The electricity sector of Armenia includes several companies engaged in electricity generation and distribution. Generation is carried out by multiple companies both state-owned and private. In 2020 less than a quarter of energy in Armenia was electricity.
As of 2016, the majority of the electricity sector is privatized and foreign-owned (by Russian and American companies), which is the result of a law passed in 1998 allowing for the privatization of electricity generation and distribution in the country. Administration, government legislation, and policy of the sector is conducted by the Ministry of Energy Infrastructures and Natural Resources of Armenia. Regulation of the sector is performed by the Public Services Regulatory Commission of Armenia.
Armenia does not have any fossil-fuel reserves, so it relies on gas imports from Russia and Iran, and nuclear fuel imports from Russia, which, together, result in approximately 66% of electricity production. Armenia is a net-producer of electricity and has exported in excess of 1.3 billion kWh per year since 2014 to Iran, Georgia, and Artsakh.
Large investments have been made in the electricity sector in Armenia in the 2000s. These include the construction of the $247M combined-cycle Yerevan Thermal Power Plant completed in 2010, a $52M loan from the World Bank in 2015 to improve the reliability of electricity distribution across Armenia, and a $42M investment in 2016 by Electric Networks of Armenia to repair distribution networks.
In June 2016, the Armenian Parliament updated the law “On Energy Saving and Renewable Energy” which encourages the use of solar power in the country and allows users of solar installations of 150 kW or less to sell their excess energy back to the electrical grid.
The voltage in Armenia is 220 V AC at a frequency of 50 Hz. Armenia uses the European 2-pin C-socket and F-socket plugs.
Installed capacity for electricity generation.
According to International Energy Agency in 2015 electricity generation in Armenia increased since 2009 to nearly 8000 GWh, but still remains below 1990 levels. Also, in 2015 Armenia consumed more than twice as much natural gas than in 2009.
Armenia lacks fossil energy source, and heavily relies on the production of electricity from a nuclear power plant and hydro power plants, and uses imported fossil fuels to operate thermal power plants. Solar energy and wind energy productions are just a small portion of the overall electricity production.
Out of 3213.2 MW of installed capacity in Armenia, the largest portion of electricity generation comes from Metsamor Nuclear Power Plant at 38%, 33% from hydro power plants, 22% from gas-fired power plants, and the remaining 7% from other renewable sources. Similar figures are derived from reports published by Electric Networks of Armenia - during the period of 01.01.2012 - 30.06.2017 breakdown of aggregated electricity supply was: nuclear - 35.8%, hydro - 35.6%, fossil gas - 28.5%.
The base loaded capacity is provided by the Metsamor Nuclear Power Plant, while the daily load regulation is provided by both the Sevan-Hrazdan Cascade and the Vorotan cascade hydropower plants. The aforementioned power plants are the primary domestic production energy sources while fossil fuel plants depend on imported gas.
Nuclear power.
Nuclear power provides 38% of the electricity in Armenia through one operating nuclear reactor, Unit 2 of Metsamor Nuclear Power Plant, which is a WWER-440 reactor with extra seismic reinforcement. It was created in 1976 and is the only nuclear power plant in the South Caucasus. However, after the Spitak earthquake in 1988, the nuclear power plant's operation was forced to stop, becoming one of the causes of the Armenian energy crisis of 1990's. The second unit of the NPP was restarted in October 1995, putting an end to the 'dark and cold years'.
While Armenia is the sole owner of the plant, the Russian company United Energy Systems (UES) manages the Metsamor NPP. Nuclear fuel must be flown in from Russia.
A modernization of NPP is scheduled for 2018, which will enhance the safety and increase installed capacity by 40-50 MW.
Armenia also explores the possibilities of small modular reactor that would give flexibility and the opportunity to build a new nuclear power plant in a short time.
Earlier it was reported that Armenia is looking for a new reactor with 1060 MW capacity in 2026.
Armenia operates one Soviet-designed VVER-440 nuclear unit at Metsamor, which supplies over 40% of the country's energy needs. The EU and Turkey have expressed concern about the continuing operation of the plant. The Armenian energy minister has announced that a US$2 billion feasibility study of a new 1,000 MWe nuclear power plant is to be carried out in cooperation with Russia, the United States and the IAEA. Russia has agreed to build the plant in return for minority ownership of it. Furthermore, the USA has signalled its commitment to help Armenia with preliminary studies.
Armenia's Metsamor Nuclear Power Plant has an installed capacity of 815 MW, though only one unit of 407.5 MW is currently in operation.
Because Turkey, despite its WTO obligation, blockades Armenian borders, nuclear fuel is flown in from Russia.Used fuel is sent back to Russia.
Armenia signed a cooperation agreement with the European Organization for Nuclear Research in March 1994. Since 2018, Armenia has also signed a cooperation agreement with the European Atomic Energy Community.
Metsamor nuclear power plant provides more than 40 percent of power in Armenia; however, it is aging and will need to be replaced soon. It has received much financing for modernizing its systems and safety features. Russia has extended a loan of $270 million and a $30 million grant for extending the lifetime of Metsamor NPP in 2015, which will be coming to an end in 2016. The funds are to be provided for 15 years with a 5-year grace period and an interest rate of annually 3%.
Plans for building a new nuclear power plant have been discussed. In July 2014, the energy minister of Russian Federation announced that Russia is willing to provide US$4.5 billion out of US$5 billion needed for construction of a new nuclear power plant. In 2014, the construction of a new power plant was approved by the Armenian government, which was to be started in 2018.
Fossil gas power.
During 2010–2017 thermal power plants (running on imported natural gas from Russia and Iran) provided about one-third of Armenia's electricity.
