PROMITHEAS-4: Knowledge transfer and research needs for preparing mitigation/adaptation policy portfolios

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1 PROMITHEAS 4 Overview of the Mitigation/Adaptation Policy Instruments in Armenia Task Leader: Prof. Anca Popescu Institute for Studies and Power Engineering Romania, 2011

2 This report has been read, commented and approved by all members of the PROMITHEAS-4 Scientific Committee. It was also disseminated for comments, through BSEC PERMIS and BSEC BC, to all relevant governmental and business authorities and partners before its finalization. Partners from the beneficiary countries* of the consortium were encouraged to contact direct national authorities, agencies, institutions and market stakeholder for comments before the finalization of this report (Annex 1). Members of the PROMITHEAS 4 Scientific Committee: 1. Prof. Dimitrios MAVRAKIS, NKUA KEPA (GREECE) -Editor 2. Dr. Popi KONIDARI, NKUA KEPA (GREECE) Assistant to the editor 3. Dr. Harry KAMBEZIDIS, NOA (GREECE) 4. Prof. Bernhard FELDERER, IHS (AUSTRIA) 5. Prof. Bilgin HILMIOGLU, TUBITAK MAM (TURKEY) 6. Prof. Vahan SARGSYAN, SRIE ESC (ARMENIA) 7. Prof. Dejan IVEZIC, UB FMG (SERBIA) 8. Prof. Mihail CHIORSAK, IPE ASM (MOLDOVA) 9. Prof. Agis PAPADOPOULOS, AUT LHTEE (GREECE) 10. Prof. Alexander ILYINSKY, FA (RUSSIA) 11. Prof. Anca POPESCU, ISPE (ROMANIA) 12. Prof. Andonaq LAMANI, PUT (ALBANIA) 13. Prof. Elmira RAMAZANOVA, GPOGC (AZERBAIJAN) 14. Dr. Lulin RADULOV, BSREC (BULGARIA) 15. Prof. Arthur PRAKHOVNIK, ESEMI (UKRAINE) 16. Prof. Sergey INYUTIN, SRC KAZHIMINVEST (KAZAKHSTAN) 17. Prof. Alvina REIHAN, TUT (ESTONIA) *Turkey, Armenia, Serbia, Moldova, Russia, Romania, Albania, Azerbaijan, Bulgaria, Ukraine, Kazakhstan, Estonia. The EU, the Consortium of PROMITHEAS 4 and the members of the Scientific Committee do not undertake any responsibility for copyrights of any kind of material used by the Task Leaders in their report. The responsibility is fully and exclusively of the Task Leader and the his/her Institution. Acknowledgments: The Task Leader of this report acknowledges the contribution of Ms. Camelia Vasile, Prof. Vahan Sargsyan and Mr. Harutyun Grigoryan for the development of this overview. 2

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4 Table of Contents ACRONYMS AND ABBREVIATIONS INTRODUCTION NATIONAL FRAMEWORK FOR M/A POLICY INSTRUMENTS ECONOMIC AND POLITICAL PROFILE ENERGY POLICY PROFILE NATIONAL CLIMATE CHANGE POLICY MITIGATION Mitigation policies Mitigation policy instruments ADAPTATION Adaptation policies Adaptation policy instruments...23 BIBLIOGRAPHY

5 Acronyms and abbreviations ANRA Armenian Nuclear Regulatory Authority ANPP Armenian Nuclear Power Plant DG Director General EC European Community ENP European Neighbourhood Policy EU European Union FNC First National Communication GDP Gross Domestic Product GEF Global Environmental Facility GHG Greenhouse gases GoA Government of Armenia HPP Hydro Power Plant IAEA International Atomic Energy Agency IUCN International Union for Conservation of Nature and Natural Resources km Kilometre km² Square kilometre kv Kilovolt m Meter M/A Mitigation/adaptation MEA Multilateral International Environmental Agreements mm Millimetre MoA Ministry of Agriculture MoES Ministry of Education and Science Mt. Mountain MW Megawatt NAP National Action Plan NATO North Atlantic Treaty Organization NCSA National Capacity Self Assessment (for Global Environmental Management) NEAP-2 The Second National Environmental Action Programme NPP Nuclear Power Plant OSCE Organization for Security and Cooperation in Europe PPP Purchasing Power Parity PSA Probabilistic Safety Assessment RA (RoA) Republic of Armenia REC Regional Environmental Center SAR Safety Analysis Report SCADA Supervisory Control and Data Acquisition SNC Second National Communication 5

6 SNCO Statutory Nature Conservation Organisation SPA Special Protection Area TAIEX Technical Assistance Information Exchange TECDOC Technical Document TPP Thermal Power Plant(s) UN United Nations UN ECE United Nations Economic Commission for Europe UNCBD United Nations Convention on Biological Diversity UNCCD United Nations Convention to Combat Desertification UNDP CO United Nations Development Program Central Office UNEP United Nations Environment Program UNFAO Food and Agricultural Organization of the United Nations UNFCCC United Nation Framework Convention of Climate Change UNIDO United Nations Industrial Development Organization US$ United States Dollar USA United States of America USAID United States Agency for International Development USSR Union of Soviet Socialist Republics WB Weather bureau WWF Worldwide Fund (for Nature) 6

