By Swann Bigot, lawyer and consultant in international affairs, for Eurasia Network – February 7, 2017

2-kw-photovoltaic-station-installed-on-the-roof-of-st-sarkis-church-in-yerevan-photo-source-eu-armenia-web-portal-on-renewable-energy-the-armenian-weekly-january-201

A 2 kW photovoltaic station on the roof of St. Sarkis Church in Yerevan.

Photo credits : EU-Armenia Web Portal on Renewable Energy – The Armenian Weekly January 2010.

A tender for the construction of a 50 MW solar power plant in Armenia will be announced in February. The plant will be located in Mets Masrik in the Gegharkunik region, in the eastern part of the country.

This will be the first solar power plant of this kind in Armenia.

The candidate that will propose the lowest tariff with best technologies will gain the right to implement the project.[1]

The plant is expected to be completed in 2018. In case of success of this first project, five other solar power plants would be built across the country.[2]

The feasibility study has been carried out by the Spanish consulting firm ARIES ENERGIA.[3]

Last year the Armenian government approved the investment program for the construction of solar power plants for a global cost estimated at $ 129 million. Several industrial solar power plants up to 110 MW will be built in different regions of Armenia, informed the Ministry of Energy Infrastructure and Natural Resources.[4]

An energy forum to attract foreign investors

During an investment forum organized in Yerevan in the framework of the “Energy Week 2017” from January 25 to 27, foreign investors have shown their serious interest in the construction of industrial solar power plants in Armenia, informed the Ministry of Energy in a press release.[5]

The event aimed at presenting the latest developments in Armenia in energy efficiency and renewable energy sources, existing problems, investment opportunities and projects.

Several reports on investment climate, energy system, investors’ risk mitigation solutions and other issues in Armenia have been presented.

More than 40 foreign companies have attended the event with more than 400 representatives. The program for the construction of a 50 MW solar power plant was presented during the investment forum. Participants have discussed the possibilities of funding for the project.[6]    

The President of Armenia Mr. Serzh Sargsyan, the World Bank Country Manager Mrs. Laura Bailey, the Deputy Minister of Energy Infrastructure and Natural Resources Mr. Hayk Harutyunyan, representatives of international institutions, non-governmental and financial organizations, foreign investors, private and public sector representatives and experts took part in the opening ceremony of the event.

Armenian officials have explained the legal framework and the incentives decided by the government and have presented guarantees to potential investors.

During the forum, the Armenian President Serzh Sargsyan said that Armenia has a great potential for solar energy development.[7]

The President added that there are opportunities for world companies to take part in the competition for construction of solar power plants in the country.

Serzh Sargsyan explained that Armenia plans to significantly increase the overall share of renewable energy sources in the energy balance in the upcoming years, by constructing solar, wind and geothermal power plants.

The necessary legislative base has been formed for this purpose.

The President concluded by saying that the development of renewable energy sources is very important for the national energy development strategy.

Investors from different countries, such as France, Germany, Spain, Italy, Holland, Switzerland, USA, United Arab Emirates, India, Iran, Lebanon, China, Russia, Ukraine and others have attended the forum.[8]

Almost all international companies involved in the event expressed their willingness to participate in the tender for the construction of a 50 MW solar power plant in Gegharkunik region, reported Tamara Babayan, Director of the Armenia Renewable Resources and Energy Efficiency Fund.[9]

The Deputy Minister of Energy Hayk Harutyunyan told journalists that Armenia has created favorable conditions for renewable energy projects as the government has used all the tools to promote the industry.[10]

The Deputy Minister is convinced that this sector will show a steady growth thanks to the financial incentives decided by the Armenian government.

According to him, power plants up to 150 kW will be exempt from all taxes and licenses. The import of solar panels will be free of taxes. Moreover, the state-owned company “Electric Networks of Armenia” will buy the excess of electricity generated with a guarantee of purchase at a fixed price over 20 years, explained the Deputy Minister.

A Spanish company involved in the project

The Spanish consulting firm ARIES INGENIERÍA Y SISTEMAS has already presented feasibility studies concerning two of the six surveyed areas for the construction of solar power plants. [11]

The two projects are located in Mets Masrik in the Gegharkunik region and in Dashtadem in the Aragatsotn region. The study of the four other localities is underway.[12]

ARIES INGENIERÍA Y SISTEMAS conducts feasibility studies and offers advisory services that include the financial structuring of the solar power projects, preparation, support, evaluation of the tender procedure to select investors and negotiation.

Funding from international organizations

Armenia has received a $ 2 million grant and a $ 26 million loan from the Climate Investment Fund’s Scaling-up Renewable Energy Program (SREP) funded by the International Bank for Reconstruction and Development (IBRD) to cover the costs of the development of solar energy sources in Armenia.[13]

The loan terms are favorable – 0.25% per year with a maturity of 40 years and a grace period on payments in the first 20 years.

The granted funds enable Armenia to carry out searching work to select best areas and to develop feasibility studies for the construction of several solar power plants with a global capacity reaching 100-120 MW.

Armenia is developing renewable energy sources

Armenia has just started to develop its renewable energy sources sector.

The country receives a high amount of solar radiation throughout the year. As the cost of the solar power technology has drastically decreased over the past years, this solution has become attractive.

