Vahe Davtyan: lternative power engineering should be developed regardless of fluctuations in electric power tariffs

The Public Services Regulatory
Commission of Armenia has already taken a decision to raise the electric power
tariffs on 1 August 2014. Is Armenia’s alternative power engineering competent
enough to speak of partial replacement of the traditional energy resources by
alternative ones?   

Unfortunately,
the need to develop alternative power engineering in Armenia is stressed only
when the electric power or gas tariffs are raised. I do not think it is a
healthy approach. First and foremost, it is necessary to understand that alternative
power engineering should be developed regardless of tariff fluctuations.
Alternative power engineering is not just a trend. Its development is real
investment in the future, especially for the countries that lack their own
traditional energy resources. Unfortunately, the excessively politicized energy
sector of the country mostly limits the full-fledged establishment of the
field. Therefore, I can give a negative answer to your question – no,
alternative energy cannot really compete with traditional power engineering in
Armenia today. In the meantime, however, one should realize that our country
has renewable energy sources and involvement of business in the given sector
with the support of the state may give the result that will allow us to speak of
competition with the traditional power engineering.

The
newly appointed Armenian Minister of Energy and Natural Resources, Yervand
Zakharyan, expressed his desire to familiarize himself with solar and wind
power engineering. How do you assess possible establishment of these fields in
our country?

First and
foremost, I’d like to welcome Mr. Zakaryan’s initiative, as studying the
problems of alternative power engineering at the government level offers hope
that there will be breakthroughs in the field. Speaking of the alternative
energy in Armenia, we mean solar, wind, geothermal and bio-energy. I wish the
government were interested in development of all the four sectors, but it is
studying the two most popular ones so far. Nevertheless, I think, all in good
time. As for the specific assessments, they are more than positive. In the
Soviet period of time, they began working in the field of alternative power
engineering in 1950s.  It was a
scientific research activity mainly in the field of solar energy. And it is
quite natural, as the sun hours in Armenia reach 2300-2500. It is for reason
that Armenia is called a sunny country. 

Sun is the most
popular source of pure and infinite energy. Armenia has big advantages in the
field of solar energy i.e. the weather and climate in the biggest part of the
country’s territory are mostly favorable due to relatively close location to
the tropical zone. The average annual value of the solar energy in Armenia for
every 1 sq/m of horizontal area is 1720 kWh per sq/m.  Meanwhile, in Europe this indicator is only
1000 kWh per sq/m. In warm seasons, the duration of sunshine in Armenia is 85%
of the annual indicator. In average, the duration of sunshine reaches 60%.
These are rather solid indicators to say that there are all the necessary basic
preconditions for full-scale development of solar energy sector in our country.

Can you say the
same about the wind power engineering?

 Not really.
Construction of wind power plants is rather expensive comparing with solar
technologies. According to USAID, the cost of a wind power plant with a
generating capacity of 1kWh in Armenia is approximately 1,000-1,300 US dollars.
To increase the summary capacity to 100 MW by 2020, 100-130 million USD will be
needed. Generally, the potential of the wind energy is 10,000 MW.  The promising areas for wind power
engineering in Armenia are the Pushkin, Karakhachinsk, Semyonov, Zod and Sisian
mountain passes, and the Charentsavan district. 
It is noteworthy that Armenian power engineers have certain experience
in building wind power plants. Thus, in 2005, the first wing power plant in
Armenia with a capacity of 2.6 MW was put into exploitation.  It was built on a 3.5 million dollars grant
from the Iranian Government.  The plant
is located in the Pushkin mountain pass, Lori region, Armenia, at the height of
2060m above sea level.  The plant is
equipped with four wind turbines. The average annual generating capacity is 5
million kWh and the service life is 20 years. 
It was the first wind power plant in the South Caucasus.  The main problem hindering development of the
given sector is the tariff.  The cost
value of the wind power is rather high and the final tariff will hardly be attractive
to consumers.  Incidentally, after the
rising electric power tariff in Armenia, the final cost of the wind power
generation can become competitive.

Does it mean that
the rising electricity rate is a good opportunity to start developing the wind
power engineering in Armenia?

Sure. Yet 3-4 years
ago, the main reason impeding development of the wind power engineering in
Armenia was the low cost of electric power. Then the tariff was some 25
drams per kWh.  According to
relevant calculations, the sector will become attractive for investors only in
case the tariff is at least 40 drams per 1 kWh. 
Such tariff would be too high for the population then. Now, starting 1
August the electric power in Armenia will rise by 3.85 drams to 41.85
drams.  Make your own inferences.

How much important it is for the government to involve in the
comprehensive development of alternative power engineering in Armenia?

Obviously,
to develop alternative energy in Armenia, it is necessary to establish the
government-private sector cooperation. Not only technical issues, but also
insufficient market regulation impedes the development of alternative  power engineering in Armenia.  The government’s stance in development of
such strategically important system as the energy security, including the
alternative energy, is of major importance.