7 1. Introduction The Republic of Armenia is landlocked mountainous country, located at the crossroads of Europe and Asia, sharing borders with Turkey to the West, Georgia to the North, Azerbaijan to the East (with Nakhichevan to the Southwest), and Iran to the South. The Capital city of Armenia is Yerevan. Having an average elevation of about 1,700 meters above the sea level (ranging from 3,000 to 400-1,000 meters), Armenia is the most mountainous country of the Caucasus region. The lowest elevation (380 m above sea level) is in the Debed River valley, and the highest 4,090 m above sea level is the Mt. Aragats. Lake Sevan is one of the largest highland fresh-water lakes in the World, located about 1,900 m above sea level. Its total area is about 1,400 km². The main rivers in Armenia are: Araks (1,072 km total, 158 km within the territory of Armenia), Arpa (126 km, 90 km in Armenia), Hrazdan (146 km), Debed (178 km, 152 km in Armenia), and Vorotan (179 km, 119 km in Armenia). Armenian climate is continental with hot summer and cold winter due to the highland character of a land shaft. The situation was even worsened because of the forests cutting. In winter, temperature may reach -46 C, while in July and August temperature may grow up to 42 C. Summer period is very long and dry; its duration is about four months. The average precipitation is around 300 mm per year. Total land area of the country is 29,743 km 2. The arable land is only 17%, meadows and pastures about 30%, forest and woodland about 12%. Administratively, Armenia is divided into 10 regions (Marzes), plus the capital city Yerevan [18]. The population of the country is around 3.25 million inhabitants (2009), of which 64% lives in urban areas. Armenia is a densely populated country with a density of person/km 2. The historical population information is shown in Table 1. Table 1. Population information Indicators 1970 a 1979 a 1989 a 2001 a 2005 b 2006 b 2007 b 2008 b 2009 b (%) Growth rate 2009 Population (millions) Population density (inhabitants/km 2 ) Urban population as percent of total Area (1000 km 2 ) 29.8 a Formal data of the census of population b Country Statistic Information Source: IAEA Energy and Economic Database; Data & Statistics/The World Bank; National Statistical Service of RA. The population average growth rate from 2001 to 2009 is about +1.12%. The concentration of population is not equal in different areas of the republic. The Ararat Valley is the most populated territory of the country with the density of 245 person/km 2. Its area makes about 26.7% of the total territory, and its population reaches to 58.8% of the total population. Yerevan, the capital of the Republic of Armenia, lies in the Ararat Valley and is home to 1.1 million people, which is about one third of the total population. The highland areas have much less population with the density of 24 person/km 2. 7

8 2. National framework for M/A policy instruments 2.1. Economic and political profile Based on the results of the referendum on September 21, 1991 (99% voted for independence), the parliament (The Supreme Soviet of the Armenian Soviet Socialistic Republic) adopted the Declaration of Independence and announced the independence of the Republic of Armenia (RA). The Constitution was adopted on July 5, 1995, and according to the Constitution (Second) adopted through a national referendum on 27 November 2005, Armenia is an independent and democratic country with a presidential form of government. The President is elected by popular vote for a fiveyear term. In accordance with the Constitution, the President ensures compliance with the Constitution, the normal operation of the legislative, the executive and the judiciary, and serves as the guarantor of sovereignty, territorial integrity and security of the Republic. The executive body is the Government of Armenia headed by the Prime Minister. The National Assembly is the legislative body of the country (131 seats; members serve five-year terms). Justice in the Republic of Armenia is carried out by Courts in accordance with the Constitution and the Law. After the disintegration of the Soviet Union, an economic crisis broke out, and Armenia suffered from sharp decline in production during the period The country undertook great efforts to overcome it. Since then, the situation has been gradually stabilized, and the republic is coming out of the crisis following the transition to a market economy. During the period , the Gross Domestic Product (GDP) has increased on 347%, and the average growth rate was 20.2 % per year. The historical GDP information is shown in Table 2. Table 2. Gross Domestic Product (Millions US$) Indicators Growth rate (%) GDP (current US$ at market prices) 4,098 1,912 2,118 4,900 6,385 9,206 11,662 8, % GDP (Current US$ at market prices) per capita 1, ,523 1,982 2,853 3,606 2, % GDP (2000 US$ using exch. rate) n/a n/a GDP (2000 US$ using exch. rate) per capita n/a 515 n/a 1, ,363 1,445.3 n/a GDP(2000 US$ using PPPs) 1, n/a 1,329 1,507 1,710 1,826 n/a GDP(2000 US$ using PPPs) per capita n/a 2,310 n/a- 4,130 4,680 5,299 5,639 n/a GDP by sector (%): - Agriculture % - Industry (a) % - Services (b) % (a) Industry includes also construction, transport and communication (b) Services include trade, net taxes and other Source: IAEA Energy and Economic Data Base; Data & Statistics; The World Bank; Country Information. Armenia is not rich in mineral raw materials. There are only a few items of considerable industrial value: copper, bauxite, molybdenum, precious metals, perlite, diatomite and coal. This factor mainly determines the economic structure of the republic. There has traditionally been very little heavy industry. The manufacturing sector has a prevailing share in GDP. 8

