Armenia Alternative Energy

Sector outlook

To tackle its emerging power supply gap and its heavy reliance on imported fuels, Armenia has built a viable energy system and now aims to develop less costly sources of energy and increase the energy diversification. The country has potential to quintuple the contribution of renewable electricity between 2010 and 2020.

The Law on Energy Savings and Renewable Energy created a legal basis for alternative energy in 2004. The National Programme on Energy Savings and Renewable Energy identifies the sectors with the largest energy efficiency potential.

Strategic direction/ specific schemes and incentives

  • 25% of demand today covered by renewable and alternative energy, at least 30% by 2030;
  • A supportive legal and regulatory framework: Energy Law and the Law on Renewable Energy and Energy Efficiency, approximation of the EU legislation is underway;
  • Advantages for investors: attractive feed-in tariffs, mandatory off-take of all the electricity generated for 15 years after receipt of an operating license, exemption from customs duties on equipment, 3 years exemption of VAT for wind energy.

Business opportunities

Hydropower and wind resources are estimated to be the most attractive alternative energy options in Armenia. Several investment proposals are available through ADA. The main opportunities are:

  • Small and medium-size hydropower plants: over 250 MW of capacity could be added. Investment opportunities include mid-size Loriberd and Shnogh hydropower plants on the Dzoraget river in the North of the country;
  • Wind power: wind energy potential estimated at 470 MW with an annual generation of 1360 GWh. Investments opportunities include 34 MW wind power plant “Simyonovka”;
  • Geothermal power: investments opportunities include 25 MW power plant “Jermaghbyur”;
  • Solar energy: photovoltaics and solar thermal power. Solar water heaters are among the most economical options in Armenia. A Dutch and an Armenian company have developed water heaters working on solar batteries to be presented soon to potential investors;
  • Biomass : biogas from animal husbandry wastes and from landfill;
  • Energy efficiency: projects in public facilities (highest returns, with paybacks of two to ten years), industrial projects.

Some success stories

Armenian companies operating in the field of renewable energy include:

SolarEn LLC, a manufacturing, project development, and consulting company which developed projects in Armenia and in the CIS countries in partnership with several foreign partners such as InterSolarCenter (Russia), Fraunhofer Solar Institute (Germany), INETI (Portugal), AWEA (USA) and NREL (USA).

Transistor Plus Ltd, an engineering company involved in clean energy technologies. It carries out design, installation and maintenance of renewable energy systems including bioenergy, solar thermal and PV. It also manufactures components for solar energy systems (PV modules, DC to AC power inverters, solar tracking systems, UPS).

Orange Armenia, an affiliate of France Telecom/ Orange (France) launched the first solar energy-operated base station in Armenia in the Syunik region in 2012, as part of a global programme aiming at reducing the group’s footprint. For every solar base stations used, at least 35 tons of CO2 and 13,000 litres of fuel are expected to be saved per year.

This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of EUROCHAMBRES and can in no way be taken to reflect the views of the European Union.

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