Armenia has two main hydro-electric cascades: on the Vorotan and Hrazdan rivers. Together, these two systems consist of nine power plants. Armenia also has the Metsamor nuclear power plant – the only one in the South Caucasus. Metsamor originally had two generator units, both of which were shut down after the 1988 Spitak earthquake because of safety concerns. In 1994, one of the two units was restarted. While the plant met the end of its design life in 2016, its license to operate has been extended, as is the case for many nuclear plants globally.

Armenia’s economic recovery during the late 1990s was characterized by low levels of technological advancement. More development requires substantial investment into the diversification of Armenia’s energy system and into the improvement of its infrastructure. Armenia has been distanced from regional infrastructure projects, particularly those that strengthen ties to Europe.

Energy Security

According to official government documents, among them Armenia’s 2025 Energy Sector Strategy and the energy security concept of October 23, 2013, the key elements needed to strengthen Armenia’s energy security are the diversification of primary energy resources and supply routes, regional integration of the energy system, development of nuclear energy, and greater use of geothermal, biogas, solar and other renewable energy sources for heating. Some projects have already been implemented within this framework, including new generating capacities of the Yerevan Combined Cycle Gas Power Plant, construction of the 440 MW Hrazdan-5 Combined Cycle Gas Turbine, agreements between Armenia and Georgia on synchronous operation, and emergency electricity imports. While key aspects of the security concept will not change, a new energy strategy is currently in development.

Energy Supply and Demand

Armenia does not possess any of its own fossil fuel resources and is not a transit country for oil and gas. Thus, it is heavily dependent on energy imports. Natural gas, nuclear fuel, oil products and limited amounts of coal are mostly imported from Russia. In an effort to diversify its energy supplies, the Armenian government signed an agreement with Iran in the fall of 2016 to import natural gas and export electricity.

Electricity Generation and Consumption

After Armenia’s 1992 fuel crisis, residents were rationed 2-4 hours of electricity per day and most households depended on firewood or electricity for heating (World Bank, 2011). Armenia’s Soviet-era nuclear power plant is still in operation and provided 40% of the country’s total energy production in 2015 (Lavelle and Garthwaite, 2015). At the same time, many of Armenia’s electricity generating plants are older than 40 years and are at the end of their design life cycle. They, as well as the electricity grid, require replacement or major refurbishment.

Growing electricity demand in Armenia requires that new power-generating capacity be constructed. It would be prohibitively expensive to increase the capacity of the nuclear plant and hydroelectric energy depends on weather and seasonal conditions.

Energy Imports and Exports

While Armenia imports most of its consumed energy, it is also a net electricity exporter, providing electricity to Georgia, Iran, and Nagorno-Karabakh. A challenge of electricity trading, however, is the fact that exports depend on the weather – electricity is usually exported in the summer, when surplus hydropower is available, and imported during the winter. A new transmission line between Armenia and Georgia is already under construction and expected to improve bilateral electricity trading and the security of supply.