20-25% Growth in Electricity Exports Expected in 2017 - PM Visits Ministry of Energy Infrastructures and Natural Resources

Prime Minister Karen Karapetyan visited the Ministry of Energy Infrastructures and Natural Resources to discuss energy policy, long-term (up to the year 2036) development strategy for the energy sector, infrastructure investment programs, as well as a number of issues related to the mining industry.

The Prime Minister stressed the importance of consistent implementation of programs to increase energy security, develop regional cooperation and increase energy exports. Karen Karapetyan stressed that an aggressive strategy has to be implemented in this area as Armenia has the necessary potential. The Premier highlighted the need to streamline the licensing process in mining industry.

Minster of Energy Infrastructures and Natural Resources Ashot Manukyan first reported back progress in the implementation of Prime Minister’s recommendations, noting that they had already drafted the list of non-gasified communities. There are 329 such communities in Armenia with 150 thousand residents, which is about five percent of the population.

The Ministry is going to submit specific proposals concerning each community by this July 1. Talks are underway with partner organizations to discuss the possibility of ensuring gas supply in some of these communities; alternative solutions are being sought for the other communities.

Evoking the Premier’s instruction on making an inventory of licenses issued in the mining industry, the Minister said that 463 licenses have been issued to date, of which 196 are at a standstill. 51 licenses have expired. Only 8 out of 28 metal mines are operating at this point of time. Ashot Manukyan stressed that they would submit to the government general and specific recommendations for the further development of the mining sector.

Speaking about the program of modernization and partial extension of the period of operation of the second unit of the Armenian NPP, Mr Manukyan said two thirds of activities are nearing completion. USD 136 million has been spent instead of the planned 205 million, which makes 34 percent in savings. As of this May 10, the NPP will put on a standstill for 60 days to ensure the continuity of the ongoing programs.

Speaking about the non-gasified communities, Prime Minister Karapetyan stated as follows, “I feel that you have opted for the right path. In this way, we will improve the population’s living standards and develop our communities.”

Evoking the issue of non-operational companies in mining industry, the Prime Minister noted, “One thing is clear: we do not want to offend the investors or create any barriers whatsoever. We will do so as a last resort only if we understand that there is no alternative.” Karen Karapetyan emphasized that the contract terms and rules should be set out clearly in granting licenses.

Reference was made to economically viable renewable energy projects featuring small hydropower, solar, wind energy plants, the possibility of enhancing energy efficiency and promoting the use of these resources.

With reference to the long-term (up to 2036.) energy system development strategy, the Prime Minister instructed to finalize it considering energy diversification, renewable energy resources, as well as the level of energy dependence, regional programs, tariff predictability, noting that it was important in terms of attracting investment.

Karen Karapetyan attached importance to the development and expansion of regional cooperation in the field of energy resources mediating intensive efforts with neighboring countries. 20-25% growth in electricity exports is expected this year.

Work is underway to increase exports. It was also noted that the one-year-old Energaimpex Company has already signed relevant contracts with Georgia that led to reciprocated energy flows on February 15. According to the ministry officials, the new arrangement is making full use of the existing transmission lines with Georgia.

Work is underway to enter the Eurasian Economic Union’s energy market over the next couple of years. A market liberalization program in the energy sector will soon be presented to the Government.

The meeting also discussed issues related to investment projects in infrastructure, modernization and development of traditional and geothermal energy. It was noted that geothermal energy is being developed with a USD100 million-worth investment program. The investment package will be submitted to the Government in 2017.

Until 2021 it is planned to complete the modernization of high-voltage substations, which will increase the reliability of power supply, construction of Armenia-Iran and Armenia-Georgia 400 kV power transmission lines, which in turn will promote Armenia-Iran-Georgia-Russia quadrilateral regional development.

Work on extension of the operation period of the second unit of the Armenian NPP is due to be completed by 2020. In the same year, a 250 MW combined-cycle thermal power unit will be commissioned in Yerevan, which will comply with the mutually beneficial gas-electricity exchange agreement between Armenia and Iran.