9 2.2. Energy policy profile Before the disintegration of the USSR, Armenia, as a part of the Soviet Union, was under the unified All-Union energy policy. After becoming an independent state the energy sector and the nuclear energy sector in particular, were deeply affected by the economic difficulties during the market transition and were in need of reorganization and de-regulation. According to the Law On Energy of the Republic of Armenia, the main principle of the Government policy in the Energy sector is the separation of functions of economic activity, state management and regulation. According to the main regulating principle, the inequality of conditions between the licensee and consumer is excluded and the functions of regulation were given to the Public Services Regulatory Commission (PSRC). The level of electricity tariff was 25 drams and remained the same until April 2009; afterwards its value has increased up to 30 drams. The state authority for supervision on nuclear and radiation safety was established by the Government decree N573, It was called the State Department for Supervision on Nuclear and Radiation Safety of Utilization of Nuclear Energy at the Government of RA. By the Government decree N70, , the Department was authorized to have also the regulating functions, and, according to that decree, it prepared a new Statute which was approved by Governmental decree N385, The Department had a new name Armenian Nuclear Regulatory Authority (ANRA). The ANRA was under a direct subordination of the Armenian Government and independent from those organizations responsible for development and utilization of atomic energy. Armenia has a single-stage licensing process for NPP, and the licensing authority is the ANRA. The licensee is responsible for the safety of the NPP. The licensee is obliged by the license to: Guarantee the keeping of principles, criteria and requirements on the nuclear and radiation safety, as well as the conditions or acts of the temporary operation permission; Inform ANRA on the deviations of the conditions of the temporary operation permission, as well as the incidents and emergencies during NPP Unit operation. The implementation of a stabilization policy with the crucial role of restarting the Armenian Nuclear Power Plant (ANPP) allowed the country to overcome the electric energy crisis of the post- Soviet period. In March 2000, the National Assembly of RA adopted the Law On Amendments and Additions to the Law On safe Use of Nuclear Energy for Peaceful Purposes. In particular, one of the amendments reads: Those objects which are of safety importance shall be constructed and decommissioned by the Law, which draft should be submitted to the Government. The issues of the ANPP safety upgrading are of much importance for the Armenian Ministry of Energy and Natural Resources being first rate priority. The safety level of the ANPP during the times of very limited financial resources was one of the main concerns of the Armenian Government. After numerous consultations with the experts from the USA, Western Europe countries and Russian Federation, being also assisted by the experts from the IAEA, Armenian specialists developed a new programme of the ANPP safety upgrading. It was called List of safety upgrading activities for the period of of Unit 2 of the Armenian NPP. In , in the frame of the IAEA Program on Technical Cooperation, there was developed the project titled Energy and Nuclear Power Planning study for Armenia which was published in July 2004 as TECDOC The document included the future energy demand forecast for Armenia and the capacities which will be needed to cover that demand. During the study, two options of the development of the Energy Sector of Armenia were considered: with the use of the thermal power plants only; with the use of both the thermal and nuclear power plants. 9

10 The second option of the Energy sector development was preferable in consideration of the criteria of energy safety and energy independence, ecology aspects, as well as from the social point of view. On the base of this study, the Least Cost Generation Plan and The Comprehensive National Energy Strategy and Energy Sector Improvement Action Plan were developed in Based on the above mentioned studies The Armenian Ministry of Energy Action Program According to the National Security Strategy was adopted by the Government decree N1296 of The adopted Program envisaged the commissioning of the new nuclear power unit (s) immediately after the shutdown of the existing one to cover the lack of capacity. According to that document, the preference was given to the 1,000 MW nuclear power units taking into consideration the needs of country energy independence. In May 2010, the 4 th IAEA working meeting was held on Coordination of International assistance to the ANPP safety upgrading in Yerevan. The decision was made to review the existing List of safety upgrading activities for the period of of Unit 2 of the Armenian NPP on the base of the documents SAR and PSA. Now Armenia is covering its electricity demand completely and can ensure the export of electricity to neighbouring countries. In the near future, however, additional energy sources may be required as the economy of the republic is recovering and the living standard is increasing steadily. For Armenia, it is obligatory to be involved in the regional power market that is currently in the process of formation and foresees the establishment of a circular power system of Black Sea countries, as well as creation of North-South parallel operation relations (Russia Georgia Armenia Iran, and others)[19]. The objective points of the current strategies are the development of the Armenian energy sector and the identification of the affordable measures to achieve the principle goals. Energy Law of RA Subject of Regulation of the Law: This Law shall regulate the relationships between the government bodies, legal entities of the energy sector operating under this Law, and consumers of electricity, thermal energy and natural gas in the Republic of Armenia. Objective of the Law: The objective of this Law is the establishment of the government policies in the energy sector and the mechanisms for their implementation. Related to the Law the basic principles of the state policies for the energy sector are as follows: Enhancement of competition and efficient operation in the energy sector and creation of essential conditions for the development of a competitive environment; Efficient use of domestic energy resources and alternative sources of energy and implementation of economic and legal mechanisms for that purpose. Ensuring safety in the energy sector; Increasing the energy independence of the Republic, including ensuring the maximum utilization of generating capacities and differentiation of domestic and imported energy resources ; Ensuring the protection of the environment; Encouragement of scientific-technical progress and integration of new energy-efficient and energy-saving technologies, as well as encouragement of personnel training and re-training, etc. [10]. Energy Sector Development Strategies in the Context of Economic Development in Armenia Energy Sector Development Strategies in the Context of Economic Development in Armenia was adopted by the Government of Armenia in the June 23, 2005 session N 1 resolution of N 24 10

