1. Energy Strategy Center of Scientific Research Institute of Energy
PROJECT: Assistance to Energy Sector to Strengthen Energy Security and Regional Integration
Impact of RES Implementation on Technical and Economic Characteristics of Regionally Integrated Armenian Energy System
Dr. Vahan Sargsyan
Energy Strategy Center of
Scientific Research Institute of Energy

2. Objectives
Study of cost-effectiveness of Armenian power system integration for the period 2015 – 2020
Evaluation of the impact of new renewable energy sources on the power sector economic indicators

3. Scenarios of Isolated and Integrated Mode of Operations
Annual growth rate of domestic consumption for all scenarios is 2.7%
BAU – based on generation structure as of 2012
Decommissioning Armenian NPP (for 2020 only)
Additional construction of small HPPs: 87 МW in 2015 and another 61 MW by 2020
Construction of Loriberd and Shnokh HPPs (2020)
Construction of Wind Farms: 40 МW by 2015 and in addition 120 МW by 2020
Construction of new 1000 МW NPP (2020)

4. Indicator of Effectiveness
Cost of electricity generation for domestic consumers in Armenia is defined as the main indicator for effectiveness

5. –Commercial Dispatching Tool
Developed by Argonne National Laboratory, USA
Used to study complex marketing and system operational issues
Maximizes the revenues of the power system
Optimizes hydro and heat generation
Calculates the cost of energy at regional markets
Calculates the operational costs
Models agreements on mutual energy exchange

6. GTMax Model of Armenian System

7. Study Results: Isolated Mode of Operation of Armenian Power System
Междунардоная Конференция по фопросам евразийской интеграции

8. Description of optimization
Base case generation price: $/МWh (2015)
36.98 $/MWh (2020)
“Reallocation of water” – optimized water use of Vorotan Cascade of HPPs by additional accumulation of 70 GWh during the period of April-June and later by draw down in July- September
Change of the period of Armenian NPP refuelling from September-October to May-June

9. Summary: Electricity Generation Prices, $/MWh

10. Impact of Wind Farms (WF)
Wind power generation in Armenia is characterized by large variability (planned capacity by 2020 – 160 МW)
Winter day, kW for 20 MW turbine Summer day, kW for 20 MW turbine
Taking minimum price for WF production at $100/MWh we have the following additional negative impacts:
for 2015 – 0.81 $/МWh or $5 mln in projected generation of 100 GWh
for 2020 – 2.5 $/МW or $17.5 mln in projected generation of 350 GWh

11. Study Results: Integrated Mode of Operation of Armenian Power System
Междунардоная Конференция по фопросам евразийской интеграции

12. Methods of economic calculations
The accepted method of determining efficiency of integration includes analysis of development of strategies of all energy systems of neighbour countries, including technical, economic and political aspects
Calculations in GTMax were made for all seasons, each of which requires specific technical restrictions, followed by hourly optimization

13. Methods of economic calculations
Calculations of export income and costs of import were made by breaking down by seasons and time zones of the day and according to the prices (within the price range)
Calculations were done for prices at the Armenian border varying from $180 to $240 per thousand cubic meters

14. Description of optimization
The breakdown by time periods and settlement prices for export / import in $/Wh (based on the analysis of energy system market of the region)
Period 1
January-February
Period 2
March
Period 3
April-June
July – middle of August
Middle of August – end of September
NPP Maintenance
November - December
Hrazdan TPP Operation of & Yerevan TPP
Stop of Hrazdan TPP
Stop of all TPPs in Armenia.
Limitation of import demand of the region’s countries, especially, Turkey
Possibility of export from Armenia wo TPPs. Max consumption and prices in the Turkey market.
Stop of Hrazdan TPP.
Operation with and wo Yerevan TPP
Operation of Hrazdan TPP and Yerevan TPP. Min possibilities of Georgian export
Nighttime export 40 30 12 40
Daytime export 62 52
40/30/20
60/50/40 62
Nighttime import 50 50
Daytime import 70 70 60 75

15. Description of optimization
Export prices for Armenia are determined by profitability for Georgia to use that energy for either in internal market or re-export/ transit to third countries
Prices for import to Armenia from Georgia are considered higher, than in other countries, in particular in Turkey

16. Analysis of Results for 2015
Gas Price $180/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.
Gas Price $240/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.

17. Analysis of Results for 2020 with NPP
Gas Price $180/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.
Gas Price $240/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.

18. Analysis of Results for 2020 w/o NPP
Gas Price $180/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.
Gas Price $240/thousand m3
Generation Price, $/МWh Price Reduction, % Cost Reduction, $ mln.

19. Impact of construction of new NPP on economic indicators
In isolated mode it would not be possible to operate a new NPP with the capacity of 1000 MW
Under the integrated mode it would be needed to export not less than 3000 GWh annually
Generation price for domestic consumers would exceed 80 $/MWh

20. The Main Findings
Isolated mode of operation of Armenian energy system will require the NPP unloading which will affect the economic indicators
To increase annual generation by NPP it is advised to either optimize the use of water resources or change the NPP refueling period to May-June
It would be possible to procure full quantity of SHPPs generation only in case when measures mentioned in point 2 will be implemented
Construction of wind farms brings to deterioration of economic indicators

21. The Main Findings, cont’d
The integration of Armenian power system to the power grid of Georgia is a cost-effective for both parties, even at relatively low exchange volumes due to additional loading of АNPP to its maximum level with competitive export price provision, as well as due to replacement of TPP generation with cheap electricity import in certain periods of time
Construction of Loriberd and Shnokh HPPs will be efficient if the NPP is decommissioned or if the systems are integrated

22. Thank you Energy Strategy Center of
Scientific Research Institute of Energy
5/1 Myasnikyan avenue, 0025 Yerevan, Armenia
Phone/Fax: