime of Metsamor NPP in 2015, which will be coming to an end in 2016. The funds are to be provided for 15 years with a 5-year grace period and an interest rate of annually 3%. Plans for building a new nuclear power plant have been discussed. In July 2014, the energy minister of Russian Federation announced that Russia is willing to provide US$4.5 billion out of US$5 billion needed for construction of a new nuclear power plant. In 2026, Armenia decided its new nuclear power plant will be a small modular reactor, and proposals from Russia, United States, China, South Korea and France will be considered, with a final decision made by 2027. == Fossil gas power ==

During 2010–2017 thermal power plants (running on imported natural gas from Russia and Iran) provided about one-third of Armenia's electricity. Thermal power plants (running on natural gas) in Armenia have an established capacity of 1,756 MW. 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. 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. The main source of energy for these power plants was natural gas which was delivered through pipelines running from Turkmenistan through Azerbaijan. Until the late 1980s, Armenia was heavily dependent on thermal and nuclear energy production. During the years of the first Nagorno-Karabakh War, the energy production of the thermal power plants was also stopped because of a border blockade, and Armenia had a severe energy crisis until the mid-1990s. However, Armenia managed to overcome this crisis. Although most of the technology of some of the thermal power plants is outdated as of December 2016, a lot of upgrades and maintenance have been undertaken on the power plants. The Vanadzor Thermal Power Plant is not operational as of December 2016. Hrazdan Thermal Power Plant, which is owned by the Russian Federation, produced 12.3% of the electricity produced in Armenia in 2014. By 2016 upgrades made to the Yerevan Thermal Power Plant had increased its efficiency to almost 70% by reducing the consumption of fuel, sulfuric acid, and caustic soda, and by reducing emission levels. For its power production, it uses natural gas supplied from Iran and exchanges it with the electricity produced by the plant, while using the surplus energy for domestic consumption. On November 29, 2021 a new combined heat and gas power plant with installed capacity of 250 MW was launched in Yerevan. == Renewable energy resources and installations==

Armenia does not possess large fossil energy resources like coal, gas, or oil. However, according to a report by the Danish Management Group, Armenia has a large potential for renewable energy. Armenia has set a target to generate 26% of its domestic power from renewable resources by 2025. Hydro power Solar energy Wind power == Electricity consumption ==

According to Armstat total final consumption of electric energy in 2016 amounted to 458.2 ktoe and was broken down as presented on the graph to the right. In 2014, Armenia consumed 5352 GWh of the total 7956 GWh of electricity production (7750 GWh domestic production and 206 GWh imports). This is approximately 67.3% of the total. The biggest consumer was the residential sector (1924 GWh, ~24.2%). World Bank data referring to International Energy Agency demonstrates that in per capita terms electricity consumption in Armenia remains below world average and in 2014 only matched 1992 figure. == Electricity transmission and distribution ==

Distribution is controlled by Electric Networks of Armenia (ENA), High Voltage Electrical Networks, and Electro Power System Operator. There are over 36,000 km of distribution lines across Armenia. 100% of ENA shares were sold to Midland Resources Holding company. Revenues of Electric Networks of Armenia amounted to 181 billion AMD in 2018, less from 191 billion in 2017. Transmission and distribution losses remain high in Armenia, even compared to Russia. A World Bank survey from 2013 reveals companies would experience a power outage only about 4 times a year (at par with countries like Hungary and Latvia). International interconnectors There are interconnectors to Georgia and Iran. It has been suggested that if the Black Sea Energy submarine cable is built there could be exports to the EU too. == Financial aspects ==