11 protocol. The primary objective of Armenia's energy sector development strategy is to formulate strategic goals for the development of the energy system in Armenia and identify the avenues to achieve those goals, based on the principles adopted by the international community for sustainable development, particularly in the energy sector, and guided by the directions of economic development in the Republic of Armenia and past energy sector experience. Basic principles of the Energy Sector Development Strategies were developed based on the 1992 UN Environment and Development Conference (the Rio Conference or the Planet Earth Summit), Agenda 21 Global Sustainable Development Action Plan, as well as the 2002 Johannesburg Sustainable Development Summit. The strategies also reflect the commitments stipulated by a number of other environmental conventions ratified by the Republic of Armenia, the target provisions of the Poverty Reduction Program, and the principles of the state policies for the energy sector provided in the Energy Law of the Republic of Armenia. These Strategies are aimed towards the following goals: Achieving sustainable economic development in Armenia; Ensuring safety in the energy sector; Enhancing the energy independence of the country, including diversification of imported and domestic energy resources and ensuring maximum utilization of generating capacity; Ensuring efficient use of domestic energy resources and alternative sources of energy and implementation of economic and legal mechanisms for that purpose. These Strategies are aimed at the resolution of the following primary issues: Providing reliable energy supply at low rates to satisfy the fundamental needs of all customers, while enhancing energy conservation; Avoiding methods of energy import that might expose the security and economy of Armenia to events political impacts beyond the control of the Republic of Armenia; Ensuring the safe operation of the ANPP through 2016 or such time as its energy can be replaced and decommissioning can proceed without unacceptable economic, ecological and energy security impacts; Ensuring ecologically sustainable energy supply, based on the principles of sustainable development and in compliance with the international environmental commitments of the Republic of Armenia; Construction of a financially sustainable energy system, encouraging the economically efficient operation of all energy suppliers, which would bring forth interest among the investors and private capital; Creation of an power system that is export oriented and generates high added value; Development of research programs targeted at the implementation of the goals and primary objectives specified in these Strategies, with the employment of the newest energy sector technologies known in the world, as well as the latest developments in the global energy system. It is anticipated that the intensive operation of the existing energy infrastructure will support the development of a more energy intensive economy in the upcoming decade. It is assumed also that during energy intensiveness will stabilize, since during the previous decade new energy efficient technologies will have been built and operated in all sectors of economy. Power system of Armenia was developed to meet the base demand of the South Caucasus Unified Energy System (in Soviet Union time), and was exporting 20-25% of its electricity generation. At this point, the total installed capacity of Armenia s electric energy system is excessive amounting to around 3,144 MW, 2,420 MW of which are operable. 11

12 The evaluation process at the power plants revealed that: 38% of the installed capacity has been in operation for more than 30 years; The primary equipment at TPPs has reached 200 thousand hours level and does not correspond to international standards in terms of technical, economic and ecologic criteria; 70% of the installed equipment at HPPs has been in operation for more than 30 years, and 50% for more than 40 years. Accordingly, modernizing and replacing the generating capacity is essential. Replacement and modernization is also needed in the electric energy and natural gas transportation and distribution networks, as well as at the underground storage of natural gas. Investments in these areas will greatly contribute to the continuing reduction of technical and commercial losses. Future investments will primarily be used to import energy efficient technologies and contribute to energy conservation. The Armenian Government has already taken the following steps aimed at the improvement of the state of country s energy sector: The electric energy and gas sectors were restructured. The gas supply system and the electric distribution system, the Sevan-Hrazdan Cascade of HPPs, and the small HPPs were privatized; The Hrazdan TPP has been transferred to the Russian Federation in repayment of past debts; The financial flows management of the ANPP has been transferred to the Russian company INTER RAO UES ; Reliability of energy supply has been enhanced; Savings from optimization of generating plant operations permitted preservation of the lowest possible tariff for power generation, which greatly contributed to the efficient operation of the system; Collections from customers have been greatly improved and now they pay their full electricity and natural gas bills; The Power System Operator and the Settlements Center have been established to have a system of direct wholesale power purchase and sale contracts between generators and the distributor; On the basis of Resolution No N of November 6, 2003, the Financial Rehabilitation Program for Armenia s Energy Sector State-Owned Companies has been adopted to resolve the burden of previous debts; Modernization of Kanaker HPP units were accomplished by German and World Bank loan resources; Modernization of the greater part of the 220 kv transmission network substations by German and World Bank loan resources were completed; The second Iran-Armenia electric transmission line has been constructed; The SCADA system has been implemented through USAID technical assistance; The Koghbi gas metering point has been built by the EU Inogate project, and some modernization to the Abovian underground gas storage were completed; In 2005 the speed regulators at Tatev HPP of Vorotan HPP Cascade were replaced with EU TACIS assistance; The Japanese JBIC loan will permit the 2005 commencement of modernization of 33 substations of 110 kv of the distribution network and procurement of about 150,000 singlephase electronic meters as well as the gradual implementation of the SCADA system in the energy sector; 12