According to Bloomberg news agency, solar prices worldwide are down 62 percent since 2009.[14]

Last year the Armenian government approved an investment program for the construction of solar power plants, for a global cost estimated at $ 129 million.

These solar power plants projects are a big step for a country without production of oil and gas. Armenia imports these resources from Russia and Iran. 

A number of legislative reforms have been recently carried out aimed at creating an attractive environment for investors in the renewable energy sector, by using the best global practices.

The current energy mix of Armenia is diversified with 45% of available capacities covered by hydropower, 40% of capacities covered by thermal power and 15% by nuclear in 2015.[15]

Hydro power produced 28% of electricity generated in 2015, nuclear power produced 36% and thermal power generated 36%.[16]

The Armenian energy sector output has grown by 46% between 2010 and 2015, rising from $ 249 million to $ 443 million.[17]

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Sources : 

[1] “Программа строительства солнечных станций будет представлена на инвестиционном форуме », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 20.01.2017 : http://www.minenergy.am/ru/article/794 ;

[2] « В Армении объявят тендер на строительство первой солнечной станции », Black Sea News, 25.01.2017 : http://www.blackseanews.net/read/125936 ; В Армении объявят тендер на строительство первой солнечной станции – 25.01.2017 : http://elektrovesti.net/51275_v-armenii-obyavyat-tender-na-stroitelstvo-pervoy-solnechnoy-stantsii ;

[3] ARIES ENERGIA, “Masrik-1 PV Plant – Feasibility Study” : http://r2e2.am/wp-content/uploads/2017/01/PEF2827-132-Masrik-1-FS-presentation-R00-MLC-FINAL-1.pdf ;

[4] « Программа строительства солнечных станций будет представлена на инвестиционном форуме », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 20.01.2017 : http://www.minenergy.am/ru/article/794 ;

[5] “Почти все компании готовы участвовать в тендере на строительство солнечной электростанции », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 30.01.2017 : http://www.minenergy.am/ru/article/802 ;

[6] “Программа строительства солнечных станций будет представлена на инвестиционном форуме », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 20.01.2017 : http://www.minenergy.am/ru/article/794 ;

[7] « Президент Армении Серж Саргсян видит большой потенциал в развитии в Армении солнечной энергетики », Armenpress, 25.01.2017 : https://www.armenpress.am/rus/news/875903/prezident–armenii-serzh-sargsyan-vidit-bolshoiy-potencial.html ;

[8] « Energy Week 2017 », Armenia Renewable Resources and Energy Efficiency Fund, http://r2e2.am/en/2017/01/energy-week-2017-2/#more-8170 ;

[9] “Почти все компании готовы участвовать в тендере на строительство солнечной электростанции », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 30.01.2017 : http://www.minenergy.am/ru/article/802 ;

[10] « В Армении объявят тендер на строительство первой солнечной станции » – 25.01.2017 : http://www.blackseanews.net/read/125936 ;

[11] Aries Ingeniería y Sistemas firma, « Aries Ingeniería y Sistemas firma contrato con la autoridad en energías renovables de Armenia para Proyecto de Planta de Energía Fotovoltaica », Sala de prensa, 11.07.2016 : http://www.aries.com.es/es/sala-de-prensa/noticias-corporativas/aries-ingenieria-y-sistemas-firma-contrato-con-la-autoridad-en-energias-renovables-de-armenia-para-proyecto-de-planta-de-energia-fotovoltaica/id/601 ;

[12] “Программа строительства солнечных станций будет представлена на инвестиционном форуме », Министерство Энергетических Инфраструктур И Природных Ресурсов Республики Армения, 20.01.2017 : http://www.minenergy.am/ru/article/794 ;

[13] Aries Ingeniería y Sistemas firma, « Aries Ingeniería y Sistemas firma contrato con la autoridad en energías renovables de Armenia para Proyecto de Planta de Energía Fotovoltaica », Sala de prensa, 11.07.2016 : http://www.aries.com.es/es/sala-de-prensa/noticias-corporativas/aries-ingenieria-y-sistemas-firma-contrato-con-la-autoridad-en-energias-renovables-de-armenia-para-proyecto-de-planta-de-energia-fotovoltaica/id/601 ; Александр Аванесов, « Испанская компания намерена  вложить 200 млн евро в строительство в Армении солнечных электростанций », Financial Portal Arm Info, 26.01.2017 : http://finport.am/full_news.php?id=28117&lang=2 ;

[14] “Solar Could Beat Coal to Become the Cheapest Power on Earth”, Bloomberg, January 3, 2017 : https://www.bloomberg.com/news/articles/2017-01-03/for-cheapest-power-on-earth-look-skyward-as-coal-falls-to-solar ;

[15] « Sustainable Energy », Ministry of Energy Infrastructure and Natural Resources of Armenia : http://r2e2.am/wp-content/uploads/2017/01/Sustainable-Energy.pdf p.4 ;

[16] « Sustainable Energy », Ministry of Energy Infrastructure and Natural Resources of Armenia : http://r2e2.am/wp-content/uploads/2017/01/Sustainable-Energy.pdf ;

[17] « Sustainable Energy », Ministry of Energy Infrastructure and Natural Resources of Armenia : http://r2e2.am/wp-content/uploads/2017/01/Sustainable-Energy.pdf ;