A Real Fix: Armenia’s Energy Situation

Armenia's Metsamor Nuclear Power Plant, situated near geological fault lines, is responsible for generating about 40 percent of the electricity used by Armenians every year. A lack of access to alternate power sources is a major factor in the country's ongoing dependence on the nuclear facility. The economic blockade maintained by two of Armenia's neighbors -- Turkey and Azerbaijan – hampers the large-scale import of fuel, while the country's lack of water resources limits hydro-electric power-generating capacity.

The only nuclear energy source in the South Caucasus, Metsamor lies just 28 kilometers outside of Yerevan, 16 kilometers from the Turkish border, 60 kilometers from Iran and less than 150 kilometers from the Georgian and Azerbaijani borders. Built in mid 1970s, the twin-reactor station was closed in early 1989 following the earthquake late the previous year that left an estimated 25,000 people dead. The plant itself withstood tremors measuring 5-6 on the Richter scale. The Metsamor reactors are of the Soviet design known as VVER, considered marginally more structurally sound than the Chernobyl-type reactors, or RBMKs. Still, Armenian officials felt compelled to take no operational chances following the 1988 earthquake.

Immediately following the closure, Armenia fell into a period known as "the dark years," when an energy shortage became acute. To heat their homes during the winter, residents stripped the capital Yerevan of virtually everything made of wood, leaving few trees standing. Meanwhile, Lake Sevan, which was already suffering from Soviet-era ecological damage, was further drained to compensate for energy shortages.

In October 1996, Unit 2 at Metsamor, a 440-megawatt reactor, resumed operation with Western financial assistance for safety upgrades. In 2003, Russia's state-run power monopoly RAO Unified Energy Systems (UES) assumed responsibility, through a subsidiary, for running the Metsamor plant in return for Moscow's cancellation of $40 million in debt. [For additional information see the Eurasia Insight archive].

The city of Metsamor, four kilometers from the plant, was built essentially to house the power station's employees. When the plant closed in 1989, the majority of the population suddenly became unemployed, and many people were forced to leave the area to search for work elsewhere. Today, roughly 20 percent of Metsamor's 10,000 residents work at the nuclear plant. Locals have mixed feelings about the risks; some feel there is no danger at all and are grateful for the economic opportunity that the nuclear plant provides; others mistrust authorities' safety assurances and worry about the radiation risks. Still others accept the risks, while desiring compensation for assuming them, including free electricity.

One added hazard, not only for locals, is that nuclear waste must be stored on site because of the Turkish-Azerbaijani blockade. Additionally, fuel must be flown in from Russia - over Georgian airspace. At the same time, Georgia indirectly benefits from Metsamor's operation, as the nuclear facility's generating capacity enables Armenia to export up to 150 megawatts of electricity daily from the Razdan thermoelectric plant to Georgia.

European diplomats remain concerned about Metsamor's operation. The European Union -- along individual Western governments, the World Bank and the International Atomic Energy Agency (IAEA) -- have pressed the Armenian government to shut Metsamor down. While the EU had originally given millions of euros in aid for safety upgrades, the grouping of European states froze a 100 million-euro energy grant in June 2004, citing Yerevan's continuing reluctance to close the plant.

Shutting down is not so simple. Besides the exceedingly high cost of closure, estimated by some as high as $1 billion, Armenia has lacks the natural resources and the funds to fully develop alternatives. Meanwhile, local and Russian experts believe Metsamor can safely function until 2016, due to strengthened security systems that take into account the possibility of another earthquake. Some experts, citing upgrades made at similar Russian nuclear facilities, suggest that Metsamor could remain operational until 2031.

Despite a funding shortage, Armenia has made some progress in securing energy alternatives, including an agreement on the construction of an Armenian-Iranian pipeline project. [For background see the Eurasia Insight archive]. The government has also set aside funds in the state budget to promote the use of solar energy. Panels can be randomly seen on Yerevan rooftops, including the American University in Armenia. Meanwhile, recent surveys suggest that wind power could potentially generate 400-500 megawatts of electricity - about one-third of Metsamor total output. The first wind power station, built with Iranian financial assistance, is scheduled to go into operation in the Pushkin Mountain Pass in 2005. It will have an estimated annual capacity of 5 million kilowatt/hours.