13 A loan agreement signed between the Government of the Republic of Armenia and Japanese Government on March 29, 2005, will provide 26,409 billion yen on preferential terms for construction of Yerevan combined cycle power plant (CCPP). The first phase of construction of the Meghri-Kajaran section of Iran-Armenia gas pipeline has commenced; A grant provided by Iran, has permitted construction of the first 2.6 MW of wind farm at the Pushkin Pass. These reforms are contributing to the growing economic development in the country. A vivid example of that is that in , for the first time since independence, Armenia s power sector showed an actual profit [7]. The Action plan for the Ministry of Energy of RA stipulated by the Provisions of the National Security Strategy of RA The Action Plan of the Ministry of Energy of the Republic of Armenia is closely matched with the provisions of the National Security Strategies of the Republic of Armenia, based on the Energy Sector Development Strategies within the Context of the Economic Development in Armenia. It is noticeable that the following principles of the National Security Strategy are mainly the targets provided for the resolutions of the same issues as they have been set forth in the Energy Sector Development Strategies: 1. Provision of reliable energy supply at low cost to satisfy the fundamental needs of all customers, enhancing, in the meantime, energy conservation; 2. Implement methods of energy import, in case of which the security and economy of Armenia might not be exposed by uncalled political impacts out of the control of the Republic of Armenia; 3. Ensuring of maximum utilization of the domestic energy resources and nuclear energy; 4. Ensuring the safe operation of the ANPP through 2016 or until the moment when its energy is possible to replace by other energy resources, and proceed with the decommissioning without any unacceptable economic, ecological and energy security impacts; 5. Ensuring ecologically safe energy supply, based on the principles of sustainable development and in compliance with the international environmental commitments of the Republic of Armenia; 6. Construction of a financially stable energy system, encouraging the economically efficient operation of all energy suppliers, which would bring forth interest among the investors and private capital; 7. Creation of an electric energy system that is export oriented and generates high benefit. Armenia is not considered a country that exports fuel and energy resources. However, we should certainly make use of our favourable geographic position for the transit of such resources, the availability of our existing and expandable underground gas storages and ensure the legislative, political and institutional compliance prescribed by the Collaboration and Cooperation Agreement that serves a warrantee for the transits. This will provide for the maximum use of the Armenian energy system potential in terms of the transit of the Caspian (including Iranian) fuel and energy resources to Europe and will create an opportunity for the attraction of the EC investments intended for that purpose. Thus, the objective of ensuring an adequate level of Armenia s energy security and independence includes the following critical directions of the Energy Sector Development Strategies: Utilization of renewable energy resources and energy conservation; Nuclear energy; 13

14 Diversification of supplies and regional integration; Ensuring environmental safety; Ensuring social policies, financial stability and economic efficiency. The action plan for the Ministry of Energy and natural resources of the Republic of Armenia stipulated by the provisions of the national security strategies of the Republic of Armenia includes the principal activities as follows: Construction of Small HPPs (up to 260MW capacity); Construction of Lori-Berd HPP (60MW capacity); Construction of Shnogh HPP (75-100MW capacity); Construction of Meghri HPP (140MW capacity); Construction of wind plants (200 MW capacity); Construction of cogeneration gas-turbine energy unit of 208 MW capacity in Yerevan TPP; Completion of construction of the 5 th energy unit of up to 440 MW capacity of Hrazdan TPP; Construction of new energy unit of up to 1,000 MW capacity of Armenian NPP; Completion of already started upgrading process of electricity transmission network; Upgrading of electricity distribution network and increase of service quality; Construction of the second phase of Iran-Armenian gas main pipe line; Investments in transportation and distribution systems of gas supply; Restoration of available amount of 150 million cubic meter of natural gas underground storage; Expansion of capacity of natural gas underground storage; Restoration of heat supply by maximum use of geothermal, biomass, solar and other renewable resources; Organization of implementation of wide-range ongoing activities that will ensure energy efficiency [4]. 14

15 3. National climate change policy 3.1. Mitigation Mitigation policies In 2009, the state budget of Armenia funded over 70 scientific themes relating to environmental problems, the majority of which refer to biodiversity and desertification problems, which are, at the same time, relevant to climate change related issues. Since 2008, the state budget has been financing the implementation of seven scientific studies on the assessment of losses as a result of climate change impact on ecosystems and agricultural crops, development of methodologies for forecasting the yields in the regions of Armenia during drought periods, as well as assessment of changes to water resources in large river basins. Several other studies have been conducted in Armenia aimed at assessment of the potential and promotion of the use of renewable energy sources, thus contributing to the reduced use of fossil fuels and GHG emissions reduction. The Second National Environmental Action Programme (NEAP-2) of the Republic of Armenia, which was developed in by Ministry of Nature Protection of Armenia with support of the UNDP CO Armenia, is a new generation environmental strategic action programme covering both environmental media (land, bio-resources, water, air, underground resources, hazardous waste and substances) and cross-media issues (environmental economics, environmental legislation, institutional issues, environmental monitoring, environmental compliance and enforcement, environmental impacts assessment, international cooperation, environmental education, public awareness, environmental research and development). It also refers to cross-sectoral issues in the energy, industry, transport, agriculture, and health sectors. Session of the Armenian Government approved the National Program on Energy Saving and Renewable Energy (ESRE) on January 18, The development of ESRE provided an unprecedented cross-sectoral assessment of energy saving and renewable energy potential in the Armenian economy, and recommended actions for cost-effectively utilizing this potential. All large and energy intensive enterprises underwent an in-depth energy examination, and end-use consumption data was collected for all 35 economic sectors by all fuel types filling a five-year statistical gap in the Armenian energy balance. This allowed revealing trends, making projections, drawing comparisons with other comparable countries and, most importantly, calculating the nationwide, sector-specific and enterprise-level energy saving potential. Moreover, it is worth to note that the main objective of the action plan of National Energy Efficiency Action Plan of Armenia is to contribute to the formulation of the future energy policy of Armenia and to define concrete steps for its implementation. One of the main aims of the national policy in the energy sector is to improve the energy efficiency and to develop the use of renewable energy sources in near future [16]. Armenian Renewable Resources and Energy Efficiency Fund has been established by the Government of Armenia as an independent NGO following the provisions of Law on Energy Efficiency and Renewable Energy of Armenia. The intended goal of the Fund is to facilitate the investments in energy efficiency and renewable energy in Armenia. To promote the renewable energy sources generation the preferential electricity tariffs were set by Public Services Regulatory Commission in The regulation on preferential tariffs of renewable 15

