An EU and EBRD-backed fund will finance the construction of a 4 MW solar power plant in Aragatsotn, western Armenia although the level of investment, which is expected to be provided in tailored financing, has not yet been disclosed. The photovoltaic solar power plant will contribute to the development of Armenia’s renewable energy sector and decrease CO2 emissions in the country.
The project is the first investment by the EU-Armenia SME Fund, managed by Amber Capital, in Armenia’s renewable sector.
Armenia has great potential for solar energy production with an impressive 1720 kWh of solar energy flow per square meter per year. In the EU, the same indicator is equal to 1000 kWh. The Government of the Republic of Armenia is currently strongly encouraging solar energy production by implementing various state programs. As of 31 May 2019, within the context of the «Energy Efficient» credit program, 2685 solar water heaters and 101 solar photovoltaic systems had been installed in those communities lacking gas supply which is one of the main fuels used in the country.
According to the donors, the new solar power plant will begin operation by the end of 2021. The facility will be operated by Armenian solar plant operator, Solis LLC. The plant is expected to generate 7.5 GWh of clean energy per year thus enabling the country to avoid 3,200 tonnes of CO2 release annually. The engineering and construction of the facility has been awarded to Ecoville LLC on a tender basis. The project aims to create around 50 new jobs.
The project will boost the solar capacity of the country according to the Head of the Armenia EBRD office, Dimitri Gvindadze. “Increasing the production of clean energy is an important step in reducing carbon emissions in Armenia and addressing climate change. […] One of the core objectives of the EBRD is the transition towards a low-carbon economy”, said Gvindadze.
Currently, Armenia plans to construct a utility-scale solar power plant with 50-55 MW capacity in the Gegharkunik region with an expectation that another five solar plants with about 60 MW total capacity will be built in the forthcoming years. As of July 1, 2019, there were 1233 autonomous energy producers in Armenia with an overall capacity equal to 19.3 MW.
To meet current energy demand, Armenia relies mainly on imports of fossil fuels such as oil and gas while electricity production depends mostly on the nuclear sector. As far as renewable energy is concerned, the main sector is hydropower which has a total capacity of 1324.4 MW.
The energy balance in the Republic of Armenia sets solar thermal energy production to be equivalent to 8.5 tons of oil and solar PV production to be equivalent to 6.2 tons of oil. Overall, in 2019, the structure of electricity output was dominated by the thermal power sector at 39.9% followed by the hydropower sector at 31%, the nuclear sector at 28.8%, and other sources accounting for 0.3%.
