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Currently, the "Energy Law of the Republic of Armenia" guarantees the market for electricity produced by all small hydropower plants (SHPPs, total capacity up to 10 MW per plant) in Armenia. According to this Law (Article 59, Clause 1.c), adopted by the Armenian Parliament in April 2001, "All electricity (capacity) generated at small hydro power plants, as well as from renewable sources of energy within the next 15 years shall be purchased pursuant to the Market Rules".As of January 2009, the announced feed in tariff is approximately 0.09 USD/kWh (31.343 AMD/KWh) without value added tax. Some of the basic principles of the policy are as followsEnhancement of competition and efficient operation in the energy sector.Regulation on energy sector operations.Protection and balance of interests between consumers and economic entities.Efficient use of domestic and alternative sources of energy, and the creation of economic and legal mechanisms to serve that purpose.Encouragement of investments, safety and environmental protection in the energy sector.Separation of the generation, transmission, and distribution system operator.Energy Saving and Renewable Energy LawAccording to the Energy Saving and Renewable Energy Law, ratified in December 2004, the principles of Armenian policy in energy saving and renewable energy are:1) Increasing the level of supply of indigenous renewable energy carriers to satisfy the energy demand of the economy,2) Implementation of energy saving strategies, as well as development and enforcement of legal and economic mechanisms for the promotion of renewable energy,3) Ensuring increasing usage of renewable energy resources as well as the application and development of new renewable energy technologies aimed at its promotion,4) Ensuring competitiveness of renewable energy resources and protection/enforcement of the rights of businesses engaged in the area of renewable energy,5) Ensuring high priority of issues of environmental protection and efficient (economic) usage of natural resources while implementing measures/activities aimed at the development of energy saving and renewable energy; etc.According to the Law, legal and physical persons using, producing and importing energy devices can submit those in the manner established by the Law on Certification of Compliance of Goods and Services with Normative Requirements for voluntary certification based on energy efficiency indicators. The costs are, however, carried by the mentioned legal (physical) persons. Further, all certified energy devices will be labelled.Water CodeThis Code, which has been adopted on 4 June 2002, establishes procedures to obtain water permit for hydro power plants. According to this Code water permit for a hydro power plant is given for 3 years at the first, but once the plant is operational or even it is under construction, then the permit is extended for a much longer period. The purpose of this provision is to prevent people getting a water permit and then not proceeding to construct the project. However, land lease for the project outlined in the Land Code dated 2 May 2001 is not in synch with this provision because there are not such time limits for the land lease.Land CodeProcedures to obtain the right to use the land for an energy related project, such a SHPP, are outlined in this code. Land can either be leased or purchased. The general plan of various areas does not have specific land parcels identified as of energy type use. Therefore, procedures in this code need to be followed to change the land us category. A governmental decision is required for any land use category change.
Hydropower The hydro potential of Armenia has been evaluated to be about 21.8 billion kWh/year, including 18.6 billion kWh from large and medium rivers and 3.2 billion kWh from small rivers. According to the Renewable Energy Armenia webpage, the economically feasible hydropower potential is about 3.6 billion kWh, with 1.5 billion kWh already utilized. The remaining hydropower potential is to be developed during the next 15 years. The total output of large and small hydropower existing in the country, as of January 2011, is 1,256 MW or 3,746 million kWh. There are 70 small hydroelectric plants operating with an installed capacity of 89 MW; in January 2009, building licences were issued for 64, and more are foreseen, along with several major plants.WindThe average annual wind velocity in Armenia is distributed unevenly in the range of 1.0 to 8.0 meters per second. In some regions, particularly in the Ararat Valley, strong mountain valley winds are quite common. For instance, during the summer months the velocity of these winds oftentimes reaches 20 m/s or more. Despite a relatively attractive wind regime in many parts of the country, the only operational wind power facility in Armenia today is the 2.6 MW Lori-1 pilot wind power project comprised of four 660 kW Iranian-assembled Vestas wind turbines. A second, the Iran-Armenia Wind Farm, is under construction.BiomassBiomass energy in Armenia has the potential to provide significant power, if utilized. Armenia has reasonable areas of land covered by forests and lands for agricultural industry, including farming of plants and animals. These areas can potentially produce residues which could be used as fuel for biomass combustion or gasification, as well as biogas production through anaerobic digestion. Forest residues (slash from forest thinnings or waste wood from sawmills) can provide a concentrated resource to be used as fuel for energy production. Agricultural residues can provide a range of residues, including crop residues (corn stover, nutshells, fruit tree branches, etc.) and animal wastes.SolarArmenia is rich in solar energy resources, the utilization of which will reduce the need for imports of other energy sources. The average annual solar radiation is approximately 1,720 kWh/m2 compared to the average annual European solar radiation of 1,000 kWh/m2. Over a quarter of the territory of the country has solar resources with an intensity of 1,850 kWh/m2.The need to promote EE in Armenia is going to increase due to the fact that the upcoming decommissioning of the nuclear power plant by 2016 requires the country to develop RE. Additionally, Armenia is a signatory of such international agreements as Copenhagen Accord, under which the country has committed to increasing energy production based on RE sources and improving EE in all sectors of the economy, as well as in buildings and construction. Better use of the potential of EE will limit the dependency of the country on imported fuel.GeothermalRecent geologic surveys funded by the World Bank show that on the Syunik volcanic plateau, the Jermaghbyur region presents the best region for extracting geothermal power. The water temperature at 2500-3000 m is about 250o C. Using single flash technology this site can produce approximately 25 MW of electric power. In addition to Jermaghpyur, two more geothermal sites; Karkar and Gridzor are being investigated under the WB/Geo-Fund.