ARMENIAN GOVERNMENT REAFFIRMS PLANS TO BUILD NEW NUCLEAR PLANT
By Emil Danielyan

Eurasia Daily Monitor, DC
March 7 2006

Yerevan seeks investors to replace Metsamor nuclear plant The Armenian
government has pledged to press ahead with the realization of its
extremely ambitious plans to build a new nuclear power station in
place of the aging Metsamor plant, which is due to be shut down by
2016. Underlining the seriousness of its intentions, it has asked
parliament allow it to start looking for foreign and/or private
investors interested in participating in the project. Government
officials insist that continued use of atomic energy for peaceful
purposes is vital for the landlocked country’s energy security,
dismissing concerns expressed by environment protection groups.

The Metsamor plant was built in the late 1970s and closed for safety
reasons in the aftermath of the catastrophic 1988 earthquake that
devastated much of northwestern Armenia. The Soviet-era facility,
located about 30 kilometers west of Yerevan, was brought back into
service in 1995, ending severe power shortages suffered by the newly
independent state for several consecutive years. It currently accounts
for nearly 40% of Armenia’s electricity output.

The European Union and the United States tried in vain to prevent
the first-ever reactivation of a nuclear plant in the world, saying
that Metsamor’s sole operating reactor fails to meet modern safety
standards. The EU considers the VVER 440-V230 light-water-cooled
reactor to be one of the “oldest and least reliable” of 66 such
facilities built in the former Soviet Union and Eastern Europe. The
EU and the United States had essentially no choice but to acquiesce
Metsamor’s reactivation and help Armenia to significantly boost its
safety. They have each spent tens of millions of dollars for that
purpose over the past decade.

Officials from the International Atomic Energy Agency (IAEA) also
regularly inspect the Armenian nuclear plant. “I think the cooperation
[between Armenia and IAEA] has been good,” the head of the United
Nations nuclear watchdog, Mohamed ElBaradei, said during a visit to
Armenia in July 2005. “I think there has been a commitment to continue
to strengthen safety at Metsamor.” ElBaradei added that the Armenian
authorities intend to keep the reactor operational “for around ten
years,” a time frame that has since been repeatedly reaffirmed by
the Energy Ministry in Yerevan.

The administration of President Robert Kocharian successfully
withstood EU pressure to decommission the plant in 2004. Whether the
Europeans approve of its desire to have a new, more modern plan is
not yet known. “The European Union has only been informed about our
plans. We have had no discussions on it,” Deputy Energy Minister Areg
Galstian said in an interview with the Hayots Ashkhar daily published
on March 2.

Galstian and other government officials estimate that construction
of the new nuclear plant will cost at least $1 billion, a sum that
roughly equals Armenia’s state budget for this year. They admit that
the project cannot be implemented without foreign participation,
which they say is rendered impossible by the Armenian government’s
legal monopoly on nuclear energy.

The government asked parliament earlier this year to remove a clause
upholding that monopoly from an Armenian law on energy. However,
it was forced to temporarily withdraw the proposal on March 1
after facing unusually strong resistance from the National Assembly,
which is dominated by Kocharian supporters. Many lawmakers, including
speaker Artur Baghdasarian, whose Orinats Yerkir Party is a member of
the governing coalition, worry that the proposed amendment is a mere
prelude to Metsamor’s partial or full sale to Russia. Unified Energy
Systems, Russia’s state-run power monopoly, was already granted control
over Metsamor’s finances in 2003 in return for clearing its $40 million
debt to Russian suppliers of nuclear fuel. The concerns publicly
voiced by Baghdasarian and his colleagues reflect a growing public
sense that the Russian presence in Armenia’s energy sector is already
disproportionately strong and should not turn into a stranglehold.

Government officials were at pains last week to allay these fears,
ruling out Metsamor’s sale. “That amendment is meant for the new
nuclear plants to be built after its passage and has nothing to do
with Metsamor,” Energy Minister Armen Movsisian assured reporters. “I
believe that presenting the opposite to the people is populism.”

It is unclear which foreign country or firm might be interested in
making large-scale investments in the would-be Armenian plant.

Galstian, Movsisian’s deputy, acknowledged that no potential foreign
investor has so far expressed readiness to participate in the
project. He said the government would make public its nuclear energy
strategy in greater detail “in two or three months.”

It will hardly convince local environmentalists, who have long argued
that a country located in a seismically active zone must not have
any nuclear facilities in principle. They say the authorities should
instead increasingly rely on renewable sources of energy such as wind,
the sun, and especially water. According to Energy Ministry estimates,
those sources could potentially meet as much as 70% of Armenia’s
energy needs. Hydroelectric plants built on the country’s fast-flowing
mountain rivers already provide more than a quarter of Armenian
electricity. Building more such plants would clearly cost far less
than replacing Metsamor with another nuclear facility. The Kocharian
administration has yet to explain why it prefers the latter option.

(Hayots Ashkhar, March 2; Hayastani Hanrapetutyun, March 2; RFE/RL
Armenia Report, February 28; July 28, 2005)