Loss reduction of 1% in Armenia’s energy system to provide 5.1bln drams profit in two years - minister

YEREVAN, November 10. /ARKA/. Reduction of losses in Armenia’s electricity distribution and transmission system by 1% in two years will ensure a profit of 5.1 billion drams, Armenia’s minister of energy and natural resources Yervand Zakharyan said at a meeting on Friday.

The minister said the factors affecting electricity losses in the system will be reconsidered. A special working group has studied the problems and planned certain steps to make energy balances more realistic and to stabilize electricity companies’ financial status through better efficiency, higher level customer services, modernization of measurements and loss reduction.

The minister said the companies’ financial status in not favorable, to say the least, due to great debt loan in particular.

State-funded companies alone have their loans reaching 13 billion drams. The loan portfolio of Electric Networks of Armenia is about $224 million. The loan servicing is not included in the tariff, which is an additional load for the system. Apart from this, Electric Networks of Armenia owe about 15 billion drams to state-funded energy producing companies, Zakharyan said.

Losses and improvements in the system is a serious problem and is of importance to the public, the minister said.

Since 2009, losses have not reduced by one percent even, despite the studies saying 1% loss reduction in two years’ time will provide a profit of 5.1 billion drams, the minister said.

Zakharyan said losses in electricity networks in some post-Soviet countries are about 9-10%, whereas in Armenia they were 13.39% in 2013 (including commercial losses of 2.27%). The admissible loss level set by the regulator is 11.2%.

In the same period, losses in high-voltage networks were 2.03%.

The situation in energy system as a whole gives rise to concerns, and it is impossible to continue in the same way, the minister said. Approaches should be revised and every effort should be made to rectify the situation, he said.

The minister also said a document will be elaborated in discussions with all parties involved. This document will become an action plan for the sector for the next years.

According to ArmStat, electricity and heat energy production in Armenia amounted to 4,932.4 million kilowatt-hours in January-August 2014, a 3.9% reduction compared to the same period of the year before. Electricity production was 1,632.1mln kWh at heat plants in the period, 1,439.4mln kWh at hydro power plants and 1,858.4mln at the nuclear power plant and 2.5kWh from other sources. ($1 – 413.94drams). –0--