COUNTRY | Armenia
REGION | Europe
SECTOR | energy
QII Principles | Principle 2 Economic Efficiency, Principle 3 Environmental Considerations, Principle 4 Building Resilience
QII Sub-Principles | 2: Technological innovation, 3: Climate, 3: Emissions, 4: Resilience
Overview
Cost: USD 50.6m Size: 55MWac
Parties involved (public and private): Fotowatio Renewable Ventures B.V. (Developer), R2E2 Fund (on behalf of Republic of Armenia), EBRD and IFC (Lenders), CMEC (EPC), ENA (Off-taker)
Relevant contractual details (type, length etc.): 20 years PPA
Faced with the challenges of meeting a growing demand for electricity in a sustainable, reliable and affordable manner and recognising Armenia’s good solar potential in the context of the rapidly declining costs of solar PV technology, the Government of Armenia initiated the Project as a way to introduce a cost-effective renewable energy source in the country in line with its strategy to foster low carbon generation and development of renewables as part of its climate commitments.
The Project will result in crucial positive environmental and economic impacts on the strategic and national level given the current challenges the energy sector in Armenia is facing
Timeline
- Planning and Construction Phase (January 2020– July 2021)
- Operations Phase (2021- approximately 2041)
- Decommissioning Phase (to be determined)
Relevance to QII
The Project will allow producing electricity using solar irradiation, which will lead to decrease GHG emissions estimated at 50,630 tCO2e/year, which is comparable with half of the annual electricity consumption of Gyumri, the second largest city of Armenia.
The Masrik-1 SPP will add 1.5% of the annual national electricity generation (based on P90 energy yield scenario). In addition, it will add:
- 2.1% of the annual national internal electricity consumption (based on P90 energy yield scenario), and
- 1.8% of the total Armenia’s available installed capacity (based on 2018 data).
The Project is the first solar power plant in Armenia and in the Caucasus region in general to be implemented and it will be producing ‘environmentally friendly electricity’ to the domestic market with corresponding decrease in GHG emissions. It will use bi-facial technology in solar modules, which will increase yields.
Successful implementation of the auction scheme, which is expected to follow after Masrik-1 auction, with subsequent construction of new solar capacity will result in a sizable increase of solar energy’s share (up to 10% of total) in the power balance of Armenia allowing the Country partially replacing electricity generation from the imported fossil-fuel (35% of total generation presently).
Benefits
The Project allows for more sustainable development and shows the commitment of the RA to realizing its Energy Strategy for addressing the three principal challenges in its energy sector:
- an emerging supply gap;
- the need to maintain energy supply reliability;
- the need to maintain affordable tariffs
The Project will contribute to increasing energy security through reliance on an indigenous, inexhaustible and mostly import-independent energy resource. The expected electricity generation from the Project will serve the annual electricity needs of more than 16,000 local households;
The Project will produce clean energy which will contribute to lowering electricity generation costs when compared to the current costs associated with liquid fuels; and Generating electricity through PV power is rather pollution-free during operation. Compared with the conventional way of producing electricity in Armenia, the clean energy produced is expected to reduce consumption of liquid fuels for electricity generation and will thus help in reducing greenhouse gas emissions as well as air pollutant emissions
Metrics
GHG emissions % of annual electricity generation coming from RES in Armenia
Name of Institution
European Bank for Reconstruction and Development
Website URL