Thermal power plants (running on natural gas) in Armenia have an established capacity of 1,756 MW.
The following table lists thermal power plants which together account for 24% of Armenia's domestic electricity generation.
In April 2010, a new natural gas-fired thermal power plant was inaugurated in Yerevan, making it the first major energy facility built in the country since independence. The plant will reportedly allow Armenia to considerably cut back on use of natural gas for electricity production, because officials say it will also be twice as efficient as the plant's decommissioned unit and four other Soviet-era facilities of its kind functioning in the central Armenian town of Hrazdan. With a capacity of 242 megawatts, its gas-powered turbine will be able to generate approximately one-quarter of Armenia's current (as of 2010) electricity output. The state-of-the-art plant was built in Yerevan in place of an obsolete facility with a $247 million loan provided by the Japanese government through the Japan Bank of International Cooperation (JBIC). The long-term loan was disbursed to the Armenian government on concessional terms in 2007.
Armenia's energy sector will expand further after the ongoing construction of the Hrazdan thermal plant's new and even more powerful Fifth Unit. Russia's Gazprom monopoly acquired the incomplete facility in 2006 as part of a complex agreement with the Armenian government that raised its controlling stake in the Armenian gas distribution network to a commanding 80 percent. The Russian giant pledged to spend more than $200 million on finishing its protracted construction by 2011.
The new Yerevan and Hrazdan TPP facilities will pave the way for large-scale Armenian imports of natural gas from neighboring Iran through a pipeline constructed in late 2008. Armenia began receiving modest amounts of Iranian gas in May 2009. With Russian gas essentially meeting its domestic needs, it is expected that the bulk of that gas will be converted into electricity and exported to the Islamic Republic.
In late December 2010, the Armenian Energy Ministry announced that the fifth block of the Hrazdan thermal power plant will go online by April 2011. Although construction on the fifth block began in the late 1980s, the Armenian government tried to unsuccessfully finish it in the late 1990s. The current project is part of a 2006 deal between Gazprom and the Armenian government, in which Gazprom acquired the incomplete facility and increased its stake in Armenia's gas distribution network, in turn pledging to spend $200 million in completing the project by 2011.
History.
From the 1960s, the USSR carried out an electricity generation plan with the intention of constructing thermal power plants in the southern regions of Armenia where fossil fuel energy resources were restricted. Construction of thermal power plants started in the energy-intensive regions of Armenia. The first power plant was constructed in Yerevan in 1960, which was followed by Vanadzor Thermal Power Plant in 1961, and Hrazdan Thermal Power Plant in 1963.
The main source of energy for these power plants was natural gas which was delivered through pipelines running from Turkmenistan through Azerbaijan. Until the late 1980s, Armenia was heavily dependent on thermal and nuclear energy production. During the years of the first Nagorno-Karabakh War, the energy production of the thermal power plants was also stopped because of a border blockade, and Armenia had a severe energy crisis until the mid-1990s. However, Armenia managed to overcome this crisis. Although most of the technology of some of the thermal power plants is outdated as of December 2016, a lot of upgrades and maintenance have been undertaken on the power plants. The Vanadzor Thermal Power Plant is not operational as of December 2016.
There were two operational thermal power plants as of December 2016: The Hrazdan Thermal Power Plant with an installed capacity of 1100 MW, and the Yerevan Thermal Power Plant with an installed capacity of 250 MW. The 5th unit of the Hrazdan TPP with installed capacity of 450 MWt was commissioned on December 2, 2013. Hrazdan Thermal Power Plant, which is owned by the Russian Federation, produced 12.3% of the electricity produced in Armenia in 2014.
By 2016 upgrades made to the Yerevan Thermal Power Plant had increased its efficiency to almost 70% by reducing the consumption of fuel, sulfuric acid, and caustic soda, and by reducing emission levels. For its power production, it uses natural gas supplied from Iran and exchanges it with the electricity produced by the plant, while using the surplus energy for domestic consumption. On November 29, 2021 a new combined heat and gas power plant with installed capacity of 250 MW was launched in Yerevan. 
Renewable energy resources and installations.
Armenia does not possess large fossil energy resources like coal, gas, or oil. However, according to a report by the Danish Management Group, Armenia has a large potential for renewable energy.
Armenia has set a target to generate 26% of its domestic power from renewable resources by 2025.
Electricity consumption.
According to Armstat total final consumption of electric energy in 2016 amounted to 458.2 ktoe and was broken down as presented on the graph to the right.
In 2014, Armenia consumed 5352 GWh of the total 7956 GWh of electricity production (7750 GWh domestic production and 206 GWh imports). This is approximately 67.3% of the total. The biggest consumer was the residential sector (1924 GWh, ~24.2%).
World Bank data referring to International Energy Agency demonstrates that in per capita terms electricity consumption in Armenia remains below world average and in 2014 only matched 1992 figure.
Electricity transmission and distribution.
Distribution is controlled by Electric Networks of Armenia (ENA), High Voltage Electrical Networks, and Electro Power System Operator. There are over 36,000 km of distribution lines across Armenia.
In 2002, Electric Networks of Armenia (ENA) was privatized by Midland Resources Holding. 100% of ENA shares were sold to Midland Resources Holding company. Revenues of Electric Networks of Armenia amounted to 181 billion AMD in 2018, less from 191 billion in 2017.
Transmission and distribution losses remain high in Armenia, even compared to Russia.
A World Bank survey from 2013 reveals companies would experience a power outage only about 4 times a year (at par with countries like Hungary and Latvia).
International interconnectors.
There are interconnectors to Georgia and Iran. It has been suggested that if the Black Sea Energy submarine cable is built