Renewable Energy in Armenia

By: Tamara Babayan1, Areg Gharabegian2, Artak Hambarian3,
Morten Søndergaard4, Kenell Touryan5

Danish Energy Management in close consultations with main stakeholder and local experts in Armenia has prepared the Renewable Energy Roadmap for Armenia and its related technical studies which were funded by the Renewable Resources and Energy Efficiency Fund (R2E2) of Armenia under World Bank GEF Grant. This paper is a summary of the findings and conclusions of the studies and the roadmap.

Renewable energy development has been slow in the past but its application throughout the world is accelerating. Because the renewable energy industry is not yet at the same level of development as the more traditional energy industries, it needs a more favorable regulatory environment in the near-term for its development, survival, and transformation to a mainstream energy resource. Some renewable energy technologies are close to becoming commercial such as hydro, biomass, and wind. While other renewable energy technologies exhibit promising potential, they are less mature and require long-term vision, government encouragement, and favorable regulations to flourish.

Current Energy Status in Armenia

Armenia does not have any fossil fuel or coal reserves; therefore, it is entirely dependent on the exported fuel for transportation, electricity generation, and heat production. Armenia has overcome the energy crisis of the 90’s and has built a viable energy system. However, compared to the year 1988, which was the peak of economic output of Armenia, energy consumption lags far behind. Currently Armenia can meet only 35% of the total current demand for energy with its domestic resources.

Hydro power from Sevan-Hrazdan and Vorotan Hydro Power Plant cascades plus more than 150 small hydro power plants are only indigenous renewable energy generating sources of Armenia. But use of that Sevan-Hrazdan system has been curtailed substantially to save Lake Sevan by raising its water level. Presently there is a large effort in Armenia to use mini hydro plants on the small rivers and streams for generating electricity.

A number of old thermal power plants have been closed and one of the two reactors at the Metsamor Nuclear Power Plant has been shut down. Armenian government is planning to decommission Metsamor before 2021 and has embarked on an ambitious plan to build a new nuclear power plant to assure that Armenia will have electrical supply that is needed for its development and prosperity as well as enough electricity to become a major electricity exporter.

During the Soviet era, there were no air conditioning systems installed in most of the residential or commercial buildings and the district heating systems, powered by heavy oil (mazut) and natural gas were the main heating source. After the collapse of the USSR most of the urban centralized heating systems were dismantled. Now approximately 1/3 of the population, has installed individual natural gas powered heating systems and the use of air conditioning has increased noticeably.

The major changes in transportation are related mostly to the slow but steady increase in living standards in Armenia, which in turn has increased the number of privately owned cars. Increases in the use of natural gas as an alternative to gasoline has increased the proportion of natural gas powered vehicles to approximately 50% of the total vehicle fleet.

Renewable Energy Options

Renewable energy resources offer benefits because not only can they reduce pollution, but they also add an economically stable source of energy to the mix of electricity generation sources in Armenia. Depending only on imported fuel for energy production makes the country vulnerable to volatile prices and interruptions to the fuel supply. Since most renewable energy sources do not depend on fuel markets, they are not subject to price fluctuations resulting from increased demand, decreased supply, or manipulation of the market. The nation’s fossil fuel dependence also has serious implications for national security.

Hydro Power – Funding sources are readily available for the construction of new run-of-the river small hydro power generation systems or renovating existing systems. The main limitation is the availability of promising sites within reasonable proximity to good roads and transmission line access where more small hydro power generation systems can be constructed. Cost of installing electric power lines for renewable energy facilities at remote locations to get connected to the grid can be prohibitive from the perspective of overall commercial reliability. It is estimated that in 2020 small hydro power installed capacity will grow to be about 215 MW from the 100 MW that existed in 2010.

Wind Energy – According to a study, theoretically Armenia has 5,000 MW wind energy capacity. However, this does not mean that if there is capacity then it is equal to economically feasible electricity generation. Most of the areas with high wind are not easily accessible for heavy machinery that is needed for the installation of the wind turbines. Utility-scale wind farms are still not commercially viable under the existing government established electricity purchasing tariff structure from the perspective of attracting private capital investment without either additional fiscal incentives or subsidies. The attractiveness of these investments would grow as lighter weight turbines exhibit increased efficiencies and the cost of the turbines decreases over time. However, the main technical barrier is the difficulty in transporting large turbines and blades (52 meters in length) from a port of entry to the selected site in a mountainous country like Armenia. Therefore, not more than 300 MW of wind-generated capacity in 2020 would be a realistic number. As of now only 2.6 MW of wind power is operative in the Lori region.

Solar Energy – Even though Armenia has sufficient sunny days, residential and small scale solar electricity generation is still not an economically viable choice for Armenia due to the cost. Another alternative is the development of an industrial base in Armenia for manufacturing silicon-based solar cells in the country, using its abundant quartzite deposits. This alternative is expected to require an investment of approximately $300 million. Presently there are only few small pilot type solar panel installations in Armenia. However, using solar energy for water and space heating is a viable option for Armenia.

