Relatively cold winters have already led to higher awareness within Armenian society on the cost of energy consumption. In addition, thanks to multiple environmental projects implemented in Armenia over the past few years (e.g. by EBRD, GCF and KfW) aimed at informing the population and businesses, a significant increase in awareness of energy efficiency, renewable energy, water preservation and environmental topics has been observed: various studies concluded that around 65% of the population is widely familiar with the topic. Many businesses have indeed realised that investments in green solutions not only lead to reduced operating costs but also to improved businesses competitiveness, increased output/yields, higher product quality, greater reliability in production and the ability to enter new markets. There is a steadily increasing number of businesses with a good understanding and knowledge of these issues, and they are in fact actively investing in green measures. However, there is still no special interest in investing in green technologies unless there is a corresponding economic benefit. Therefore, the greatest challenge regarding environmental awareness continues to be conveying the importance and significance of energy efficiency investments to the general population.
Global trends indicate economic shifts towards more energy-efficient economies and increasing investments in renewable energy. As a result of rising market demand, the relevant green products and technologies are expanding in Armenia too. For the most widespread energy-intensive technologies like HVAC and lighting systems, there is a sufficient market supply of the newest energy-efficient products in Armenia. All major producers of HVAC and lighting systems have official representatives in Armenia who, although they may not have the entire range of products on hand, can order them in a relatively short period of time. However, there are no representatives in Armenia for larger special-purpose equipment, such as specialised production lines or food-processing machines. This type of equipment is imported, mostly from Russia, Europe or Asia.
Over the past few years, the Armenian government has made significant efforts to improve the framework conditions for energy efficiency and the use of renewable energies. Aside from further improving the National Energy Efficiency Action Plan (NEEAP) to accelerate implementation of its national energy efficiency policy, other significant steps include: introducing appliance labelling for gas-and electricity-consuming appliances (2015), defining requirements for thermal insulation of buildings (2016), further adjusting the feed-in tariff structure through the extension to solar power installations (2017), implementing net metering for solar PV installations (2016, improved 2018) as well as defining the technical regulations on energy saving and energy efficiency in newly constructed multi-apartment buildings and facilities constructed (reconstructed, renovated) with state support (2018).
The further adjustment of feed-in tariffs, and specifically net-metering systems in 2018, led to solid development of solar PV projects in the country. In the last two years alone the installed capacity under feed-in-tariff-based projects increased eightfold and reached around 57 MW, with more than 25 installations (projects under finalisation are included; 2018: 7 MW, 9 projects). The installed capacity under the net-metering scheme simultaneously increased tenfold and reached around 75 MW with almost 4,000 installations, compared to 7.8 MW (700 projects) two years ago. During the same period, the first local solar PV panel production factories were established. There are a few companies that supply and install SHWS and PV systems, as well as a large number of suppliers which carry these products in addition to their core product range. Thanks to the positive development in terms of solar energy use, its share in electricity production had more than doubled by the end of September 2020 (0.76% of total) compared with year-end 2019 (0.32%); this still looks somewhat insignificant, but it represents a promising starting point.
Similar dynamics are observed in other sectors, such as tourism and agriculture. For example, over the past five years more than 250 hotels and resorts have been constructed, and many existing properties renovated with dedication to energy efficiency optimised energy consumption, useful lifetime and the materials. Typical investments comprise eco-friendly thermal insulation, low-E windows, energy-efficient heating systems, LED lighting systems and even rooftop PV systems. In addition, and very important to note, more than 1,700 new jobs were created in this area.
Apart from enormous investments by the Armenian food processing industry in modern equipment and machinery (for production and packaging lines, cooling chambers, etc.), there was also active development in the primary agricultural sector. For example, at present every sixth greenhouse (2019: 1,300 with 177 ha) is operating with high-performing technologies, and an additional 26 ha of greenhouses with the newest technology are under construction. Typical features of such hothouses are polycarbonate covers or two-layer inflatable covers which provide up to 30% energy savings compared to conventional glass-based greenhouses. Another example are forage harvesters, which are becoming popular among Armenian livestock farmers. Such equipment harvests haylage in order to produce silage in particular, and high-performance machines have significant advantages, including energy efficiency-related benefits.
Although the residential housing stock has increased by more than two million m2 (around 2%) over the past five years, there is only a small number of energy-efficient buildings, mainly established in the context of international projects such as UNDP. In this connection, it can be mentioned that a newly constructed building under a project of the National Mortgage Company has recently received an energy efficiency passport (class B). Even if the number of relevant buildings is small, it is again a starting point for the implementation of further projects in the construction sector. Additional energy-efficient buildings will follow and the construction of the first Armenian passive house is merely a matter of time.
Each of these small success stories illustrate the current conditions in terms of the economic, environmental and societal impacts of energy efficiency development in Armenia. The implementation of energy efficiency activities is still in its early stages; however, the first and most important steps have been taken and a solid foundation has been set for further development. Finally, yet importantly, energy efficiency is at the heart of any strategy aiming to ensure secure, sustainable and inclusive economic growth.
Subscribe to our quarterly newsletter