A unique power unit for Armenia will be built on the basis of the Hrazdan TPP
A new power unit with a capacity of 50 MW, unique for Armenia, will be built on the basis of the Hrazdan TPP. To finance this project, the EDB will provide company H Energy Solutions (a subsidiary of Tashir Group) with a $26 million loan.
“The gas-piston power unit will be the first of this type in Armenia and also the first to be built without state guarantees for the generated electricity purchase. That is, they build at their own risk to sell electricity on the wholesale electricity market,” Deputy Minister of Territorial Administration and Infrastructures Hakob Vardanyan said.
According to him, this is one of the first achievements of the local market after the transition to market relations in Armenia from February 1, 2022. “Earlier, for the construction of such production facilities, the state provided purchase guarantees, pledging to purchase all products for a certain period, say, 20 years. Here, there are no obligations on the part of the state, they will sell their electricity under a simplified procedure,” the deputy minister explained.
Mr. Vardanyan noted that he does not have information about the cost of this project, since it is private, and the state does not have any obligations here. As for construction, excavation work which does not require licensing has already begun at the site of the operating Hrazdan TPP.
“The company has not yet applied for a license, but no difficulties should be expected, there are no arguments for refusing to issue a license in the future,” Vardanyan said.
According to him, it is planned to complete the construction of a new unit in July-August 2024, after which work will begin on connecting to the power system and adjustment. This process will last 2-3 months, and next autumn, in September-October, the new power unit will be in operation.
A feature 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 turned off.
The fate of today's Hrazdan TPP
According to Vardanyan, the operating Hrazdan TPP should be closed and dismantled in the future. However, according to him, the problem is that so far it has not been possible to rid it of the role of a backup station - the power system needs such small capacities.
“This TPP is now used only for regime regulation - out of two blocks of 200 MW each, only one operates, and then no more than 150-160 MW (up to 90 MW at night). From year to year, its role is decreasing, in the future it will be replaced by another, more maneuverable plant, and the new 50 MW plant is quite suitable for these purposes,” the Deputy Minister noted.
About the heating plant
Hrazdan Energy Company (RazTES) OJSC was established in 2004 by contributing to the authorized capital of the company the property complex of the Hrazdan thermal power plant, transferred by Armenia to the ownership of the Russian Federation as a repayment of the state debt. Since March 2017, it has been owned by Tashir Capital CJSC (part of the Tashir Group). The station itself has been in operation since 1966 (4 power units with a total capacity of 810 MW were installed).
In the domestic market of Armenia, RazTES has the status of a balancing plant, and for domestic consumption, the plant generates electricity only when there is a shortage of electricity (mainly in the autumn-winter period and during the idle period of the nuclear power plant).
About the EDB loan for the new block
A loan agreement between the Eurasian Development Bank (EDB) and H Energy Solutions (Tashir group of companies) to provide $26 million to finance the construction of a new power unit based on the Hrazdan TPP was signed in July 2023. The construction will use highly efficient modern equipment that meets international environmental standards, which will contribute to environmental protection.
The electricity produced within the framework of the project will be supplied both to the free competitive electricity market of Armenia and for export. The implementation of the project will enhance the diversification of generation in Armenia and increase its efficiency. The plant is scheduled to be commissioned in mid-2024.