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ARMENIA'S ENERGY IS BETWEEN THE DEVIL AND THE DEEP BLUE SEA
by Samvel Sarksyan
ARMINFO
Tuesday, September 4, 17:09
The energy branch of Armenia seems to develop according to the scenario
of the theater of the absurd, senselessness of which is that the
authorities of the country ignore interests of their own people and
pour water at the mill of the Russian gas business and local oligarchs.
In 2004 Armenia's National Assembly adopted a law "On energy supply
and renewable power generation". Three years later, the government
adopted the "National programme of power supply and renewable
power generation", and in another three years - the programme of
the government's actions directed at implementation of the national
programme. It turns out that six years were necessary to give birth
to the legislative basis for implementation of good intentions. That
is to say, instead of creation of favorable conditions for increasing
capacity for generation of hydro, wind, sun and geo-thermal energy,
the resources of which are rather big in Armenia, they have been
generating it on the basis of the imported gas at the thermal stations,
and of nuclear fuel - at Armenian nuclear power plant.
It means that our energy dependence on friendly Russia and Iran has
been growing. There is also another negative factor - the growth of
the gas releases at thermal plants, which results in the growth of
payments for the air pollution, according to the Aarhus Convention.
The data of Armenian National Statistics Service for the first half
of 2012 versus the first half of 2011 are evidence of the fact that
generation of power with a help of the "blue fuel" - has grown. Gross
output of energy grew by 9,1% up to more than 4,058 bln kWt/h. The
power generation at thermal plants grew by 44,2% up to 1,471 bln kWt/h,
whereas Armenian Nuclear Power Plant increased power generation only
by 3,6% up to 1,412 bln kWt/h, and hydro power plants decreased power
generation by 12% to 1,175 bln kWt/h. In the "International Energy
Corporation" (the owner is Russian "RusHydro") they assured Arminfo
correspondent that reduction of rainfall and rivers flow affects the
power generation at hydro power plants of Armenia. But in that case,
how can one explain the fact that the level of the Lake Sevan, the
key water inlet, has not changed and the government allowed water
pass from the lake for agriculture needs in rather big amounts.
The main loss because of poor generation of power is that it is
compensated by generation of expensive power using gas. According
to the data of Public Services Regulatory commission (PSRC), the
average power tariff for the first half of 2012 generated at one part
of Razdan Power Plant that belongs to "Electric networks of Armenia",
was 29,23 drams ($0,071), whereas the generation volume was 325,52 mln
kWt/h. As for the 5th bloc of the same plant, that works according to
the steam and gas cycle and belongs to "ArmRusgasprom" - 25,98 drams,
whereas the generation volume was 232,53 mln kWt/h. As for the new
energy block of the Yerevan power plant which also works according
to the steam and gas cycle, the average tariff was 6,06 drams and
the energy generation volume - 180,39 53 mln kWt/h. As for the energy
generation at hydro power plants of the energy system of Armenia, it
is cheaper. At Sevan-Razdan Cascade the average tariff for the first
half of 2012 was 0,92 drams (generation volume 331,44 mln kWt/h);
at Vorotan hydro power plant - 4,63 drams (generation volume 451,35
mln kWt/h). The average energy tariff generated at all small hydro
power plants of Armenia amounted just to 19,52 drams.
Nobody says that thermal energy generation should not be developed
in Armenia, especially that it is being developed according to the
machinery when Armenia returns energy to Iran instead of the gas
delivered from this country. But one must not forget that development
of small hydro energy is more useful for the country taking into
account the fact that Russian gas has been always growing and
threatening to reach the level of the world market tariffs. This may
result in the power tariff raising for the Armenian consumers which
are not so much credit worthy.
To recall, when the programme on upgrading of the 5th energy block
of Razdan Power Plant (investments of the Russian Gasprom) and of
the new energy block of the Yerevan thermal plant (Japanese credit
taken by the government) started, functionaries of Armenia's Energy
Ministry hoped that surplus of the power generated in Armenia will
be delivered to the neighboring Turkey and Georgia. But all was in
vain, as the political relations between Armenia and Turkey did not
normalize. As for Georgia, it preferred to import cheap energy from
Azerbaijan. As a result, the aggregate capacity of the power plants
of Armenia reached 3,2 thsd megawatt, whereas the country uses only
1,2 thsd megawatt even in the cold summer season. Against such a
background, one can consider at least doubtful the plans on purchase
of the Turkmen energy through Iran. This issue will be discussed at
the forth inter-governmental Turkmen-Armenian commission on economic
cooperation, on 5 September of the current year in Yerevan. A question
arises: what are the volumes of the Turkmen energy to be delivered to
Armenia? And how it will be used in Armenia? Will it be cheaper than
the energy generated in Armenia? If yes, will it affect the tariff
and reduce it? There is an idea that it will replace power generation
at hydro power plants of Armenia. It turns out that it is better to
organize centralized flow of energy from abroad and control it just the
same way as they do it in many monopolist spheres of import. As for
development of renewable energy in the context of further increasing
of capacity of small hydro power plant, unfortunately, we have to
forget about it, as there are many people which want to build the
generating capacities based on the renewable sources of energy,
especially that donors grant big credits for that. We mean specific
investments, new technologies and job places.
by Samvel Sarksyan
ARMINFO
Tuesday, September 4, 17:09
The energy branch of Armenia seems to develop according to the scenario
of the theater of the absurd, senselessness of which is that the
authorities of the country ignore interests of their own people and
pour water at the mill of the Russian gas business and local oligarchs.
