R 310930Z DEC 08
FM AMEMBASSY YEREVAN
TO SECSTATE WASHDC 8478
INFO DEPT OF ENERGY WASHINGTON DC
CIS COLLECTIVE

UNCLAS YEREVAN 001049 
 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO
 
SUBJECT: ARMENIA'S CIVIL NUCLEAR ENERGY PLANS 
 
REF: A) STATE 127468 B) YEREVAN 837 
 
1) In response to Ref A, the Armenian government (GOAM) is in the 
early stages of planning a new nuclear power plant to replace the 
aging Soviet-era Armenian Nuclear Power Plant (ANPP) at Metsamor. 
The GOAM is under international pressure to close ANPP by the end of 
2016 due to safety concerns, however, this timeline may have to be 
extended if the new plant has yet to be finished.  Embassy Yerevan 
maintains regular contact with the GOAM about its plans for 
replacement of ANPP and in 2008 USAID funded a set of Initial 
Planning Studies for such a project.  Post has reported regularly on 
the GOAM's plans regarding a replacement for ANPP, most recently in 
Ref B.  Following are the questions in Ref A and post's replies: 
 
2) ARE THERE ANY PLANS TO EXPAND YOUR COUNTRY'S CIVIL NUCLEAR POWER 
PROGRAM? 
 
The GOAM is planning to replace the existing ANPP with a new nuclear 
power plant in order to comply with international demands to 
decommission an aging facility whose design poses a potential threat 
to public health as well as to the ecology of the region.  The 
current ANPP produces approximately 42 percent of Armenia's total 
electricity output.  As a result, the GOAM is considering various 
options for building a new facility that would have a 1,000 to 1,200 
megawatt (MW) reactor, approximately twice the current reactor's 440 
MW capacity.  This level of capacity factors increasing energy 
demand within the Armenian economy over the plant's life, and the 
possibility of energy sales to neighboring countries. 
 
3) FOR EXPANDING NUCLEAR POWER PROGRAMS, DESCRIBE YOUR COUNTRY'S 
UNDERLYING MOTIVATIONS. 
 
The primary motivation for a new nuclear power plant in Armenia is 
energy security, as Armenia has poor energy resources and faces a de 
facto blockade by two of its neighbors.  Currently, Armenia is 
forced to import all of its natural gas from Russia and Iran, and 
receives its refined petroleum through Georgia.  During the early 
1990s, the ANPP was closed down following the 1988 Spitak 
earthquake, and for several years the country was reduced to just 
several hours of electricity per day.  One of the two reactors was 
reopened in 1995 with Russian assistance and remains in operation. 
 
Armenia relies on ANPP for up to 42 percent of its electricity, with 
gas-powered thermal and hydroelectric generation comprising 25-30 
percent each. The 2006 Least Cost Generation Plan (LCGP) concluded 
that a new nuclear unit is the least cost option for replacing such 
a large percentage of the country's electricity demand, particularly 
given the likelihood of steadily increasing prices for natural gas 
from abroad. In 2007, the LCGP was adopted by GOA as consistent with 
its energy strategy. 
 
4) IF THERE ARE PLANS TO EXPAND NUCLEAR POWER, DESCRIBE THE 
GOVERNMENT'S ROLE IN THE FINANCING OF ITS CIVIL NUCLEAR SECTOR. 
 
A new nuclear power plant is projected to cost approximately USD 6-7 
billion, equal to nearly 60-70 percent of Armenia's GDP.  The GOAM 
does not have the financial resources to build a new power plant, 
and will need to rely on a combination of private sector investment, 
debt financing, foreign government export credits and foreign 
assistance to finance construction of a new facility. 
 
5) DESCRIBE YOUR COUNTRY'S NUCLEAR REGULATORY AUTHORITY. 
 
Nuclear power in Armenia is regulated by the State Committee for 
Regulation of Nuclear Safety, known under its longtime acronym, ANRA 
(for its old name, the Armenian Nuclear Regulatory Authority).  It 
is an executive agency which implements State regulation in the use 
of atomic energy, including the safety of the population and nuclear 
personnel, environmental protection and Republic of Armenia's 
security interests. 
 
6) DOES YOUR COUNTRY HAVE A DOMESTIC NUCLEAR LIABILITY LAW? 
 
Armenia has a law on Safe Utilization of Atomic Energy for Peaceful 
Purposes. The Law specifies relations in state regulation of atomic 
energy utilization field, safety of nuclear facilities and other 
relations in atomic energy utilization with the purpose to protect 
personnel, public and environment, as well as the safety related 
interest of ROA. 
 
7) IS THE MANUFACTURING BASE IN YOUR COUNTRY INVOLVED IN 
NUCLEAR-RELATED PRODUCTS OR SERVICES? 
 
Armenia does not have an industrial base capable of producing any of 
the specialized elements of a nuclear power plant.  All of the major 
items will need to be imported.  In addition, the GOAM will need to 
assess and if needed undertake modifications to a number of roads, 
railways and bridges in order to accommodate some of the larger-size 
components as they are transported to the site. Lastly a national 
radioactive waste management strategy should be defined for Armenia 
based on IAEA waste management requirements and guidelines to define 
expected technologies and locations for storage and disposal of 
radioactive waste from ANPP Units 1, 2 and 3. 
 
