In Armenia, as well as in other CIS countries, the transition to a market economy was accompanied by deep economic recession. The situation was further exacerbated by factors related to resource capacity and economic structure, as well as the earthquake of 1988 and an economic blockade. After a sharp recession in 1991-1993, during which the economy shrunk by 70 percent in comparison to 1989 levels, Armenia's gross domestic product (GDP) grew by an average of 5.4 percent from 1994-2000. By 2002, GDP per capita was $623, GDP per capita by purchasing power parity was $3,312.
Energy Sector
Electricity is currently generated from thermal, hydro, and nuclear resources, with no significant utilization of renewable energy sources. In 2001-2002, Armenia produced 5.7 to 5.9 billion kWh where 45 percent was derived from thermal, 34 percent from nuclear, and 21 percent from hydro sources.
The Problem
Energy supply became a critical issue for Armenia in late 1991, when Azerbaijan shut down the main pipeline transporting Russian gas to Armenia. This meant that a smaller pipeline through Georgia, which was subject to disruption, remained as the sole source of natural gas for electricity generation and heating. The ensuing energy crisis was a major motivation for the Armenian Government's controversial decision to re-open the Metzamor Nuclear Power Plant, which was shut down after the earthquake of 1988. This action alleviated the immediate energy shortfall. Despite extensive safety improvement made in recent years, this Soviet-designed facility is considered inherently unsafe by international nuclear regulatory agencies. While Armenia has significant hydroelectric power potential, increased output in this sector has resulted in the reduction of water in the country's largest lake, Sevan, to ecologically dangerous levels.
The Heating sector has one of the largest potentials for energy efficiency improvements and reduction of significant environmental externalities. This is in part due to the collapse of the district heating systems in early 1990s, and the present heavy reliance on wood and electricity for residential heating.
End-use energy consumption is extremely inefficient, with significant system losses, usage patterns, and degraded infrastructure, all of which contribute to a system that is unsustainable in its present form from both the economic and environmental perspectives.
The Alliance's Response
To address these challenges, the Alliance has a three-tier program to promote energy saving and energy efficiency.
For more information about MUNEE in Armenia visit MUNEE.org, or contact:
Astghine Pasoyan
Alliance to Save Energy
apasoyan@ase.org