16 energy sources generation assumes that the defined costs must be annually updated based on the specified methodology [17]. The air pollution reduction of hazardous emissions from motor vehicles is typical to big cities and is one of the most complicated problems worldwide. Over-normative air pollution from one hand and high percentage of motor vehicle emissions in it from another hand set conditions for complexity. The purpose of the Concept of Reduction of Hazardous Emissions from Motor Vehicles is to reveal issues of the hazardous emission reduction from the motor vehicles and to draw attention of relevant agencies to the necessity of the solution finding. While developing strategies and action plans for other relevant areas the problems mentioned in the Concept should be taken into consideration [6] Mitigation policy instruments The Republic of Armenia is a member state of the United Nations since 2 March RA joined the Kyoto Protocol by the Decision of the National Assembly N323-2 on 26 December Armenia ratified the UNFCCC on May 14, 1993 which entered into force on March 21, The Kyoto Protocol was ratified by the Government of Armenia on April 25, 2003 and entered into force on February16, After the ratification it became eligible to receive GEF support under the climate change focal area. Armenia has also joined the Ramsar Convention which entered into force on November 6, 1993, and the UNCBD (entered into force on May 14, 1993). The country endorsed the UNCCD on July 2, 1997 (entered into force on September 30, 1997). The ratification gives opportunity to receive development assistance from UNDP. Armenia has effectively accomplished various assessments and reporting requirements for developing a national strategy focused on the climate change mitigation and adaptation through a broad-based consultative process since the ratification and entry into force of the UNFCCC and Kyoto Protocol. The country prepared its First National Communication (FNC) in 1998 and a National Capacity Self Assessment for Global Environmental Management (NCSA) in 2004 and its Second National Communication (SNC) to UNFCCC in 2010 [8]. National Program on Energy Saving and Renewable Energy of the Republic of Armenia The Republic of Armenia has adopted a policy of sustainable economic development, which assumes harmonized growth for each branch of the economy. Under these conditions, the energy sector is the most important sector for growth of the society as its qualitative and quantitative development determines the degree of Armenia's level of development and well-being of its citizens. At the January 18, 2007, the session of the Armenian Government approved the National Program on Energy Saving and Renewable Energy of the Republic of Armenia on January 18, National Program on Energy Saving and Renewable Energy of the Republic of Armenia provided an unprecedented cross-sectoral assessment of energy saving and renewable energy potential in the Armenian economy, and recommended actions for cost-effectively utilization of this potential. Using sustainable development conditions, there is no contradiction between the economic growth and environmental protection. When government policy has a systematic character, with coordinated and harmonized standards, it will not hinder the adoption of energy efficient technologies in all levels of government. It should be noted that like the grounds for the elaboration of the basic principles of the energy sector development strategies, the National Program was also developed based on the principle policy of 21 st principle of Global Program of Sustainable Development of 1992 United Nations 16

17 General Assembly Declaration on Environment and Development (Rio Convention or Earth Summit); ten years from that the fundamentals for sustainable development proposed at Johannesburg Summit, other environmental conventions ratified by Armenia with the resulting responsibilities, the RA Government Poverty Reduction Strategy, the Energy Sector Development Strategy within the program of Economic Development of Armenia, as well as the state policy in the field of energy saving and renewable energy set by the Law on Energy and the Law on Energy Saving and Renewable Energy of Armenia. a) Objectives: In comparison with the objectives of the energy sector, development strategies the National Program a little bit expended the area of the target plan and directed at the fulfilment of the following goals: 1. Support for the sustainable development of the Armenian economy. 2. Through development of energy saving and renewable energy systems, decrease the dependence on foreign energy suppliers and avoid interruptions in the Armenian fuel supply. 3. Alleviate the inefficient growth of the energy sector by securing intensive implementation of energy efficiency measures. 4. Efficient consumption of fuel-energy resources and maximal employment of renewable energy resources, through application of targeted economic and legal mechanisms. 5. Develop practical measures for achieving the targets set by this program. This includes the development and application of modern technologies and management practices. 6. Maximal utilization of local/domestic advantages (renewable energy resources, professional human resources, the practice of oversized energy system operation, current conditions of a region with scarce energy resources, etc). The National Program on energy saving and renewable energy is directed at solving the following problems: 1. Plan the development of energy resources of the country parallel to the advancement of energy saving and renewable energy, taking into account that increased energy efficiency usually has a low-cost nature. 2. Synchronize the state policy on development of fuel-energy resources with the growth of the economy as a whole. This guarantees countrywide sustainable development through the introduction of regulatory reforms and an increase in public participation throughout the process. 3. Direct the finance and credit policy of the country to energy saving and renewable energy development, providing equal conditions for capital investment. 4. Establish and maintain an active market structure through introduction and explanation of energy efficiency benefits, providing an effective choice mechanism for market participants. 5. Organize, promote and provide equal accessibility to modern technologies for all members of society, consumer and corporate alike. b) Target groups: 16 measures were developed for the 35 economic (sub-)sectors of the Republic of Armenia. All large and energy intensive enterprises underwent an in-depth energy examination. c) Rules and Influencing mechanisms: The developed energy saving measures are: Elimination of defects and improvement of technological process; Decrease of idle process; Automation of electric drives; Introduction of new energy efficient technological aggregates, with replacement of old ones; Introduction of new energy 17

