Presentation of Armenia`s Market Liberalization and Electricity Trade  Program took place

ArmInfo. A presentation of the Market Liberalization and Electricity Trade (MLET) Program took place in Yerevan, prepared jointly with specialists involved in this work from  the United States Agency for International Development (USAID), which  previously allocated a grant to Armenia in the amount of $ 8.5  million.

At the presentation, which was attended by about a hundred energy  specialists representing various power generating companies of the  country, foreign experts acquainted the audience with the specifics  of reforming the electricity market in Armenia, with the specifics of  the first transitional stage, the beginning of which was determined  from February this year.

As Deputy Minister of Territorial Administration and Infrastructures  in charge of the energy sector Hakob Vardanyan said in an interview  with ArmInfo correspondent, a free electricity market can push the  process of attracting investments in the generation sector, licenses  for which will be liberalized without purchase guarantees. This will  create a more competitive and open market. He stressed that over the  past 2.5 years, the government has studied the experience and  practices of many countries of the world and created a model inherent  in the Armenian specifics. He noted that liberalization will not in  any way affect the investment plans of the Armenian electricity  distribution networks, which have begun their serious modernization,  since it does not imply a change in the margin. The model of  interaction between the producer and the buyer of electricity will  change alone and will not affect the interests of the Electric  Networks of Armenia company, which has embarked on a modernization  investment program for a total of $ 720 million.

As it was said at the presentation, electricity should be viewed as a  commodity through the prism of supply and demand, including taking  into account the seasonal factor. By liberalizing the market,  consumers will be able to purchase this product not at an average  price, but at a cost. And in these conditions, service companies will  come into play, which will supply (sell) consumers with electricity.  The distribution function remains as a natural monopoly with its own  tariff and margin. The supply function will gradually diversify among  guaranteed service companies.

As the Deputy Minister noted, as for the liberalization of the  electricity export market, there are numerous problems that need to  be settled. In particular, if Georgia supplies electricity, then  Armenia should turn off the electricity supply on the "island" of its  territory - in Tavush or Lori. There is no possibility to work in  parallel mode, which creates certain obstacles. But this does not  mean that this work is impossible, Armenia works with Georgia in  these regimes, and the process continues once or twice a year. The  parallel mode can be activated in 2023-2024, when the construction of  the Iran-Armenia and Armenia-Georgia power lines is completed.