Renewable energy can reach 60% in overall production: Armenia takes self-sufficiency path
YEREVAN, MARCH 15, ARMENPRESS. The share of renewable energy resources in the overall production can be doubled reaching 50-60%. The construction of Masrik-1 55 MW solar power plant can greatly contribute to this which is being implemented by an open competition – in case of proposing the lowest tariff by private companies.
Armen Melkikyan – Director of the Armenia Renewable Resources and Energy Efficiency (R2E2) Fund, gave an interview to ARMENPRESS talking about the Fund’s activities.
-Mr. Melkikyan, what is the main activity of the Fund this year?
-One of our most important activities is the program of constructing the 55MW solar power plant in Mets Masrik community. You know that a great conference was held, we invited all pre-qualified companies which are ten in order to present their questions on the packages submitted for investors. The result was quite good, we received nearly 250 written requests which received clarifications from us, we again provided a chance to address questions within three days and as a result we received 10 more requests. We hope this further increased the trust among the investors which will lead to presenting lower tariff by them.
This is a unique project, we haven’t had a tender with such procedure in Armenia yet. Thanks to the World Bank consultants, we managed to develop a package and procedure which will allow the country to implement a program by private-public sector partnership for the first time. We will assess the proposals on tariff when they are submitted on March 21. The most important condition of the tender is to propose the lowest tariff, but in order for the companies to be able to submit an application, they need to ensure that. If all participants decide to participate, each of them must provide one million USD as a guarantee. If one is declared the winner, we return the money to those who provided, the winner must also provide additional 700 thousand USD, this will be the insurance that the plant will be constructed within two years, otherwise that money will be kept.
In addition, there will also be a sum of money the company will compensate to the community for implementing community development programs worth about 80 million USD. At the moment all participants are searching for funds. It’s worth mentioning that they all are large companies across the world with a great experience in the field of renewable energy. Three out of ten already conduct an activity in Armenia. This project will bring direct investments to Armenia and if succeeded will improve Armenia’s position from the perspective of public-private cooperation.
-What will change the lowest tariff in this field?
-A lot will change in the field. We can judge by the results of small power plants: high tariff was set in order to gain experience. The interest towards that business started increasing in Armenia, the small and medium enterprises started to think about it. A great experience was reached within two years and new innovative investments are being made in solar solutions. In other words, by developing the small ones, if we get a low tariff for the large ones, we will be able to compete in the competition race of energy tariffs from other renewable sources. In case of the HPPs the tariff is 28 AMD, if we manage to get that tariff, the solar power plants will be able to compete with the HPPs. The sun is pure energy which doesn’t cause environmental problems.
Of course, it’s important to note that the second step of these developments is the creation of cumulative capacities. This is one of our main targets, and at the moment we are carefully following the developments in this regard. Today the prices gradually become stable, and interesting proposals emerge. As a result we will solve both the country’s energy security issue and will create opportunities for additional consumption by increasing the export capacities. Finally, by having a competitive tariff we can attract new investments.
-Is it possible to be self-sufficient as a result of using renewable energy resources?
-I would say this is already a mandatory condition in many countries. Of course, Armenia must also strive for that, but I cannot say the exact dates we will achieve this. 30% of overall energy production in Armenia comes from renewable energy in which the great share belongs to small HPPs, the share of sun is small, but it can increase of course. It is possible to reach up to 50-60% share in the overall production from the renewable energy. The results of 2017 were quite satisfactory, and the development of solar energy will double, if not triple in 2018. According to the data of 2017 more than 2000 people in Armenia have already installed water heaters and about 200 people solar panels on their roofs.
Interview by Ani Nazaryan
English –translator/editor: Aneta Harutyunyan