18 efficient technological aggregates, with replacement of old ones (natural gas); Introduction of energy efficient motors; Compensation of reactive power; Introduction of automatic electricity measuring systems; Organizational measures; Improvement of thermal insulation in heaters and pipelines, reduction of losses in natural gas distribution system; Utilization of secondary fuel energy resources; Utilization of efficient type of fuel-energy resources; Application of diamond coated instruments; Improvement of valve system; Introduction of modern control systems; Modernization of thermal insulation plants; Application of energy efficient lamps. In each case, the electricity and/or gas savings were evaluated and investments to achieve the targets were defined [1]. The program is regulated by the Law of The Republic of Armenia on Energy Saving and Renewable Energy. d) Implementation network: The implementation of the program is under the obligation of the Ministry of Energy and Natural Resources of the Republic of Armenia. The Second National Environmental Action Programme of the Republic of Armenia The Second National Environmental Action Programme (NEAP-2) of the Republic of Armenia was developed in by Ministry of Nature Protection of Armenia with support of the UNDP CO Armenia. The Government of Armenia initiated and launched preparation of the NEAP-2 being based on implementation assessment of the first NEAP (1998). The Government of Armenia approved the NEAP-2 on August 14 th, The NEAP-2 is a new generation environmental strategic action programme. The approved programme covers both environmental media (land, bioresources, water, air, underground resources, hazardous waste and substances) and cross-media issues (environmental economics, environmental legislation, institutional issues, environmental monitoring, environmental compliance and enforcement, environmental impacts assessment, international cooperation, environmental education, public awareness, environmental research and development). It also refers to cross-sectoral issues in the energy, industry, transport, agriculture, and health sectors. The NEAP-2 is an environmental strategic document with analysis of the state of environment since 1998 and respective action programme designed for the period of The need to prepare the NEAP 2 is determined not only by the developments in the environmental sector, which have been underway since the adoption of NEAP-1, but also because of the economic and social developments in Armenia [2]. As mentioned above the Government of Armenia launched the preparation of the NEAP-2 ( ) based on the implementation assessment of the first NEAP (1998). A number of environmental concept papers, program and actions have been developed after the adoption of NEAP-1, which have been approved or endorsed under respective governmental by-laws. These have not been included in NEAP-2 to avoid duplications, but shall be deemed its indivisible part. These by-laws are as follows: Program of Reconstruction of the Ecological Balance of Lake Sevan (1998), Biodiversity Strategy and Action Plan of the Republic of Armenia (1999), NAP on Combating Desertification in Armenia (2002), SPA Development Strategy and Action Plan (2002), National Forest Policy and Strategy of the Republic of Armenia (2004), National Forest Programme of the Republic of Armenia (2004), Action Plan of Supporting Measures for Illegal Forest Loggings (2004), National Profile on Chemicals and Waste Management (2004), 18

19 Implementation Plan for the National Action Plan on Implementation of the Stockholm Convention on Persistent Organic Pollutants in the Republic of Armenia (2004), Concept for Reduction of Harmful Emissions from the Motor Transport (2004), Set of Measures on Reduction of Harmful Emissions from the Motor Transport (2005), List of Measures on Fulfilling Obligations Assumed by the Republic of Armenia Under a Number of Environmental Conventions (2004), List of Measures for Intersecting Issues on Three Conventions On Bio-Diversity, On Climate Change and On Desertification (2005), State Environmental Monitoring Concept of the Republic of Armenia (2006), Implementation Program for on Issues Derived from the State Environmental Monitoring Concept of the Republic of Armenia (2007), National Water Programme of the Republic of Armenia (2006), National Program on Implementation of Agreement on Partnership and Cooperation among RA and European Community and its Member States Addressed to the Integration in European Union (2006), Concept for Introduction of new biotechnology of artificial reproduction of populations of endemic species of fish of Lake Sevan (trout, khramulya, barbell) (2006). a) Objectives: The fundamental goals of NEAP-2 are: Guarantee a healthier and better environment in Armenia, Convey to the environment a role of restricting yet stimulating factor for development, Develop a new national strategic environmental programme for the five-year period of , Provide an overall framework for integrated environmental management in the Republic of Armenia that optimizes utilization of the country s natural resources and Identify an overall environmental conservation policy. b) Target groups Whole environment as well as social and economic sectors of the Republic of Armenia. c) Rules and Influencing mechanisms: In regard to intensification of international cooperation addressed to the solution of environmental issues in Armenia, it is necessary to take the following measures: Take steps in joining the Convention of UN ECE On Protection and Use of Trans-boundary Watercourses and International Lakes, as well as ensure ratification of a number of environmental agreements and the conformity of national legislation, which ensures further implementation of those agreements, to the requirements of international agreements; Expand the cooperation with the EU implementing the measures envisaged by the Action Plan within the framework of ENP, as well as the TAIEX, TWINNING, Cross-border Cooperation projects; Expand regional cooperation, in particular within the framework of the Caucasus REC activities and other projects; Expand cooperation with specific countries and international structures/organizations; Within the framework of general improvement of state funding for environmental program and expenditures, it is crucial to considerably increase the funding for RA participation in international and inter-governmental events and meetings [2]. 19

