ARMENIA: CONTEMPLATING LIFE AS A REGIONAL ELECTRICITY EXPORTER
Haroutiun Khachatrian
EurasiaNet
Oct 31 2008
NY
Armenia may have no energy sources of its own, but the country stands
potentially poised to become a major exporter of electricity in the
South Caucasus and beyond, analysts say.
The role is not entirely novel. In Soviet times, Armenia exported
electricity to neighboring Soviet republics and to Turkey, noted Sevak
Sarukhanian, an analyst with Noravank, a Yerevan think-tank. After
1991, "the consumption of electricity inside Armenia declined sharply
due to the change in industrial capacities, so it is not surprising
that Armenia seeks the chance to sell power it its neighbors,"
Sarukhanian said. Areas of Iran, Turkey and Georgia that border
Armenia are all energy-deficient, he maintained.
The new Iran-Armenia pipeline has already raised expectations about
Armenia’s ability to export consistently high levels of electricity
within the region, although details remain outstanding.
In recent years, Armenia has exported electricity to two of its
neighbors, Iran and Georgia, but these exports were relatively small
in volume and irregular in nature. Exports to Georgia have primarily
targeted the predominantly ethnic Armenian Samtskhe-Javakhetia region,
and could vary from 600 million kilowatt hours in one year to zero
in another, according to the Armenian Ministry of Energy and Natural
Resources.
Next year may prove a turning point. A September 15 report from
Armenia’s Ministry of Energy and Natural Resources claimed that
an agreement on exporting electricity Turkey was reached during
Turkish President Abdullah Gul’s September 5 visit to Yerevan. [For
background see the Eurasia Insight archive]. Armenia’s state-owned
power exporting company, and the Belgian company UNIT Group, which is
involved in electricity distribution and power generation in Turkey
and Romania, signed the deal, according to the ministry. The exports
would reportedly start next year.
Within Armenia, the main question is whether or not Turkey would allow
such imports. Turkey closed its land border with Armenia in 1993 in
solidarity with its ally, Azerbaijan, during that country’s war with
Armenia over the separatist Nagorno-Karabakh region. [For background
see the Eurasia Insight archive].
Officially, however, no Turkish embargo on Armenian imports exists. But
while such a "regulation" does not exist, "[o]n the other hand,
? companies have to get export and import permission, and the general
understanding is that they would not be given such permission in
[the] case of Armenia," commented Professor Mustafa Aydin, head of
the department of International Relations at Ankara’s Tobb University.
Aydin believes, however, that the UNIT Group must now be seeking
such permission from the Turkish government, in conjunction with
the aforementioned export agreement. UNIT Group could not be reached
through the company email or phone numbers posted on its website.
At a September 24 public discussion on energy issues, Armenia’s energy
and natural resources minister, Armen Movsisian, stated that the UNIT
Group is working on solving existing problems, and the export deal
will be enacted in the coming months. The UNIT Group intends to import
at least 1.5 billion kilowatt hours of power next year, and later,
even more, the Armenian ministry said in its September 15 report.
If this materializes, Armenia would need to increase regular
production of electricity by some 25 percent, up from recent annual
production levels of 6 billion kilowatt hours per year. That number may
increase still further; on October 5, Iran reportedly began importing
electricity from Armenia in exchange for natural gas. An affirmation
from Armenia’s energy ministry that it "does not yet have a need"
for the gas, however, has put a question mark over the extent of any
electricity exports to Iran.
Meanwhile, work continues on diversifying Armenia’s power-generating
capacity and enhancing its reliability as an exporter. ArmRosgazprom
Director Karen Karapetian has announced that the company plans to
complete work on the fifth, unfinished section of its Hrazdan thermal
power plant, Armenia’s largest such facility, by early 2010. This new
section will be more efficient and consume less gas than the existing
four sectors, which are more than 30 years old.
One specialist, however, has expressed concern about the chances
for the plant’s modernization, however. Economist Tatul Manaserian,
a former National Assembly deputy, believes that modernization may
be delayed as Gazprom, the Russian energy company that is the main
shareholder in ArmRosgazprom, struggles to contend with the emerging
international financial crisis. "Gazprom has many projects in Russia,
and I am not sure that the Armenian station will be given priority,
in case of financial problems," Manaserian said.
The planned construction of a new nuclear power plant could add to
that diversification. Manaserian expressed greater optimism about
Russian investor participation in that project, given its strategic
importance. The proposed plant, with a capacity of 1,000 megawatts,
is expected to be built in the city of Metsamor, 40 kilometers west
of Yerevan. It will have a capacity of at least 1,000 megawatts,
as opposed to the 407 megawatts of the existing nuclear power plant,
long a target for outside criticism.
Editor’s Note: Haroutiun Khachatrian is a freelance writer based
in Yerevan.