8) HOW EXTENSIVE IS YOUR COUNTRY'S NUCLEAR-TRAINED WORKFORCE? 
 
A large part of Armenia's nuclear plant operating personnel are 
nearing retirement, with a limited supply of replacements coming 
through the system.  The GOAM has recognized this as a potential 
problem and with help from educational institutions and ANPP 
officials is taking steps to attract more students to the field of 
nuclear physics and engineering.  Currently, the GOAM is working 
with the IAEA on a training and staffing assessment, which is 
nearing completion.  A functional task analysis approach is being 
used to identify the tasks and competencies needed for each phase of 
the NPP project: Initial Planning, Preparation, Construction, 
Commissioning and Operation.  They are also conducting a survey of 
human resources in existing engineering organizations in Armenia 
(e.g., ANPP, CJSC Atomservice, CJSC Armatom), preparing a survey of 
technical training institutions in Armenia, and making 
recommendations for human resource development and training. 
 
The country will need to make a concerted effort to train new 
skilled plant operators if it is to meet the needs of a new ANPP. 
Construction of a nuclear power plant will likely entail recruitment 
of the majority of the skilled workforce in Armenia.  The Initial 
Planning Studies also anticipate that there will be considerable 
infrastructure requirements to support an imported 
workforce--including homes and schools--during the construction of 
the project. 
 
9) DOES YOUR COUNTRY HAVE ANY CURRENT OR ANTICIPATED NUCLEAR-RELATED 
TENDERS? 
 
There are no current tenders, but the Government is moving forward 
expeditiously towards a tender.  The GOAM plans to issue tenders in 
2009 for early-stage financial and design consulting.  More 
specifically, on December 25, 2008 the Armenian Prime Minister, 
Tigran Sargsyan, headed a government session during which the 
Government passed a bill on "Construction of new nuclear energy 
blocks in Armenia", which will be presented to the RA National 
Assembly.   In a second resolution, the government approved the 
contest package for the "Selection of the company in charge of the 
construction of the new nuclear energy block" and confirmed the 
staff of the inter-ministerial contest committee. The Prime Minister 
assigned RA Energy and Natural Resources Minister Armen Movsisian to 
make an official announcement regarding the international contest 15 
days after the official record of purchases. 
 
10) WHAT NUCLEAR SECTOR OPPORTUNITIES DO YOU FORESEE FOR U.S. 
INDUSTRY? 
 
There are potential opportunities for design, engineering, equipment 
and financing firms.  One of the three designs being actively 
considered by the GOAM for the new nuclear unit is a Westinghouse 
product.  Moreover, GOAM officials have repeatedly expressed 
interest in working with firms from a variety of western countries 
in the development of a new nuclear power plant.  Nonetheless, given 
the large role played by Russian firms in Armenia's energy sector -- 
including its debt to Russia for restarting the existing plant - 
there is considerable expectation that Armenia will turn to Russia 
to build a significant portion of the new plant, including reactors 
and other central infrastructure. While Russian firms have expressed 
strong interest in engaging in the nuclear plant in Armenia, more 
practically they are very busy with projects in other countries. 
This could stretch their ability to finance or deliver a new plant 
to Armenia under the current delivery schedule. 
 
11) WHAT ARE THE PRIMARY COMPANIES INVOLVED IN YOUR COUNTRY'S CIVIL 
NUCLEAR SECTOR? 
 
Since the ANPP is wholly owned by the GOAM, the primary companies 
involved in selling to and servicing its needs are either affiliated 
with the government or are international contractors affiliated with 
foreign government nuclear safety and assistance programs.  The 
existing engineering organizations in Armenia working on nuclear 
matters include ANPP, CJSC Atomservice, and CJSC Armatom.  A number 
of European (nuclear safety and decommissioning) and Russian 
companies (fuel supply and management service) are providing 
services to ANPP, as well as U.S. National Laboratories and their 
subcontractors (safety upgrades). 
 
12) ARE THERE OTHER NUCLEAR SUPPLIER COUNTRIES ENGAGING YOUR COUNTRY 
ON ITS CIVIL NUCLEAR POWER PROGRAM? 
 
Yes--Russia, France, the Czech Republic and the UK.  As previously 
noted, Russia is the supplier of nuclear fuel and has provided 
management services.  A  French firm (Framatom) supplies equipment 
for ANPP's dry storage for spent nuclear fuel.  A Czech company is 
conducting some of the ultrasound testing under a USDOE subcontract. 
 The UK has provided safety support to Armenia under the Armenian 
government's nuclear safety program. 
 
13) ARE THERE ANY POLITICAL CONSIDERATIONS YOUR COUNTRY MAY TAKE 
INTO ACCOUNT WHEN CHOOSING TO COOPERATE WITH COMPETING NUCLEAR 
SUPPLIER STATES? 
 
The GOAM works to maintain friendly relations with both the United 
States and Russia, and consequently is likely to engage suppliers 
from both countries - as well as from Western Europe -in development 
of a new plant. 
 
YOVANOVITCH 
 
 
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