Artsakh`s energy security: Post-war challenges and opportunities 

ArmInfo.Energy security is a cornerstone of the Republic of Artsakh’s (Nagorno-Karabakh Republic) economy, given that it is important for powering economic activity, safety and societal development, and enabling human security of its citizens.

The 2020 Nagorno-Karabakh War, also known as the 44-day war, exacerbated and created challenges to achieving energy security in Artsakh. It is reported that the war significantly hindered potential for development of Artsakh and damaged or destroyed energy infrastructure, primarily hydroelectric power plants. Due to the new energy risks and the importance of Artsakh’s energy security for its economy and sovereignty, raising awareness on the current and future state of Artsakh’s energy system is crucial and time sensitive. In addition, the availability of public information of Artsakh’s energy systems is very limited, especially from Armenian institutions and perspectives. Due to the lack of information currently available, this article will aim to uncover the baseline and outlook of Artsakh’s energy security and its relationship with human security.

Electricity transmission. Before the 2020 war, Artsakh’s national energy policy was aimed at modernizing the entire energy infrastructure of Artsakh. As a priority for improving the reliability of the energy system, the transition to a ring power supply scheme was considered, a scheme where two sources of electricity serve the demand of consumers, thus increasing the reliability of the power supply of the system. Electrical installations with a ring power supply are used in urban power networks, mainly in high-voltage underground cable channels for public use. One overhead high-voltage line existed that spanned from Syunik to Kashatagh. The plan was to build a second line, the Arajazor-Karvachar-Zod, which would link Artsakh with Armenia.

The electricity transmission lines connecting Artsakh and Armenia pass through Lachin, which, according to the 3-party statement on the cessation of hostilities of November 10, 2020, was passed to Azerbaijan. This circumstance creates serious risks for the energy security of Artsakh and dictates the need to find new ways to connect the power lines from Artsakh to Armenia.  

Before the war, the Martuni province of Artsakh was supplied with electricity through the Shushi-Karmir Shuka-Martuni power transmission line. After the war, a significant part of this line fell under the control of Azerbaijan. To solve this problem, a 41 km high-voltage power line (Stepanakert-Martuni) was built, with a capacity of 10 MW. Currently, the Martuni province consumes up to 3 MW. It is important to note that the constructed line will also connect to the Karmir Shuka substation, and 443 support poles have already been built to support these transmission lines. The work was carried out by the "Artsakhenergo" company, and cost about 1.5 billion AMD.

Hydropower energy. Prior to the 2020 war, Artsakh’s energy goals included increasing energy security within its borders and promoting energy independence. Artsakh has an abundance of water resources and had over 30 hydropower plants built and more planned to meet energy needs (Figure 1). The “Water Legislation,” (2007) a basic law for the implementation of state policy, was adopted in Artsakh to regulate and control the water sector. The “Water Legislation” also defines the fundamental principles and rules for the use of water resources. The total potential of Artsakh’s energy before the 2020 war, according to the plans of the “Water Legislation,” made it a possibility to generate up to 700 million kWh of electricity, which was almost twice as much as domestic needs, creating ample opportunities for export and thus economic benefits for Artsakh.

[1] This research was made possible by a grant from the USC Institute of Armenian Studies.

Fig. 1. Artsakh’s major rivers and HPP locations

After the 2020 war, only 5 HPPs remain in Artsakh HPP – Sarsang and four HPPs on Trgi cascade. The total capacity of these five HPPs is 79.5 MW. Sarsang HPP has the largest capacity among them (50 MW). As a result of the war in 2020, the Mataghis-1 (4.8 MW) and Matagis-2 (3 MW) HPPs, which were part of the ''Artsakh HPP'', were passed into the possession of Azerbaijan. Azerbaijan also occupied the Charhek HPP, Karvachar HPP, Lev-1 HPP, Zangezur HPP, Mrav HPP, among others.   