20 The action plan includes the following principal activities for the solution of the current environmental problems of the Republic of Armenia: Drafting of the RA Law "On Environmental Expertise" and sub-legislative acts to ensure the enforcement of the Law; Drafting of the RA Law "On Self-Control over Meeting the Requirements of Environmental Legislation"; Drafting of the RA "Law on Environment Protection" and development of project package for draft sub-legislative acts to ensure the enforcement of the Law; Implementation of measures not encompassed by this present Action Plan and those envisaged under the Chapter "Environment" in the National Program adopted by the Government of the Republic of Armenia within the framework of partnership and cooperation agreements signed between the Republic of Armenia and European Communities and their member states - development of relevant draft legal acts; Elaboration of environment strategy and action plan for Yerevan city; Determination of format and principles for developing environmental action plans for the Marzes and communities of the Republic of Armenia; Elaboration of project package for enhancement of environmental inspectional system capacities; Development of project package on strengthening capacities and development of state environmental expertise, environmental impact assessment and strategic ecological assessment system; Development of a project package on establishment of modern mechanisms for collection and exchange of environmental information; Development of programme package on establishment of mechanisms for comprehensive and integrated prevention of harmful impacts on the environment. d) Implementation network It is envisaged that the Government of Armenia (Ministry of Nature Protection of the Republic of Armenia and stakeholder ministries) will handle implementation of the NEAP-2. Action Plan to Reduce Emissions of Hazardous Substances from Motor Vehicles The corresponding Action Plan aimed at setting up a base for solution of issues mentioned in the Concept of Reduction of Hazardous Emissions from Motor Vehicles. a) Objectives: The main goals for the reduction of hazardous emissions from motor vehicles are summarized in the following steps (and sub-steps): Monitoring and registration of harmful substances emissions; Improvement of the legal framework, transport traffic and transport streams; Development of public transport (including electric transport); Promotion of the use of clean motor fuels ; Reduction of overall demand of transport: o Reduction of the overall demand of the traffic; o Improvement of the public transport; Reduction of needed fuel consumption for unit s movement: o Raising the fuel saving of motor vehicles; o Improvement of electric transport; o Development of non-motor transportation; 20

21 o Improvement of traffic control; o Improvement of road network; Reduction of used fuel emission per unit: o Improvement of standards for fuel and lubricating oils and transition to more environmentally clean fuel types; o Enforcement and improvement of the standards on motor vehicles emissions. b) Target groups Whole transport and other related sectors c) Rules and Influencing mechanisms: The main influencing mechanisms are the Laws "On Protection of Atmosphere" (adopted on and amended on ) and "On Environmental Control" (adopted on ) as well as the Law "On Environmental Charges"(adopted on ). d) Implementation network: - Ministry of Healthcare of the Republic of Armenia; - Ministry of Nature Protection of the Republic of Armenia; - Ministry of Transport and Communication of the Republic of Armenia; - Ministry of Finance and Economy of the Republic of Armenia; - Ministry of Education and Science of the Republic of Armenia; - Yerevan Municipality; - Police of the Republic of Armenia [5]. The Law of RA on Energy Saving and Renewable Energy a) Objectives The purposes of the present Law are the defining of the principles for the state policy on development of the energy saving and renewable energy and the mechanisms of the enforcement of those aimed at: Strengthening the economic and energy independence of the Republic of Armenia; Increasing the economic and energy security; and energy systems safety level of the Republic of Armenia; Establishment and development of new industry infrastructure and organization of services promoting energy saving and renewable energy; Reduction of adverse techno-born impacts on the environment and human health. b) Target groups The law shall regulate the inter-relations of the state administration and local self-government bodies of the Republic of Armenia, legal and physical persons arising from and in connection with the activities in the sphere of energy saving and renewable energy: The areas of development, production, import, and use of energy devices, machinery, equipment and products producing, transporting, transforming, storing and operating based on energy as well as renewable energy resources; The areas of development, production and import of up to date construction-isolation, isolation and weatherization materials and structures aimed at increasing the energy efficiency of buildings and constructions; The areas of development and application of the industrial-technical complexes using energy carriers (including for lighting, heating, ventilation, water supply and sewerage systems) and 21