Exports For three kilowatt hours of electricity Iran pays a cubic metre of gas. Supplier tariffs Electricity supplier prices are determined by the Settlement Center of Ministry of Energy Infrastructures and Natural Resources of Armenia. Solar installations of 150 kW or less are allowed to sell their excess energy back to the electrical grid. Reports published by Electricity Networks of Armenia have highlighted that Yerevan Thermal Power Plant, which is modernized with funding from Japanese and European technologies, is much more energy-efficient than the older Thermal Power Plant in Hrazdan, and therefore sells electricity to the grid at half the price (15.5 AMD vs. 25 / 31 AMD). Despite this however, the plant is not utilized to its full capacity, with a greater proportion of electricity aquired from less efficient TPPs in Hrazdan, owned by Gazprom and Tashir Group, which sell more expensive electricity, resulting in higher overall prices for consumers. Electricity Networks of Armenia is also owned by Tashir Group. Supplier tariffs are more favorable for producers of electricity from renewable sources. At the beginning of 2019, rates (excluding VAT) were: • Electricity tariff for power supplied from SHPP that are built on natural water streams was 23.805 AMD / kW·h. • Electricity tariff for power supplied from SHPP that are built on irrigation systems was 15.867 AMD / kW·h. • Electricity tariff for power supplied from SHPP that are built on natural drinking sources was 10.579 AMD / kW·h. • Electricity tariff for power supplied from wind farm was 42.739 AMD / kW·h. • Electricity tariff for power generated from biomass was 42.739 AMD / kW·h. • Electricity tariff for power generated from solar photovoltanic installation was 42.739 AMD / kW·h. Consumer tariffs and billing Electricity tariffs are dependent on the time of day (night/day), and the voltage supplied to the customer. Tariffs are determined by the Public Services Regulatory Commission of Armenia while wholesale prices are determined by the Settlement Centre CJSC and submitted to Electric Networks of Armenia. There were protests (Electric Yerevan) from June to September 2015 over a price increase for electricity, which was increased by 6.93 AMD per kilowatt-hour (AMD/kWh) (~US$0.015/kWh) to 39.78 AMD/kWh (~US$0.0830). After protests prices were decreased from August 1, 2016, by 2.58 AMD/kWh (~US$0.0054) from 48.78 AMD/kWh (~US$0.1018) to 46.2 AMD/kWh (~US$0.0964). By the end of December 2018 further decrease of tariffs by 10.01 AMD per kWh for socially insecure population was announced. Subsidies Depending on the amount of electricity consumed, the Government of Armenia subsidizes electricity bills of consumers who utilize less than 500 kWh of electricity per month. Billing Customers are billed monthly in kWh. (the Armenian post office), banks, payment terminals, and electronically via mobile apps, SMS, and via the Internet. Funding ENA's benefit (Electric Networks of Armenia) from low-rate state-loans amounted to 3.77 billion AMD in 2018 and 4.0 billion AMD in 2019. ENA received a loan from the World Bank in 2016 to pay debts owed to electricity producing companies in Armenia, primarily the Metsamor Nuclear Power Plant and the Yerevan Thermal Power Plant. == Future plans and investments ==

There are numerous investment opportunities in the sector as Armenia has significant potential for electricity production from renewable energy sources such as hydropower, wind, solar, geothermal, and biogas. Armenia also has a large solar energy potential. Compared with other countries, the average annual energy flow is higher; therefore, there is large interest in this energy sector. In May 2018 deputy minister of energy infrastructure and natural resources mentioned that the electricity market liberalization process began and a local production of solar panels kicked off. He said that it is planned to make the solar energy share reach at least 10% in the energy sector by 2022. 314 solar power stations with up to 500 kW capacity are connected to the electricity network in Armenia, while 85 other solar power stations are in the stage of connection with a total capacity of 5.2 MW. 4 systemic solar stations are connected to the network, 7 are in the construction phase with completion planned within this year with the total capacity is 10 MW. Nearly 600 families are already using solar energy in non-gasified communities under state funded projects alone. In July 2015, a US$58 million investment project was launched, which was designed to help the renewable energy sector. This project included plans for solar power stations of 40-50 MW capacity. In April 2019 it was announced that German company Das Enteria Solarkraftwerk will build a 2 MW strong solar station near Shorzha at lake Sevan by end of 2020. Energy efficiency In 2012, US$1.82 million was invested by International Bank of Reconstruction and Development in an energy saving program. The program planned to upgrade the insulation of public buildings and heating systems, which included replacing traditional lamps with LEDs, and installing solar water heating panels. On 30 June 2016 the project's grant component had been completed. == See also ==