Wind energy. While there are currently no wind turbines producing electricity in Artsakh, limited data is available on the potential of wind energy. Wind speed, along with height of installed wind turbines, is a primary input for estimating potential electricity production, in the former and current boundaries of Artsakh. After the 2020 war, the Azerbaijani government publicized plans to explore the potential of wind energy development in the occupied territories, citing that potential that reaches 2,000 MW. The Shahumyan province has the greatest potential for wind energy, followed by Kashatagh and Martakert provinces (Table 2; Figure 2). Unfortunately, Shahumyan and Kashatagh provinces have been completely occupied by Azerbaijan which had the highest wind energy potential for Artsakh. However, there are still some regions in present-day Artsakh that could be prioritized and good candidates for building wind energy.  

Solar energy. Although there are no utility-scale solar photovoltaic (PV) plants in Artsakh, similar to wind energy, there is considerable potential for using solar energy for heating water and electricity in Artsakh, via solar water heaters and solar PV plants, respectively. Due to its geographic location and elevation, Artsakh has considerable solar resources. For example, data shows that Stepanakert has a global horizontal radiation (GHI) value of 4.04 Kilowatt-hours (kWh)/m²/day per year, which is a primary input into estimating solar PV electricity generation. This is higher than in most parts of continental Europe. The Azerbaijani government has published data claiming that occupied areas in Artsakh have a potential of 2,000 MW. This potential has been recognized by Artsakh’s government in the past and already utilized by energy companies and non-governmental organizations in solar energy installation projects. Kashatagh has the highest solar PV production potential, followed by Shahumyan and Hadrut (Table 3; Figure 3). All three of these provinces have been occupied by Azerbaijan. However, parts of the other four provinces that Artsakh still has partial control of have adequate potential for solar PV production, particularly Shushi and Martuni.

Energy and the economy. Before the 2020 war, the energy system of Artsakh was a cornerstone of the economy, allowing Artsakh’s development to accelerate. In July 2014, the Russian television channel RBC described Artsakh as a “Transcaucasian tiger,” alluding to its rapid economic growth.  From 2015 up until 2021, Artsakh’s economy was growing (2016: +9.7%, 2017: +18.5%, 2018:+14.0% , 2019: +10.4%), largely due to the construction of energy infrastructure and the growth of energy consumption. In 2020, the economic decline in Artsakh amounted to -20.9%, followed by -7.9% in 2021.  

Artsakh's energy security: Post-war. As a result of the 2020 war, the energy system of Artsakh has become uncertain and has experienced many negative consequences. Today, systematic and large-scale work is required to restore stable energy supplies. As of November 16, 2020, the supply of electricity was suspended in the Martuni region (Chartar, Sos, Machkalashen, Qarahunj, Qert, Kolkhozashen, Kavakhan, Msmna, Kherkhan, Tsovategh, Kherkher, Karmir Shuka, Tagavard, Kaler, Skhtorashen villages) and the Askeran district (Sznek, Mkhitarashen, Khachmach, Karmir Gyugh villages). By November 22, 2020, the supply was restored to Berdashen, Ashan, Norshen, Emishchan, Khatsi, Gishi, Spitakashen, Mushkapat, Khagorti, Kagartsi, and Paraatumb villages. 

Due to restoration work, the supply of electricity is periodically interrupted and not always reliable. In order to overcome the energy crisis in Artsakh, it is necessary to implement programs for the development of renewable energy. It is estimated that the construction of a 1000 kW solar PV plant will make it possible to produce more than 1.5 billion kWh of electricity annually, while causing less impact to the environment compared to other sources of energy. Electricity produced by solar PV significantly displaces electricity otherwise produced by fossil fuels and other resources that have greater life cycle emissions, including combustion and transportation of carbon-intensive fuels transportation. It is estimated that the solar power plant can reduce carbon dioxide emissions by 724 tons. In order to build solar energy, capital investments are estimated at 300 million AMD. Modeled in HOMER software, such a solar PV plant using generic solar PV panels installed in Stepanakert would have an average daily output of 3,691 kWh/day.

