Development of SHPP in Armenia

TAMARA BABAYANDirector of R2E2 Fund

Hydro Resources

250-300MW

Wind resources

300-500MW

TAMARA BABAYANDirector of R2E2 Fund

Solar resource>1000MW

Geothermal resources

25-50 MW

Technical Potential of Selected Renewable Energy Technologies

2010 2015 2020

Small Hydro Power Projects

Generation capacity in place [MW] 102,5 179 216,5

Investment cost installed [USD/kW] 500-700 1200 1500

Production costs [USD Cent/kWh] 3,3-4,9 6 7.4

Wind Power

Generation capacity in place [MW] 2.6 102.4 302.4

Investment cost installed [USD/kW] 2100 2040 2000

Production costs [USD Cent/kWh] 10.3 10.8 11.8

Photovoltaics

Generation capacity in place [MW] 0.1 0.3 1

Investment cost installed [USD/kW] 6000 5000 2700

Production costs [USD Cent/kWh] 47 38 24

Geothermal

Generation capacity in place [MW] 0 0 25

Investment cost installed [USD/kW] 0 0 3000

Production costs [USD Cent/kWh] 0 0 6.75

Technical Potential for Selected RETes

Base Growth Case for the Development of RETs in Armenia

7

357,0 412,1 449,9 483,3 517,3 540,2 564,9 587,6 608,6 625,622,7

48,7108,8

179,2255,7

344,8424,9

512,8628,4

755,0

15,430,8

46,261,6

77,092,4

107,8123,2

138,6

154,0

192,0

192,0

192,0

192,0

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Small HPPs Base Wind Base Growth Solar PV Base Growth Geothermal Base growth

GWh

Current Situation

8

Generating units Number of plants Capacity, MW Annual Production, GWh

SHPP 111 149 482

Wind 1 2,64 5,0

Biomass 1 0,835 5,9

Solar PV 1 0,01 0,015

Total 114 152,49 492,92

SHPP construction 80 154 578

Wind construction 2 19,05 30,1

ALL 116 325,54 1101,02

Construction and Generation Licenses

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011

14

29

23

29

15

13

21

25

45

11

15

9

12

19

11

Policy Incentives

10

• Guaranteed purchase of produced electricity within 15 years after commissioning /production license/

• Fixed tariff

– SHPP /natural flow/ -19.28 AMD/kWh - $0.052

– SHPP /irrigation/ - 12.853 AMD/kWh -$0.035

– SHPP /drinking water/ - 8.57 /kWh -$0.023

– Wind – 33.756 AMD/kWh – $0.091

– Biomass – 36.928 AMD/kWh -$0.1

• End user tariff /population/- 30 AMD/kWh (day)-$0.08; 20AMD/kWh night - $0.054

Barrier Removal and Facilitation

11

• Information

– R2E2 has updated SHPP scheme of Armenia

– R2E2 has identified barriers and submitted to the Government

– TA programs financed by IFIs

• Technological

– Lack of water merits points

– Capacity of engineering design

– Lack of equipment in local market

– Pipes

• Financing

– Exaggerated risk of investment

– Lack of collateral

– High interest rate

– Lack of long-term loans

Barrier Removal and Facilitation

12

Barrier Facilitation

INFORMATIONAL

Identification of Barriers R2E2 has identified and submitted to Government special Task Force

Information on potential sites R2E2 has updated SHPP scheme of Armenia

Information on technologies and market TA programs financed by IFIs

TECHNOLOGICAL

Lack of water merits points SHPP scheme

Capacity of engineering design TA of IFIs, local bank experts

Lack of equipment in local market Local production facilities including GRP pypes

FINANCING

Exaggerated risk of investment IFIs involvement

Collateral Installed equipment serve as collateral

Lack of long-term loans IFIs support

High interest rate IFIs support

Financing Opportunities

13

• R2E2 Fund – WB $5mln., EBRD $7mln., Local Bank

$3mln., co-financing >30%, actual $28 mln. -27 SHPP

• R2E2 Revolving – $9.2 mln.

• IFC/FMO – 15 SHPPs (about 22 mln. USD)

• KFW – 1st tranche – 14 SHPPs – 6 mln. Euro

• KFW – 2nd tranche 11 mln. Euro AA SHPPs

Forests-10% Gas-0%Oil-0%Coal-0%

Renewable is not only energy security but also National security for my

country

Tamara Babayan

Director

Renewable Resources and Energy Efficiency Funddirector@r2e2.am

www.r2e2.am; www.reweek.am

RENEWABLE RESOURCES AND ENERGY EFFICIENCY

FUND