Armenia Least Cost Energy Development Plan: 2020 - 2036

The plan covers the period from 2020 to 2036 and aims to strengthen the energy security and independence of the country, provide a reliable supply of energy at the lowest cost possible, and realize energy efficiency and renewable energy potentials. The TIMES model structure includes demand sectors such as industry, commercial, residential, and agriculture, as well as energy service demand projections, energy balance, and planning horizon and system settings. The model also considers fuel and market share limits, supply sectors such as power and heat resources and imports, and future resource supply and technologies. The main assumptions for the TIMES-Armenia model include a GDP growth rate of 6.75% in 2018, 4.65% in 2020, and 4.5% per year thereafter. The population is expected to decrease slightly over the planning period, while residential demand for energy will grow at an average rate of 1.7% per year. The commercial sector is the main contributor to demand for useful energy, with an average annual growth rate of over 4.4%. The agriculture and industrial sectors contribute less to the growth of demand for useful energy, with average annual growth rates of around 0.2% and 2.2%, respectively. The baseline scenario, known as the IU BASE, assumes the introduction of the Yerevan CCGT2 thermal plant and the Masrik-1 grid-connected solar PV plant to the system. The gas price is assumed to increase, reaching the European prices level in 2027 and growing at the same rate thereafter. Electricity import/export is held constant at the 2018 level through the end of the planning period. The Armenia Nuclear Power Plant is assumed to be decommissioned from 2027, and the old Hrazdan thermal power plant is assumed to be decommissioned from 2021. The economic parameters of the IU BASE scenario include a total discounted system cost of $40.5 billion, with variable costs without fuel costs accounting for 13% of the total, fixed costs accounting for 14%, expenditure on fuel accounting for 28%, and investments accounting for 45%. The total discounted GDP to 2036 is estimated to be $375.4 billion. The baseline-reference scenario, known as the BASE-R, is similar to the IU BASE scenario but with the introduction of new variable renewable energy sources (VRES) generation capacity limited to 1,500 MW for solar PV and 500 MW for wind. The annual maximum new capacity additions are capped at 100 MW for central solar PV, 4/5 MW for residential/commercial rooftop PV, and 50 MW for wind. The gas price and electricity import/export assumptions remain the same as in the IU BASE scenario. The economic parameters of the BASE-R scenario include a total discounted system cost of $41.029 billion, which is $513 million higher than in the IU BASE scenario.