Abstract
Armenia stands at a pivotal moment in its energy trajectory, confronted by acute dependence on imported fuels and the pressing need for long-term sustainability. This paper examines Armenia’s energy security challenges through a detailed analysis of its current energy mix, infrastructure vulnerabilities, and geopolitical dependencies, particularly closed borders due to the conflict with Azerbaijan, dependence on Russian capital for domestic energy infrastructure, and reliance on Russian imports for gas and nuclear fuel.
The paper presents two complementary strategies to chart a more secure energy future: import diversification and reduction. The former advocates leveraging underused capacities and regional gas swaps to reduce reliance on a single supplier. The latter centers on scaling renewable energy deployment, improving energy efficiency, and electrifying transport and heating systems. Drawing on empirical data, the paper reviews the cost-effectiveness of solar energy generation supported by policy frameworks and public-private investment models.
In addition to recommended pathways towards clean energy transition, the paper discusses the broader socio-economic implications of energy insecurity, from industrial productivity losses to affordability gaps in household energy consumption. It calls for systemic reforms—including the establishment of a project preparation facility for private partnerships (PPPs), upgrades in energy governance, implementation of government incentive mechanisms and standards for clean energy projects and energy efficient technologies—to boost investment in energy infrastructure, unlock climate finance for clean energy transition and improve energy efficiency. Finally, this study is a foundational guide for policymakers, investors, and international partners committed to building a resilient, diversified, and sustainable energy system in Armenia.