Energy Sector issues in Armenia : research

Abstract

In any country Energy Sector is the core branch of national economy. Adequate supplies of energy at competitive prices are essential to maintaining and improving Armenian economy and enhancing the standard of living. Nowadays Energy Sector is one of the most developed branches of the Republic’s economy. But during several years from 1992 to 1995 the Energy System of Armenia was plunged into a deep energy crisis. That crisis was caused by several factors including: -decommissioning the Armenian Nuclear Power Plant in 1989 after the severe 1988 earthquake in the Republic; -the liberalization of fossil fuel prices in the supplier countries; -the transportation problems; -the infringement of the former power connections. During the years of the energy crisis and afterwards Energy Sector has always been of a primary concern of Armenian Government. Presently, the energy crisis in Armenia has been completely overcome. The objective of this research was to study issues that Energy Sector of Armenia still faces. It was revealed that geopolitical situation of Armenia requires power independence insurance of the country. It was well known that Armenia and Azerbaijan are still technically in war and Turkey blockades Armenia in sympathy. Therefore, old natural gas and fossil fuel supply systems do not function today. The route of the gas pipe that is currently exploited lies on the territory of Georgia. That gas pipe had been damaged many times in the passed years. As a consequence, gas supply of Armenia has been frequently interrupted and the whole Republic was paralyzed. For these reasons Armenian Government adheres to the power security increase politics. Currently, approximately 80% of electricity is produced from imported resources. In order to increase power independence it is necessary to develop Energy Sector on the base of own resources. The only indigenous source for power generation in Armenia is hydro energy. Putting into operation new Hydro Power Plants will decrease dependence from imported resources up to 60%. Construction of the second gas pipe (Iran-Armenia) also will contribute to the power security increase of the country.