Moving towards solar energy: will Armenia give up its nuclear power plant?

Arthur Khachatryan

Yerevan

The largest solar power plant in Armenia will be built with funding from investors from the United Arab Emirates. Its capacity will be 200 megawatts, and the volume of invested funds will reach $174 million. This project will become one of the largest investments in the Armenian economy in recent years.

Station “Ayg-1” will become a part of the energy system of Armenia, in which the share of solar energy continues to grow. Instead of the current 2%, it is planned to increase the share of solar energy up to 15% of all electricity produced in the country by 2030. The figure seems incredible, but the dynamics of recent years make it quite achievable.

Experts’ opinions on a possible increase in the use of renewable energy in Armenia and whether or not the country should and will be able to abandon its nuclear power plants.

Station “Ayg-1″։ Why the UAE is investing in Armenia

In order to choose the company that would build a solar power plant of this capacity, a competition was held. The Arab structure offered the lowest price of the generated electricity – 2.9 cents. This makes solar energy competitive with nuclear and thermal energy and the 174 million dollars of investment is urgently needed for the Armenian economy that is currently still in recovery from the effects of the pandemic and the second Karabakh war.

After the Velvet Revolution of 2018, investments of such a scale did not reach Armenia.

The UAE company agreed to invest in Armenian solar energy for two reasons. Firstly, this sphere has been developing dynamically in recent years, and the territory of Armenia is considered one of the most successful for the development of solar energy.

The average annual inflow of solar energy per 1 m2 of horizontal surface is 1720 kWh / m2 (Central European – about 1000 kWh / m2). A quarter of the territory of Armenia has solar energy resources with an intensity of at least 1850 kWh / m2 per year.

On top of that, the division of assets was also beneficial for the UAE company. 85% of the company’s shares will belong to the investor and 15%- to the state. The Republic of Armenia also pledged to buy the entire volume of electricity produced by the station over the next 20 years.

So far, no power plants of the same capacity as “Ayg-1” have been built in Armenia. The largest of its kind is also under construction now. It will reach a capacity of 55 megawatts.

Hakob Vardanyan, Deputy Minister of Territorial Administration and Infrastructures of Armenia:

“After the launch of this station, the energy security of Armenia will rise. This will reduce dependence on gas, since the station will operate on a renewable resource”.

How solar energy is developing in Armenia

Armenia started building solar power plants in 2015. In a couple of years, the first stations were put into operation. Their power did not exceed 1 mW. Then the cost for 1 kWh was 42 drams. The number of solar power plants in the country grew in parallel with the decline in the price of manufactured products, which made this type of electricity more competitive. Over time, the price for 1 kWh dropped to 22 AMD, and the dynamics of the decline did not stop there.

In parallel with this, companies began to appear on the market that produced and placed solar panels in Armenia. As a result, individual farms began to switch to renewable energy. Now, especially in rural areas, entire villages are installing mini-stations on the roofs of their houses thus eliminating the need to pay utility bills.

The cost of the panels is also decreasing, and this creates the preconditions for the individual households to completely abandon gas consumption.

Solar panels are also massively installed by small and medium businesses, as well as by some government agencies and educational institutions.

Karen Asatryan, Head of the Armenian Renewable Energy and Energy Efficiency Fund:

“Over the past 3 years, about 4,600 solar stations connected to the general energy system have been installed. The total volume of their generated electricity now reaches 89 megawatts. This is a large figure and it continues to grow. It is noteworthy that most of it falls on business”.

What indicators does Armenia expect by 2030

The country’s energy system consists of four main branches – nuclear, thermal, solar and wind energy, as well as small and medium-sized hydroelectric power plants.

In 2020, together, they produced a total of 2,730 MW of electricity. 27% of the total share fell on the Metsamor nuclear power plant, 43% – on thermal power plants, another 28% were produced by hydroelectric power plants while the remaining 2% fell on solar and wind power plants.

The solar and wind energy indicators might seem modest, but back in 2017, the figure did not exceed 0.1% of the electricity produced in the country. If one is to have faith in the government program and the statements of those responsible for the field, solar energy will become one of the fastest-growing sectors of the economy, and the current indicators will grow incomparably.

By 2030, Armenia intends to attract up to $600 million of investments in the sphere of solar energy, and the share of such energy should reach 15%.

In addition to Ayg-1, another large station, Masrik-1, is being built in the country. If these two projects are completed, together they will provide 255 MW, which is already a serious indicator for Armenia.

The country is also actively launching pilot programs and discussing the potential for building “floating” solar installations. Armenia also has experience in the construction of wind farms; this direction is also a priority for the government.

Hayk Shekyan, expert:

“Taking into account international trends, which in the long term suggest that technologies will improve and become cheaper, we can safely conclude that neither 15% nor 20% is the limit. I am personally sure that renewable energy can completely replace the traditional one”.

Can Armenia give up nuclear energy

In parallel with the development of renewable energy and the construction of the Yerevan thermal power plant, a discussion is unfolding among the expert community on whether Armenia should and can refuse to operate the Metsamor nuclear power plant.

European partners have repeatedly spoken about the need to close the Armenian nuclear power plant. The Comprehensive and Enhanced Partnership Agreement with the EU clearly states that the station should be closed, but does not specify a timeframe.

“I think we have been tasked with setting the deadline for the closure of the nuclear power plant. Sooner or later we will face this problem, we cannot exploit it forever”, says Armen Manvelyan, an expert on energy geopolitics and international security issues.

However, the Armenian authorities will definitely not close the station in the near future. In March of this year, work began to prolong its operational capacity until 2036.

During this time, the Armenian authorities intend to build a new nuclear power plant in the country. Yerevan categorically refuses to give up atomic energy. Experts are confident that nuclear energy plays a key role in Armenia’s energy security.

Ara Mardzhanyan, Energy Security Expert:

“We have only two facilities that guarantee energy security. These are the Vorotan HPP cascade and the Armenian NPP. The new strategy states that Armenia must have a harmonious three-component generation system, and nuclear energy is an integral part of our energy security strategy”.