Armenia increases energy diversification

Published: Saturday March 24, 2007

The inauguration on March 19 of Armenia's southern natural-gas pipeline was an important step for Armenia. The new pipeline will actively contribute to the increasing diversification of the country's energy supply.

Any economy requires a reliable energy supply to thrive. A growing economy like Armenia's also needs an increasing supply of energy.

With no traditional fossil fuels, Armenia has long relied mostly on gas and nuclear fuel from Russia to meet its energy needs. The Metsamor nuclear plant provides over 30 percent of Armenia's electricity. The plant, which is scheduled to be decommissioned in 2016, and should be closed earlier if possible, must be replaced by new sources of energy.

In an effort to increase and diversify its supply sources, Armenia has been actively working to develop alternative sources of energy.

The country is seeing the construction of new small hydroelectric plants and new wind farms. Several projects are underway in solar and biomass energy. Geothermal sources and a new nuclear power plant are also possibilities. There are even companies working on fuel cells and the use of hydrogen as a primary fuel.

Indeed, at the inauguration of the southern natural-gas pipeline this week, the energy ministers of Armenia and Iran signed an agreement to build hydro cascades along the border on the Araks River. Also this week, Cascade Credit announced that it was financing over $5 million of renewable energy projects in cooperation with the European Bank of Reconstruction and Development and the Global Environment Facility.

Armenia has a new pipeline from the south. The new, 40-kilometer (24-mile) stretch of pipeline in Armenia connects to a new, 100-kilometer stretch of pipeline in Iran. It will initially allow Armenia to import 400 million cubic meters of Iranian natural gas annually. After a second 100-km (60-mile) stretch is completed, the pipeline capacity will reach 2.3 billion cubic meters of gas a year.

With this pipeline operational, an important piece of Armenia's diversification puzzle is now in place.

Now Armenia must continue its efforts to foster the development of domestic energy sources. The European Union, the United States, and Russia, are mindful of the importance of regional integration for peace and stability. They should continue to invest in new power generation to replace Metsamor, and seriously explore the development of a new nuclear power plant to meet Armenia's needs and, indeed, allow it to export electricity. They - along with Armenia itself - should work harder to include Armenia in all regional infrastructure projects, especially energy projects like pipelines and transmission lines. These are some of the additional pieces that will make the puzzle whole.