In 2004 Armenia's National Assembly adopted a law "On energy supply
and renewable power generation". Three years later, the government
adopted the "National programme of power supply and renewable
power generation", and in another three years - the programme of
the government's actions directed at implementation of the national
programme. It turns out that six years were necessary to give birth
to the legislative basis for implementation of good intentions. That
is to say, instead of creation of favorable conditions for increasing
capacity for generation of hydro, wind, sun and geo-thermal energy,
the resources of which are rather big in Armenia, they have been
generating it on the basis of the imported gas at the thermal stations,
and of nuclear fuel - at Armenian nuclear power plant.
It means that our energy dependence on friendly Russia and Iran has
been growing. There is also another negative factor - the growth of
the gas releases at thermal plants, which results in the growth of
payments for the air pollution, according to the Aarhus Convention.
The data of Armenian National Statistics Service for the first half
of 2012 versus the first half of 2011 are evidence of the fact that
generation of power with a help of the "blue fuel" - has grown. Gross
output of energy grew by 9,1% up to more than 4,058 bln kWt/h. The
power generation at thermal plants grew by 44,2% up to 1,471 bln kWt/h,
whereas Armenian Nuclear Power Plant increased power generation only
by 3,6% up to 1,412 bln kWt/h, and hydro power plants decreased power
generation by 12% to 1,175 bln kWt/h. In the "International Energy
Corporation" (the owner is Russian "RusHydro") they assured Arminfo
correspondent that reduction of rainfall and rivers flow affects the
power generation at hydro power plants of Armenia. But in that case,
how can one explain the fact that the level of the Lake Sevan, the
key water inlet, has not changed and the government allowed water
pass from the lake for agriculture needs in rather big amounts.
The main loss because of poor generation of power is that it is
compensated by generation of expensive power using gas. According
to the data of Public Services Regulatory commission (PSRC), the
average power tariff for the first half of 2012 generated at one part
of Razdan Power Plant that belongs to "Electric networks of Armenia",
was 29,23 drams ($0,071), whereas the generation volume was 325,52 mln
kWt/h. As for the 5th bloc of the same plant, that works according to
the steam and gas cycle and belongs to "ArmRusgasprom" - 25,98 drams,
whereas the generation volume was 232,53 mln kWt/h. As for the new
energy block of the Yerevan power plant which also works according
to the steam and gas cycle, the average tariff was 6,06 drams and
the energy generation volume - 180,39 53 mln kWt/h. As for the energy
generation at hydro power plants of the energy system of Armenia, it
is cheaper. At Sevan-Razdan Cascade the average tariff for the first
half of 2012 was 0,92 drams (generation volume 331,44 mln kWt/h);
at Vorotan hydro power plant - 4,63 drams (generation volume 451,35
mln kWt/h). The average energy tariff generated at all small hydro
power plants of Armenia amounted just to 19,52 drams.
Nobody says that thermal energy generation should not be developed
in Armenia, especially that it is being developed according to the
machinery when Armenia returns energy to Iran instead of the gas
delivered from this country. But one must not forget that development
of small hydro energy is more useful for the country taking into
account the fact that Russian gas has been always growing and
threatening to reach the level of the world market tariffs. This may
result in the power tariff raising for the Armenian consumers which
are not so much credit worthy.
To recall, when the programme on upgrading of the 5th energy block
of Razdan Power Plant (investments of the Russian Gasprom) and of
the new energy block of the Yerevan thermal plant (Japanese credit
taken by the government) started, functionaries of Armenia's Energy
Ministry hoped that surplus of the power generated in Armenia will
be delivered to the neighboring Turkey and Georgia. But all was in
vain, as the political relations between Armenia and Turkey did not
normalize. As for Georgia, it preferred to import cheap energy from
Azerbaijan. As a result, the aggregate capacity of the power plants
of Armenia reached 3,2 thsd megawatt, whereas the country uses only
1,2 thsd megawatt even in the cold summer season. Against such a
background, one can consider at least doubtful the plans on purchase
of the Turkmen energy through Iran. This issue will be discussed at
the forth inter-governmental Turkmen-Armenian commission on economic
cooperation, on 5 September of the current year in Yerevan. A question
arises: what are the volumes of the Turkmen energy to be delivered to
Armenia? And how it will be used in Armenia? Will it be cheaper than
the energy generated in Armenia? If yes, will it affect the tariff
and reduce it? There is an idea that it will replace power generation
at hydro power plants of Armenia. It turns out that it is better to
organize centralized flow of energy from abroad and control it just the
same way as they do it in many monopolist spheres of import. As for
development of renewable energy in the context of further increasing
of capacity of small hydro power plant, unfortunately, we have to
forget about it, as there are many people which want to build the
generating capacities based on the renewable sources of energy,
especially that donors grant big credits for that. We mean specific
investments, new technologies and job places.