YEREVAN (RFE/RL)–Armenia inaugurated on Wednesday a new thermal power plant that will allow it to considerably cut back on use of natural gas for electricity production.
The state-of-the-art plant was built in Yerevan in place of an obsolete facility with a $247 million loan provided by the Japanese government through the Japan Bank of International Cooperation (JBIC). The long-term loan was disbursed to the Armenian government on concessional terms in 2007.
With a capacity of 242 megawatts, its gas-powered turbine will be able to generate approximately one-quarter of Armenia’s current electricity output. Officials said it will also be twice as efficient as the plant’s decommissioned unit and four other Soviet-era facilities of its kind functioning in the central Armenian town of Hrazdan.
According to Energy and Natural Resources Minister Armen Movsisian, this is the main reason why the domestic price of electricity will not increase this year despite the recent 17 percent rise in the cost of gas imported from Russia. Thermal power plants currently meet roughly one-third of Armenia’s electricity needs.
“It was possible to keep electricity tariffs unchanged in 2010 because of the fact that this new plant will go into service on April 21,” Movsisian told journalists during the opening ceremony that was also attended by President Serzh Sarkisian.
Movsisian described the new plant as the first major energy facility built in the country since independence. He said it will not only enable Armenia to economize on natural gas but also cut carbon emissions.
Armenia’s energy sector will expand further after the ongoing construction of the Hrazdan plant’s new and even more powerful Fifth Unit. Russia’s Gazprom monopoly acquired the incomplete facility in 2006 as part of a complex agreement with the Yerevan government that raised its controlling stake in the Armenian gas distribution network to a commanding 80 percent. The Russian giant pledged to spend more than $200 million on finishing its protracted construction by 2011.
The new Yerevan and Hrazdan facilities will pave the way for large-scale Armenian imports of natural gas from neighboring Iran through a pipeline constructed in late 2008. Armenia began receiving modest amounts of Iranian gas in May last year. With Russian gas essentially meeting its domestic needs, it is expected that the bulk of that gas will be converted into electricity and exported to the Islamic Republic.
Movsisian revealed on Wednesday that his government would like to construct yet another thermal power plant in the coming years. “I hope that we will be able to build another plant of this kind which will boost the capacity of our energy system and have a greater effect on our economy,” he said.
Armenia has had an electricity surplus ever since overcoming a severe energy crisis in the early and mid-1990s by reopening its Soviet-built nuclear power station at Metsamor nearly 15 years ago. Metsamor’s sole operating reactor produces over 40 percent of its electricity and is due to be shut down in 2017.
The Armenian government plans to replace it by a modern, twice as powerful facility by that time. The Russian-designed reactor is due to be built by a Russian-Armenian joint-venture set up late last year.