Unique power unit for Armenia to be built on the basis of Hrazdan thermal power plant

YEREVAN, August 29. /ARKA/. A new 50 MW power unit, unique for Armenia, will be built on the basis of Hrazdan TPP.  To finance this project, the Eurasian Development Bank (EDB) will provide a $26 million loan to H Energy Solutions (a subsidiary of Tashir Group).

"The gas piston power unit will be the first of its kind in Armenia and also the first to be built without government guarantees for the purchase of the generated electricity. This means that the company will build the unit at its own risk to sell electricity on the wholesale electricity market," Deputy Minister of Territorial Administration and Infrastructure Hakob Vardanyan told ARKA news agency in an exclusive interview.

According to him, this is one of the first achievements of the local market after Armenia's transition to market relations (liberalization and trade) in February, 2022.

"Previously, the government provided purchase guarantees for the construction of such production facilities, committing to purchase all products within a certain period, say 20 years. In this case there are no obligations on the part of the government. The company will sell electricity under a simplified procedure," the deputy minister explained.

Vardanyan noted that he has no information about the cost of this project, since it is a private one and the government has no obligations. As for the construction, he said the earth work, which does not require a permit, has already started at the site of the operating Hrazdan TPP.

"The company has not yet applied for a license, but we should not expect any difficulties. There are no grounds for refusing it ," Vardanyan said.

According to him, the construction of the new unit is expected to be over in July or August 2024, after which it will be connected to the power grid. This process will take 2-3 months, and the new unit will be put into operation in September or October in 2024.

The peculiarity of this type of power unit, as Vardanyan explained, is its flexibility and maneuverability. If necessary, it can be quickly connected to the power system to cover the peak power load or be shut down. 

The fate of the current Hrazdan TPP 

According to Vardanyan, the current Hrazdan TPP should be shut down and dismantled in the future. However, according to him, the problem is that it still serves as a reserve power plant - the energy system needs such small capacities.

"This thermal power plant is now used only for regime regulation - out of two 200 MW units, only one is mainly in operation at 150-160 MW capacity, which drops to 90 MW at night hours. Its role is decreasing from year to year and in the future it will be replaced by another, more flexible plant, while the new 50 MW unit is quite suitable for these purposes," the Deputy Minister noted. 

About the thermal power plant 

The Hrazdan Energy Company (Hrazdan Power Plant) was established in 2004 when its authorized capital was replenished with the property of the Hrazdan thermal power plant, which was transferred by Armenia into the ownership of the Russian Federation as repayment of the state debt. Since March 2017, it has been owned by CJSC Tashir Capital (part of Tashir Group). The plant has been in operation since 1966 (4 power units with a total capacity of 810 MW).

In the domestic market of Armenia it serves as a balancing plant, generating electricity for domestic consumption only when there are power shortages in the autumn and winter and when the nuclear power plant is halted for maintenance. 

About EDB loan for the new unit 

The loan agreement between the Eurasian Development Bank (EDB) and H Energy Solutions (Tashir Group) for $26 million to finance the construction of a new power unit at Hrazdan TPP was signed in July 2023.

The construction will utilize highly efficient modern equipment compliant with international environmental standards.

Electricity produced by the unit will be supplied both to Armenia's free competitive electricity market and for export. The project will strengthen the diversification of power generation in Armenia and increase its efficiency. 0-