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ENERGY REVOLUTION IN ARMENIA
Hakob Badalyan, Political Commentator
Business - 31 March 2015, 12:41
The energy sector of Armenia has reached its pre-crisis level. During
the management of the Armenian transmission network the Russian
owner Inter RAO's debt has amounted to several hundreds of million
dollars, and the networks are facing a financial crisis threatening
with another rise in price of electricity. According to the press,
the Russia-based Armenian tycoon Samvel Karapetyan, the owner of
Tashir Group, is likely to buy the networks.
While the Armenian energy sector is facing crisis, an energy revolution
is happening in the world.
According to Lazard, over the past 5 years the cost of wind energy
has decreased by 58%. In 2014 the cost of solar energy per megawatt
was 56 USD, and wind energy costs 14 USD per megawatt. These amounts
are with subsidies. Without subsidies solar energy costs 78 USD per
megawatt and wind energy costs 37 USD per megawatt.
Even without the subsidy, solar energy is close to the cost of gas
and coal which cost 61 and 66 USD respectively, and wind energy is
twice cheaper. Technological development of renewable energy has
reduced costs.
This is facilitated by the government policy which lays out regulatory
and tax administration mechanisms which help reduce the costs of
alternative energy. In addition, the costs go down not only in
large-scale productions. The cost of solar power generated on house
roofs is getting cheaper too.
The energy revolution is gathering momentum and is already an
irreversible reality. The problem could be the dynamics and scales,
i.e. how many years it will take the new energy to become dominant.
There is a problem here because the oil and gas lobby will resist but
it will not be possible to stop the technological revolution in time.
And this is already a chance for Armenia in two aspects. First,
renewable energy is highly important for Armenia which is in an
economic and political dependence on import of carbohydrates from
Russia.
Besides, Armenia is rich in engineering and technical thought and the
world energy revolution is the arena where Armenia can find its new
place and role in the world, becoming part of and contributing to the
technological revolution in the world, as well as making Armenia an
"isle" of the energy revolution in the region.
To achieve this, renewable energy must become a priority of the state
policy of Armenia. To promote this direction, fundamental approaches
to state regulation are needed, including almost full tax exemption of
investments in renewable energy, several years of full tax exemption
of investments and research and development in this sphere, which
will raise the interest of global thought and technology in Armenia,
thereby opening up new perspectives for the Armenian thought.
However, these steps require a government whose understanding of
economy is not limited to supply of tomatoes and cucumbers to the
Russian markets, whose dreams fly higher than the hills of Yerevan
and everyday tarmac-level luxuries and borders with the global history
and prospects of the civilization.
http://www.lragir.am/index/eng/0/economy/view/33856
From: Baghdasarian
Hakob Badalyan, Political Commentator
Business - 31 March 2015, 12:41
The energy sector of Armenia has reached its pre-crisis level. During
the management of the Armenian transmission network the Russian
owner Inter RAO's debt has amounted to several hundreds of million
dollars, and the networks are facing a financial crisis threatening
with another rise in price of electricity. According to the press,
the Russia-based Armenian tycoon Samvel Karapetyan, the owner of
Tashir Group, is likely to buy the networks.
While the Armenian energy sector is facing crisis, an energy revolution
is happening in the world.
According to Lazard, over the past 5 years the cost of wind energy
has decreased by 58%. In 2014 the cost of solar energy per megawatt
was 56 USD, and wind energy costs 14 USD per megawatt. These amounts
are with subsidies. Without subsidies solar energy costs 78 USD per
megawatt and wind energy costs 37 USD per megawatt.
Even without the subsidy, solar energy is close to the cost of gas
and coal which cost 61 and 66 USD respectively, and wind energy is
twice cheaper. Technological development of renewable energy has
reduced costs.
This is facilitated by the government policy which lays out regulatory
and tax administration mechanisms which help reduce the costs of
alternative energy. In addition, the costs go down not only in
large-scale productions. The cost of solar power generated on house
roofs is getting cheaper too.
The energy revolution is gathering momentum and is already an
irreversible reality. The problem could be the dynamics and scales,
i.e. how many years it will take the new energy to become dominant.
There is a problem here because the oil and gas lobby will resist but
it will not be possible to stop the technological revolution in time.
And this is already a chance for Armenia in two aspects. First,
renewable energy is highly important for Armenia which is in an
economic and political dependence on import of carbohydrates from
Russia.
Besides, Armenia is rich in engineering and technical thought and the
world energy revolution is the arena where Armenia can find its new
place and role in the world, becoming part of and contributing to the
technological revolution in the world, as well as making Armenia an
"isle" of the energy revolution in the region.
To achieve this, renewable energy must become a priority of the state
policy of Armenia. To promote this direction, fundamental approaches
to state regulation are needed, including almost full tax exemption of
investments in renewable energy, several years of full tax exemption
of investments and research and development in this sphere, which
will raise the interest of global thought and technology in Armenia,
thereby opening up new perspectives for the Armenian thought.
However, these steps require a government whose understanding of
economy is not limited to supply of tomatoes and cucumbers to the
Russian markets, whose dreams fly higher than the hills of Yerevan
and everyday tarmac-level luxuries and borders with the global history
and prospects of the civilization.
http://www.lragir.am/index/eng/0/economy/view/33856
From: Baghdasarian