At the beginning of July, Armenian National Security Secretary Armen Grigoryan announced that talks with the United States to replace Armenia’s aging Metsamor nuclear power plant were now at a “substantive phase.” The first of two reactors at the power plant started operating in 1976, and the plant has largely met Armenia’s energy needs since. Metsamor produces 30–40 percent of Armenia’s electricity, depending on fluctuations in demand. In 2004, however, the European Union froze 100 million euros ($109 million) of aid intended to develop alternative energy sources to the reactor after the Armenian government failed to meet a deadline imposed by a 1998 agreement to close the reactor within six years. The EU delegation head in Yerevan called Metsamor a “danger to the entire region” due to its location in a highly active seismic zone. At the time of construction, the reactor was expected to last until 2016, more than a decade longer than the 1998 EU agreement required . Metsamor’s closing date has been extended several times. Most recently, the local subsidiary of Russia’s Rosatom nuclear energy giant signed a contract with Armenia in December 2023 to modernize and extend Metsamor’s lifespan until 2036. The plant will continue to operate until then, when a new nuclear power plant is expected to replace Metsamor. If Yerevan continues to work with Moscow in this fashion, Armenia’s turn to the West will continue to be stunted by its ties to Russia, especially in a sector as important as energy. At any rate, a new nuclear reactor is also vital for the country’s carbon-free future.

Another aspect of this issue is how Armenia is attempting to transition to renewable energy amid climate change concerns. During her visit to Armenia this month, US Agency for International Development Administrator Samantha Power acknowledged that the Armenian government had committed to double renewable energy sources in 2023, but that nuclear energy would remain a core of this initiative. In 2022, Armenia produced nine gigawatt-hours (GWh) of electricity, mostly from thermal and nuclear sources, at 43.5 and 32 percent, respectively. Hydro, solar, and wind generation stood at just 21.8, 2.7, and 0.02 percent.

 

Efforts to increase Armenia’s solar power potential experienced a brief setback last month when UAE company Masdar suspended construction of a $174 million 200-megawatt plant scheduled to generate electricity by 2025. Without this project, as much as 70 percent of the country’s electricity is still dependent on Moscow. In addition to using Russian nuclear fuel flown in by air, the country imports 87.5 percent of its gas from Russia’s majority state-owned oil company, Gazprom.  The remainder comes from Iran as a part of a deal where Iran provides gas in exchange for electricity from Armenia, which has been extended to last until 2030. Additionally, Moscow has a monopoly on gas supply and distribution in Armenia until 2043, thanks to an agreement signed between Yerevan and Moscow in 2013.

 

In December 2023, Yerevan and Moscow were negotiating the construction of a replacement reactor even though US Secretary of State Antony Blinken and Armenian Foreign Minister Ararat Mirzoyan signed a memorandum of understanding in May 2022 on assessing the use of Small Modular Reactors (SMRs). SMRs are much smaller than conventional nuclear reactors and can be part of a hybrid energy system, complementing more variable renewable sources such as solar and wind. This is considered safer and better integrates nuclear power into clean energy transition plans. Choosing an American, French, or South Korean replacement for Metsamor would greatly assist Armenia in diversifying away from Russia.

 

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To meet Metsamor’s 2036 deadline, some insist that the construction of a replacement reactor would need to start by the beginning of 2025, despite the government saying in 2021 that it was looking to begin construction in 2026–27 instead. That still leaves little time for Yerevan to make a final decision. With the fate of Armenia’s nuclear energy up in the air, Armenia has the opportunity to take a decisive path either closer to Russia or toward the West through the increasingly important geopolitics of energy.

The full analysis is available here.