Since Artsakh will receive natural gas from Armenia, it is expected that the commissioning of such a solar PV plant would reduce demand for electricity production at the Yerevan TPP. At the same time, studies show that when such an amount of gas fuel is burned at the Yerevan TPP, it leads to the emission of greenhouse gasses and other pollutants into the atmosphere, including 2 kg of sulfur and 1,880 kg of nitrogen oxide. Sulfur and nitrogen oxide contribute to air pollution and acid rain, which is harmful to human health and the natural environment.  

The war has also impacted the supply of natural gas in Artsakh. Artsakh has been involved in the natural gas industry for over five decades. In 1960, Stepanakert was a supplier of liquid gas and over the decade developed a larger liquid gas industry. Further, in 1976, Artsakh began large-scale gasification with natural gas. In 1992, due to hostilities with Azerbaijan, gas supply was completely suspended in Artsakh, leaving more than 80% of gas distribution stations in an emergency state. A year later Artsakh resumed supplying gas, but it required a considerable amount of effort to determine which entity within Artsakh would take over responsibility for the gas transportation system.

Before the 44-day war, the ''Artsakhgaz'' company operated 7 production and operational sites in Stepanakert, Shushi, Martakert, Martuni, Hadrut, Tog, and Khachen, meeting 67.1% of Artsakh’s gas demand (93% of cities and 43.1% of villages). The remainder of the supply was imported from Armenia. In the post-war period, although current gasification data are not available, natural gas tariffs in Artsakh increased as a new rate was negotiated. On average, natural gas tariffs in Armenia were increased by 4.7 drams in April 2022. Due to the increase in tariffs and reliability on Armenia’s supply, additional risks for social stability and accessibility were created after the war.

After the 44-day war, risks and accidents during gas transportation have also increased. On the night of March 8, 2022, due to an accident at the Shushi-Lisagor-Berdzor pipeline in the Shushi region (under the control of Azerbaijan), the gas supply to Artsakh from Armenia was stopped. Azerbaijan hindered the implementation of repair work on the gas pipeline after the accident and in fact the accident was associated with intensive shelling by the Azerbaijani Armed Forces at the Khramort, Parukh and Khnapat settlements of the Askeran region of Artsakh. Initially, Azerbaijan did not allow Armenia, Artsakh, or Russian peacemaker authorities to approach the gas pipeline to restore it. However, as a result of negotiations with the assistance of the Armenian government and Russian peacekeepers, Azerbaijan restored the damaged pipeline. However, since March 21, due to the intervention of Azerbaijan, gas has not been supplied to Artsakh again. The Artsakh government stated that there is sufficient evidence to prove that Azerbaijan installed a control valve in the pipeline causing the gas supply to stop. As hostilities and land acquisition by Azerbaijan continues, the risk of similar accidents related to energy supply continue to be a serious issue. 

Due to suspending the gas supply, Artsakh’s residents’ basic rights have been violated. The European Union was one of the first to react to this violation, expressing concern about the suspension of gas supplies to Artsakh, calling on Azerbaijan to restore supply. The accident in Artsakh in March 2022 can be described as a humanitarian catastrophe, as the lack of gas supplies and problems with the supply of electricity has left the population of Artsakh in an extremely difficult condition, particularly during cold winter months. Since Artsakh is not globally recognized, receiving aid and diplomatic discussions remain particularly difficult. Some international laws such as the Declaration of Social Progress and Development (1969), International Covenant on Economic, Social and Cultural Rights (1966), Universal Declaration on the Elimination of Hunger and Malnutrition (1973), among others should be considered as avenues for addressing these human rights violations.

Vahe Davtyan – Doctor of Political Sciences, Professor at Russian-Armenian University (Armenia)

Natalie Shahbol - Master of Environmental Science and Management (USA)

Mikael Matossian - Master of Energy Science, Technology & Policy (USA)

Haig Minasian - Master of Science, Geographic Information Science and Cartography (USA)     

This research was made possible by a grant from the USC Institute of Armenian Studies.