22 April 2024

Monday, 18:30


Armenia may face an energy crisis due to unresolved issues with neighbours



Armenia experienced a brief energy crisis due to the suspension of electricity supplies from Iran earlier this month. Along with Gyumri and Vanadzor, power outages affected 70 % of Yerevan on 2 November, which seriously questioned the government's energy policy.

Coupled with this, the repair work carried out at the nuclear power plant, which meets 35% of the capital's demand for energy in normal conditions, created a very difficult situation in Yerevan.

The Ministry of Energy and Natural Resources of Armenia stated that the repair and maintenance work at the nuclear plant, which began on 22 September, will be completed by the end of November, and the demand for electricity during this period will be provided by Iran. It was noted that the cause of the brief power outage was maintenance work on the Iranian power lines on 2 November. Energy Minister Armen Movsisyan said that the existing lines are pretty outdated, and therefore require improvements as soon as possible.

As a result of failures in the supply of natural gas and electricity, various public organizations of Armenia stepped up work related to the introduction of alternative energy sources.

Politicians, who favour the use of the country's internal resources in the medium-term to meet its own demand for electricity, argue that it is necessary to implement initiatives involving the use of water resources. Aimed at reducing energy dependence on Russia and Iran, the topic has weighty public support. Currently, the river and water energy resources of the country are being scrutinized.

Today Armenia operates about a dozen of hydroelectric power stations that provide one third of the country's electricity. In an effort to increase the performance of the energy sector, Armenia is establishing energy cooperation with Iran, an integral part of which is the construction of the Megri hydroelectric power plant on the Araz River. The financial sponsor of the major project worth 350m dollars is Iran. It is planned to complete the construction of hydroelectric power in 2016. At the same time, this project is faced with a sharp protest from neighbouring Azerbaijan, through the territory of which the Araz also flows. Baku rules out any regional cooperation with Armenia until it withdraws its troops from the occupied territories of Azerbaijan. Moreover, Armenia has not yet joined the Convention on the Protection and Use of Transboundary Watercourses and International Lakes and continues to have a negative impact on water resources, bypassing international norms.

The Arpacay Reservoir and the western part of the Araz River are also of vital importance for Armenia. But the unfavourable geographic location of these bodies of water is not conducive to the active development of projects related to these resources. Barely maintaining funding for small-scale power plants in the west of the country, Armenia cannot afford to actively participate in the implementation of another regional project on the Debed River, which flows near the border with Georgia. In addition, the unresolved issues related to the use of water resources of the two countries slow this project, too.

On the other hand, the Metsamor nuclear power plant, which has been working since the 1970s, is capable of meeting 40% of the country's energy needs. For many years after the 1988 earthquake in Spitak, which caused great damage to the power plant, the neighbouring countries have been seeking the closure of the nuclear power plant by all means in order to prevent damage to the countries of the region.

This problem is still on the agenda of the European Union, which has repeatedly stated the need to close it by 2016. But the persistence with which Armenia continues to use the nuclear power confuses the situation even more. Armenian officials recognize the danger of the nuclear power, but at the same time, declare that there are no other alternatives that can meet the energy needs of the country. The issue of other sources of energy in the event of the closure of the Metsamor nuclear power plant causes heated debates and increasing confrontation between the government and its opponents. It is estimated that in the coming years, Armenia's dependence on water resources will continue to grow.

In 2013, Armenia faced higher prices for Russian gas, which directly influenced other energy sectors of the country. Yerevan understands that the operation of power plants and agricultural land requires greater use of water resources, but due to the lack of capacity and energy partners in the region, this country is going through great domestic political problems. The Armenian gas crisis coincided accurately with the statement of Turkish officials about the planned construction of a new dam on the Araz River - only 2 kilometres from the border with Armenia near the town of Igdir. Moreover, the Turkish side is not hiding that this facility will prevent the use of the water resources of the Araz by the Armenian side, which caused strong discontent in Armenia. Yerevan's inability to participate in this and a number of other projects such as improving the irrigation system on the Arpacay River or dam construction, coupled with the failure of the Armenian leadership in the hitherto frozen process of the normalization of relations with Turkey, are a trump card in the hands of the Armenian opposition. Denying the possibility of a compromise in addressing problems, Armenian officials state that Turkey has established a "water embargo".

On the other hand, the situation in the Sarsang reservoir is on the agenda. The facility is situated on the territory of Nagornyy Karabakh occupied by Armenia. In August 2013, the leadership of the breakaway republic declared the rationality of jointly using the Sarsang reservoir with Azerbaijan. Baku, of course, ignored the request of the Armenian separatists. And there is no need for Azerbaijan to cooperate with Armenia in any energy initiatives.

Turkey fully supports the position of Azerbaijan on the joint use of water resources and, therefore, in the short-term Turkey is unlikely to involve Armenia in any energy projects. 

Thus, the neighbours' "energy embargo" on Armenia, provoked by the conflict in Nagornyy Karabakh, will continue to have a detrimental impact on the economic and political situation in the country. And as long as Armenia conducts an aggressive policy against its neighbours, the joint use of transboundary water resources for energy purposes with Yerevan is not possible.