Bio Fuel – Bio-ethanol production is essential for Armenia in order to move in the direction of greater energy security of supply in the motor transport sector and to offset potential future increases in the cost of imported gasoline and compressed natural gas. Even a 5% blend of bio-ethanol with gasoline will replace approximately 14,000 tons of expensive imported fuel per year. However, the cost of production of bio-ethanol using indigenous non-food feedstocks, such as Jerusalem artichoke or animal corn feed, is presently above the wholesale cost of gasoline. This means that voluntary blending of bio-ethanol and gasoline is unfeasible unless mandated by the government. Armenian government is seriously considering starting producing bio-ethanol from home grown plants.

Geothermal – Recent explorations and test drilling conducted in Armenia have identified potential of only 75 MW. The economic viability for geothermal power in Armenia seems marginal, from both the perspective of cost and the total potential power output.

Municipal Waste – The average annual generation of municipal solid waste in Armenia today is estimated to be 1600 metric tons/day. The traditional disposal of municipal waste is in landfills or in mass burn incineration both of which generate serious environmental problems. Land for disposal is becoming increasingly scarce in urban areas and incineration emits toxic gases unless expensive sorting techniques are employed. The more recent and beneficial use has been to generate methane gas through anaerobic digestion, and then using the biogas to generate electric power.

Biogas – The Lusakert Biogas plant in Northern Armenia is the only industrial sized biogas facility in Armenia based on organic waste from poultry. Several years ago USAID had financed construction of approximately 40 small biogas units in the villages throughout Armenia, but most of these units are not operational because villagers much prefer to use the old style way of dried manure for heating and cooking, instead of using these units to generate biogas.

Biomass – Biomass for both heat and electricity production for the short term can be considered, under several conditions, including re-planting of harvested trees and using hybrid fast growing tree farms.

Environmental Benefits and Impacts

Renewable energy generation would have mainly positive, long-term environmental effects as it reduces the need for power generation based on fossil fuels, thereby reducing Greenhouse Gas (GHG) emissions. Approximately 2/3 of current power generation in Armenia is based on nuclear and hydro power which in turn lowers the per capita GHG emissions for Armenia. While still the reduction of the GHG emissions are among targets to pursue, the energy independence and reducing the cost of energy generation are of higher importance.

The main potential problems associated with small hydro power plant projects could be their impact on migrating fish stock if proper fish bypasses are not installed or proper precautionary measures are not implemented to avoid fish being sucked into the turbines. The main impacts resulting from the operation of wind farms are low frequency noise and visual pollution of the landscape. There is also a possibility of birds colliding with turbine blades.

Bio-fuel production results in virtually no net carbon emissions during a complete life cycle if forests are not destroyed to make land available for planting feedstock. Even though gasoline that is mixed with bio-ethanol has less CO2, the blend produces higher nitrogen oxide than gasoline, which is the main component that causes smog. Depending on the feedstock, the leftover by-products could be useful as fertilizer, fuel for operating processing plants, or become waste.

Possible impacts from solar electrical panels and solar water heaters could be the visual impact of reflected light. Burning fire wood crates air emissions and small particle matters that could be harmful to human health and there could be an impact to the eco system due to the unsustainable rates of harvesting biomass.


The findings of a comprehensive review of renewable energy potential in Armenia have ranked small hydro power plants and solar hot water heaters as the most economical for Armenia in the short to medium-term, followed by wind farms and the use of heat pumps. Photovoltaics, geothermal power, and bio-fuels, especially bio-ethanol, are ranked as more costly in today’s prices and are not expected to be commercially viable in the short to medium-term, but may play a more important role in the longer term. Biomass is also a viable source for heat and electricity production for the short term. Finally, although not strictly a renewable resource, municipal solid waste in landfills is a practical source for generating methane for power production.

Renewable energy may not be the major source of energy development in Armenia but it should be an important component of it. As a result of dropping prices of various renewable energy technologies, in the near future renewable energy production cost could be competitive with more traditional sources. Developing all feasible and economically viable renewable energy resources will create a stable domestic power generation capabilities, which in turn could be a major component of Armenia’s national security.


1 – Tamara Babayan is the director of the Renewable Resources and Energy Efficiency Fund (R2E2), Yerevan, Armenia.

2 – Areg Gharabegian is a Policy Forum Armenia Senior Fellow and principal project manager with Parsons, Pasadena, CA.

3 – Artak Hambarian is a professor in School of Engineering of American University of Armenia, Yerevan, Armenia.

4 – Morten Søndergaard is a project manager with Danish Energy Management, Denmark.

5 – Kenell Touryanis a visiting professor in School of Engineering of American University of Armenia, Yerevan, Armenia and retired researcher from NREL, Denver, CO.

This entry was posted in Areg Gharabegian, ENERGY. Bookmark the permalink.

1 Response to Renewable Energy in Armenia

  1. In the Jan.Feb. issue of ¨Yerevan¨magazine there is a very promising source of energy ,namely the Solar one derived from solar panels.Major partner and person who promises to expand the plant is an Armenian in L.A.USA.It would be a very good idea to contact him for his company to be invited to RA/Artsakh and commence a simialr project that he is planning stateside,for country of his ancestors,Armenia.
    Best luck to those who will attempt to have him accept to come to Armenia (with his compamny) and invest and start the same project in Armenia.
    presented by Gaytzag Palandjian

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