Armenia is expanding its renewable energy capacity with a new plan to build two new solar power plants.
Masdar and Armenian government finalized an agreement to build solar power plant by 2025 in Armenia. Ayg-1 is a 200 MW plant which will become Armenia’s largest solar plant. The plant will have around half of the current capacity of Armenia’s main energy generator.
As per the government, Masdar initiated the project and later government announced an international tender for a large-scale solar power plant in 2019.
Masdar was given the opportunity to beat the lowest tariff proposed by any other company. Masdar originally bidded $0.0299 per kWh (which government turned it down as it was too high), and Masdar then offered the bid for $0.0290 per kWh.
The plant will be built at Aragatsotn province of central Armenia over 500 hectares. 85% of the plant will be owned by Masdar and remaining 15% will be held by Armenian National Interest Fund (ANIF).
ANIF CEO, David Papazian, said, “Masdar is expected to invest $174 million in the project. It is by far the largest single foreign investment in green energy in the region and the second largest foreign direct investment in the history of modern Armenia. The electricity produced at the plant will be cheaper than that of the Metsamor nuclear power plant․”
Masdar is a subsidiary of Mubadala Investment Company, which is UAE’s sovereign wealth fund. In 2020, Masdar signed a contract to build a 200 MW solar plant in southern Azerbaijan.
Armenia highly relies on natural gas and nuclear fuel imports from Russia as it does not have any fossil fuel reserves. From the past one decade, the country has started seeing the relevance and potential of solar energy as the prices was dropping.
In 2016, changes in laws related to renewable energy allowed households with solar panels of 150 kWh or less to sell the excess energy to the national grid. Many companies also were offered tax cuts if they used solar power. In 2017, solar energy production was 0.4 million kWh and in 2020, it grew to 56.5 million kilowatt-hours.