Armenia resists calls to close nuclear plant

By bne IntelliNews November 16, 2011

Clare Nuttall in Almaty -

The recent earthquake in Turkey may have sparked fresh calls for the quick closure of Armenia's ageing Metsamor nuclear power plant, but with Yerevan struggling to find the $5bn needed to build a replacement, they are likely to fall on deaf ears.

Local environmental groups and Armenia's neighbours have long been lobbying for the Soviet-era plant to be closed. They fear its location in the densely populated south Caucasus, which is a highly active seismic zone, could lead to a worse disaster than Chernobyl. Yerevan does plan to decommission Metsamor, which was built in 1970, and replace it with a new nuclear power station. This was originally due to happen by 2017, but it is looking increasingly likely this could be delayed by at least a few years.

Russia is committed to helping Armenia build a new power plant. The two countries set up a joint venture to build the new plant in 2009, and the following year signed an agreement on technical and financial cooperation for the project. "For us there are no doubts... We are not just ready, we want to participate in the elaboration of the financial package," Rosatom deputy director Nikolay Spassky told journalists in Yerevan on October 27.

Up to one fifth of the total project cost of around $5bn could be covered by the Russian government and Russian energy companies. However, recent comments by Russian officials show an awareness that the project will be both difficult and expensive. Speaking after a meeting with his Armenian counterpart Serzh Sarkisian in Moscow on October 25, Russian President Dmitry Medvedev said that discussions were continuing, and he hoped the two countries would work out an optimal scheme for cooperation. "Frankly, it requires massive incentives, as these are not cheap projects," Medvedev told journalists.

Stress tests

Calls for Metsamor to be closed are renewed each time an earthquake hits the region. The deadly one on October 23 in neighbouring Turkey's Van region again raised questions about the plant's safety. Turkey's Energy and Natural Resources Minister Taner Yildiz says he will appeal to the International Atomic Energy Agency (IAEA) for the plant to be closed. Government officials from Azerbaijan, which has even more hostile relations with Armenia than Turkey, have also appealed for closure of the plant.

The Armenian government insists that Metsamor, despite being one of the world's oldest nuclear power plants, is safe and points out that it was built to withstand earthquakes of a magnitude of up to nine points on the Richter scale. A team of experts from the IAEA visited Armenia from March 16 to June 2 at the government's request, concluding that Metsamor's "level of risk is acceptable". Most of the problems that the final report identified concerned employee practices rather than the plant itself. There are plans to carry out additional stress testing in April 2012, with experts from the EU and the Council of Europe taking part in the examinations.

The IAEA inspection followed the crisis at Japan's Fukushima plant, which was severely damaged by the magnitude-9 earthquake on March 11. According to Ferenc Dalnoki-Veress, scientist-in-residence and adjunct professor at the James Martin Centre for Nonproliferation Studies, the similarities of Metsamor with Fukushima are striking. "My own feeling is that no reactors should be constructed in a seismic area, especially not as active as Armenia and not a third-generation nuclear power plant," Dalnoki-Veress tells bne. "There is also the security issue that needs to be discussed. Armenia is in a very contentious area in terms of security and just as a natural event could cause a lack of cooling a terrorist event could do the same. This needs to be also taken into account."

Back in 1998, Metsamor was closed down by Soviet officials after the devastating Spitak earthquake, which killed over 25,000 people. However, the Armenian government decided to re-open the plant seven years later because of the newly independent country's pressing need for energy. The economic blockade imposed by its neighbours Azerbaijan and Turkey after the Nagorno-Karabakh war threw Armenia back on its own resources.

Local and international environmental groups are calling for Metsamor to be closed without delay, and they oppose plans to replace it with another nuclear power plant. Jan Beranek, nuclear energy project leader at Greenpeace International, describes Metsamor as "a significant threat" to the region, and points out that there is the danger of an accident even at the most modern reactors. "The probability of a heavy accident could be even higher in Metsamor due to high seismic risks, obsolete design and aging reactor," Beranek tells bne.

Lacking the rich fossil fuel resources of its neighbours, Armenia has relied for the last four decades on nuclear energy. Although relations with Turkey have thawed slightly, Armenia still has no relations with its oil and gas rich neighbour Azerbaijan.

There has been some progress in developing alternative energy sources. A report from the World Bank, "Energy Reforms in Armenia: On the Way to Energy Security", points out that the market for small hydropower stations is well developed. The country already has over 90 small hydropower plants, and the government has adopted legislation that requires that the national electricity grid buy electricity generated by small hydropower stations for the first 15 years after they become operational. However, Armenia does not yet have alternative means to generate the 40% of its electricity needs that are currently supplied by Metsamor.

Related Articles

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

EURASIA BLOG: Spectre of further devaluation stalks Azerbaijan

bne IntelliNews -   That President Ilham Aliyev's party, the New Azerbaijan Party (YAP), won the November 1 parliamentary elections by a landslide took no-one by surprise: YAP has not lost a single ... more

COMMENT: Fading glow of Islamic finance calls for fresh thinking

Gary Kleiman of Kleiman International - Islamic finance, once hailed in the wake of the 2008 global financial crisis as an answer to the speculative excesses of Western banking, ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.