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Yervand Zakharyan Introduced the Works Carried Out and Future Plans

On August 8, in Yerevan TPP, was held the press conference of the Minister of Energy and Natural Resources Yervand Zakharyan.


Before presenting the works, the Minister toured the TPP with journalists, has got acquainted with the works after reconstruction in the combined cycle unit.



Before to answer to the journalists questions, the Minister Yervand Zakharyan spoke about the investment projects in the energy sector in recent years, particularly:


-Contribution of SKADA management and communication system project


- Construction program of new unit of the Yerevan TPP


-Iran-Armenia gas pipeline construction project


-Hrazdan TPP 5th unit, as well as a variety of other programs.


According to the Minister Yervand Zakharyan, this programs have ensured the uninterrupted energy supply of our economy.


The Minister introduced also the energy and natural resources sector's works carried out during the first half of 2014, the current state analysis and programs will be implemented.


First of all, the Minister talked about the key indicators of energy sector and noted, that in January-June of 2014 there was produced 3.74 billion kWh of electricity, which was decreased in 3.25% (3.86 billion kWh) compared to the same period of the 2013.


Except for the thermal power plant, where there has been an increase over the 0.87% of output volume, the all remaining stations have recorded the output decline.


Especially in the NPP it was 3.25 % and 7.74% in the hydraulic power plants, the latter is result of water scarcity.


Yervand Zakharyan marked, that in 2014, the proportion in the electrical energy consumption sector (by branches of economy), against the same period of 2013 was almost unchanged.


The consumption rate 1.45% growth fixed around population, 2.26% in budget organizations and 19.48% in the irrigation system.


The consumption decreased in industry about 1.17%, in drinking water system 4.99, in transport 6.01%, and 5.25% around other consumers.


The domestic consumption in the first half of 2014 decreased by 1.0 %, compared with the same period of 2013.


The minister also presented the natural gas import statistics, according to which in first-half of 2013 imports totaled 1.17 billion m3 (of which 218 million m3 from Iran), and in 2014 it amounted to 1.18 billion m3 (of which 196 million m3 from Iran).


The actual volumes of imported gas in the first half of 2014, compared with the first half of 2013, has increased by 1.4%, while the growth was registered in the energy sector about 14.6%, in gas refuel 6.3%  and 4.2% in consumers.


The natural gas consumption volume was reduced in industry by 17.4% and in population by 1.9%.


The Minister Yervand Zakharyan also touched upon the financial situation of the energy system.


According to him, already disclosed the main problems, because of which the system is in the difficult financial situation now.


One of these, the minister marked out

  • the non realistic energy balance in 2012-2013, as well as in 2013-2014 years
  • the ANPP additional stop
  • the lack of electricity production by hydroelectric power plants, due to the water scarcity, as a result the financial deficit about 27.6 billion AMD of "Electric Networks of Armenia" CJSC.

The minister also noted, that the operation costs required for the system companies, repair works and a number of loans servicing (including the budget loans) were not reflected enough in the existing approved tariffs.


Besides, in the conditions of chronically low funding of own needs, quite a lot of significant financial resources in the form of borrowings, about 21 billion AMD were allocated from the system to the "Nairit Plant" and "Vanadzor Chemprom" CJSC companies, for the payment of wages.


As a result, at 01.05.2014, only in state companies of the system is available to 136.94 billion AMD loan commitments, of which 129.15 billion were long-term budgetary loans (the "Yerevan Thermal Power Plant" CJSC 102.2 billion, the "High Voltage Network" CJSC 25.25 billion), while  the 7.8 billion AMD of short-term loans from local banks.


The rest of the commercial credit commitments totaled 21,0 billion AMD, of which 19.2 billion AMD to "Gasprom Armenia" CJSC.


Receivables totaled 35.0 billion AMD.


The damage of system's enterprise amounted about $ 10.4 billion AMD for the year.


The Minister spoke about the credit commitments accumulated in the "Electric Networks of Armenia" CJSC 94.0 billion AMD (of which 60.5 billion was long-term), the maintenance costs of which have serious impact on the performance of payments to generating stations on time.


According to Yervand Zakharyan, there are no unpaid tax liabilities and salaries in the system.


Yervand Zakharyan also referred to the issue of tariffs.


According to the Minister, the study of the expenses of electric power system's companies showed, that companies have about 17.9 billion of additional expenses were not included in the tariffs.


Therefore, it became necessary to review the electricity tariffs, and in the result, the final tariff, from the August 1, 2014, rose to 3.85 d / kWh.


Mostly, the prices do not reflect the expenditures of companies directed to exploitation and measures contributing to security.


In one company there are planned an amortization and profits, while in the other companies are not planned.


In the result, some of them work with the excessive profits, and others with the unjustifiable damages.


The companies need to have the necessary financial resources to ensure their safe operation and to bear responsibility for lucrative economic outcomes, which would also increase tax receipts.


We have our approaches based on the international experience and we believe, we will discuss them jointly with the Public Services Regulatory Commission and find solutions, said Yervand Zakharyan.


The Minister termed the safety level increasing and ensuring as the most important task of energy system. In this direction have been taken serious steps already.


Specifically, by the President’s order of October 23, 2013, was established the Concept of the  Energy Security of the RA, according to which the government has approved the 2014-2020 period program and schedule for the implementation of the provisions of the concept.


The measures include:

  • the programs to neutralize the internal and external threats
  • the electricity and gas consumption quota definition in the emergency and force majeure conditions
  • the issues of extending of the operation of existing nuclear power unit.

The issues of introduction of energy saving and renewable energy development measures in different areas of economy there have been included in the program.


-         We are planning to extend the term of operation of the second unit of the ANPP to 2026, and during that time, to start and to complete the construction of a new nuclear power plant, said Yervand Zakharyan.


The Minister also said, that in 2018-2019, in the territory of Yerevan TPP, will be built a new, modern unit with a capacity of 250-450 MW.


The future of the old thermo-unit is also uncertain.


The Minister Yervand Zakharyan thoroughly turned to the mining sector and noted, that there have been made extensive studies of the current situation, as a result, proceeding from the necessity, have been prepared necessary changes in the Mining Code and in the other normative-legal acts.


In the past and up to present, the granting of subsoil used in conventional coordinate system, which has led to serious problems and inconsistencies in the mining industry.


For this purpose, the electronic versions of the RA territory 1: 10000 topographical and cadastral maps are synthesizing now, in order to provide the coordinates to the mining users by global geographic <WGS-84> coordinate system.


The studies conducted in the area have revealed a number of flaws and gaps either in geological research companies, or in minerals extractive companies.


According to the Minister, for the correcting the situation it's necessary to verify and measure all the works done by the mining users.


At the moment it is planned to prepare a working plan, including the accounting and management automatic system implementation, revising the mining sphere management system and the human resources issues.


It is also intended to implement the digitize process of all materials available in "National Geological Fund> SNCO and to replace in the website, in order to make the material more accessible to the general public.


According to the Minister, there is a financial economic activity management improve problem both in the mining sphere and in the all energy system.