Armenia's sun strategy

A story from the February 2024 edition of The Steppe

Armenia is strategically pivoting toward solar energy as fears of energy price instability loom due to worsening political relations with its primary energy supplier, Russia. The move is aimed at diversifying Armenia's energy sources, reducing external vulnerabilities, and promoting long-term sustainability.

Despite progress in renewable energy, particularly through hydropower, a significant portion of Armenia's electricity still relies on fossil fuels –– mainly gas, oil and coal sold by Moscow. Recent geopolitical relations with Russia have prompted Armenians to expedite the shift towards alternative and sustainable energy to mitigate potential energy price fluctuations. Notably, they have been buying up and installing increasingly affordable solar panels for heating, both in the capital and the various regions of the country.

Renewable energy in Armenia has gained political significance. The European Parliament, in a recent resolution on EU–Armenia relations, urged Armenian authorities to accelerate the development of renewable energy, emphasizing the need to diversify energy sources as Russia still supplies over 80% of Armenia's natural gas imports. Indeed, the EBRD recently announced its backing of a Yerevan solar panel manufacturer, noting reducing China’s dominance of solar panel manufacture in its publicity, and an EBRD and EU-backed fund made its first investment in Armenian solar power back in 2021.

It’s not just the EU that’s taken an interest, however – Emirati renewables company Masdar is building Armenia’s largest solar plant Ayg-1, which is scheduled to come online next year.   

In 2023, solar power represented only 2.7% of the electricity generated in the country, highlighting the untapped potential for further growth. There is 72% more solar energy flow per square metre in Armenia than in Europe, according to the IEA.  

As Armenia confronts energy security concerns, the gradual transition to renewables, and in particular, solar energy, not only addresses immediate geopolitical pressures but aligns with the country’s sustainability commitments. 

The move also promises a more resilient and diversified energy sector, ensuring stability in the face of evolving geopolitical dynamics and fostering a sustainable future for Armenia.