ARMENIA’S ENERGY SECTOR: A REGIONAL ACTOR WITH NO ENERGY RESOURCES
Haroutiun Khachatrian, Analyst and editor at the Noian Tapan Agency (Erevan, Armenia)
Armenia, a small country without fuel resources of its own and very limited alternative energy sources, is among those CIS countries that can boast of sustainable energy supplies. More than that, its energy export is growing by the year. Its success is partly rooted in the Soviet past when the republic learned to be thrifty with the available resources; since that time the republic has mastered the latest effective energy-saving technologies.
The Geopolitical Aspect
A predominantly mountainous land-locked country with no access to the largest main pipelines and forced to live in the context of the “frozen conflict” with Azerbaijan, a large regional energy fuel producer, Armenia is seemingly doomed to be in constant need of hydrocarbon fuels. This was how Armenia’s future looked in the first half of the 1990s when fighting in Nagorno-Karabakh was still going on, when Georgia was steeped in instability, and when, most importantly, the Abkhazian stretch of the railway was blocked in August 1992 at the beginning of the conflict in this area. Nevertheless, Armenia was the first among the region’s countries to restore sustainable energy supplies (in 1996) and start exporting electric energy. This happened because the power consumption of new economy that came to life after the crisis of the 1990s is noticeably lower than that of Soviet economy. The Armenian government has outlined and is carrying out several measures to strengthen the country’s energy security: (1) consistent supply of energy resources; (2) higher efficiency of electric power generation; (3) maximum reliance on renewable energy sources; and (4) thrifty energy consumption.
Available Energy Sources
The information supplied by the Armenian government suggests that in 2005 out of the total amount of 3,462 thousand tons of conventional fuel Armenia uses every year its own (renewable) resources comprised less than 7 percent (about 240 thousand tons, primarily hydro resources); 1,000 thousand tons, or 29 percent, were supplied by the Armenian Nuclear Power Station (ANPS) (Armenia imports nuclear fuel which the IEA classifies within the country’s own resources). The rest (63-64 percent) is supplied by energy resources which the country has to import on a permanent scale (gas and oil products). Natural gas holds the largest share—1,600 thousand tons, or 48 percent, of the country’s total energy basis (a large part of it is used to produce electric power; for detail, see below).
This means that natural gas production (and the electric power it produces) and non-gas power production are responsible for 83-84 percent of the country’s energy balance. They are obviously the key components of Armenia’s power production (the rest 16-17 percent belongs to the imported products) which explains why I have limited myself to analyzing these two spheres. We cannot exclude that in the foreseeable future Armenia will acquire an oil branch of………………